<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
SCHEDULE 14D-1
Tender Offer Statement
Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934
and
Statement on
SCHEDULE 13D
Under the Securities Exchange Act of 1934
AMERICAN SAFETY RAZOR COMPANY
(Name of Subject Company)
J.W. CHILDS EQUITY PARTNERS II, L.P.*
RSA HOLDINGS CORP. OF DELAWARE
RSA ACQUISITION CORP.
(Bidders)
COMMON STOCK, $0.01 PAR VALUE PER SHARE
(Title of Class of Securities)
029362100
(CUSIP Number of Class of Securities)
ADAM SUTTIN
C/O J.W. CHILDS EQUITY PARTNERS II, L.P.
ONE FEDERAL STREET
BOSTON, MA 02110
(617) 753-1100
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
COPY TO:
MARIO A. PONCE, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
TELEPHONE: (212) 455-2000
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
TRANSACTION VALUATION** AMOUNT OF FILING FEE***
- ---------------------------------------------------------------------------------------------
<S> <C>
$177,614,092.13 $35,523
- ---------------------------------------------------------------------------------------------
</TABLE>
* J.W. Childs Equity Partners II, L.P. disclaims that it is a 'bidder' for
purposes of the Offer within the meaning of rule 14d-1(e) (1).
** Based on the offer to purchase all of the outstanding shares of Common Stock
of the Subject Company at $14.125 cash per share, 12,110,049 Shares
outstanding and 464,400 options outstanding as of February 12, 1999.
*** 1/50 of 1% of Transaction Valuation.
[ ]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and
identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid:
Form or Registration No.:
Filing Party: ________________________
Date Filed: ________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
<S> <C> <C>
- ------------------------- ----------------------
CUSIP No. 029362100 Page ---- of---- Pages
- ------------------------- ----------------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
- ----------------------------------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J.W. Childs Equity Partners II, L.P.
- ----------------------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
2 (b) [ ]
- ----------------------------------------------------------------------------------------------------------
SEC USE ONLY
3
- ----------------------------------------------------------------------------------------------------------
SOURCE OF FUNDS
4
BK, OO
- ----------------------------------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ----------------------------------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ----------------------------------------------------------------------------------------------------------
SOLE VOTING POWER*
NUMBER OF
SHARES
BENEFICIALLY OWNED BY EACH
REPORTING
PERSON
WITH
7
2,311,654
-----------------------------------------------------------------
SHARED VOTING POWER
8
0
-----------------------------------------------------------------
SOLE DISPOSITIVE POWER
9
0
-----------------------------------------------------------------
SHARED DISPOSITIVE POWER
10
0
- ----------------------------------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
11 PERSON*
2,311,654
- ----------------------------------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES [ ]
- ----------------------------------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
19% (based on 12,110,049 outstanding)
- ----------------------------------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
CO
- ----------------------------------------------------------------------------------------------------------
</TABLE>
* Beneficial ownership is based solely on the provisions of the Shareholders
Agreement, pursuant to which among other things, certain stockholders of
American Safety Razor Company have agreed with the reporting person to grant
an irrevocable proxy to RSA Acquisition Corp. to vote the shares shown as
beneficially owned by such reporting persons in favor of the Merger and
against any action or agreement (other than the Merger Agreement or the
transactions contemplated thereby) that would impede, interfere with, delay,
postpone or attempt to discourage the Merger or the Offer, all as more fully
described herein. Capitalized terms have the meanings assigned thereto
herein.
<PAGE> 3
<TABLE>
<S> <C> <C>
- ------------------------- ----------------------
CUSIP No. 029362100 Page ---- of---- Pages
- ------------------------- ----------------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
- ----------------------------------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RSA Holdings Corp. of Delaware
- ----------------------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
2 (b) [ ]
- ----------------------------------------------------------------------------------------------------------
SEC USE ONLY
3
- ----------------------------------------------------------------------------------------------------------
SOURCE OF FUNDS
4
BK, OO
- ----------------------------------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ----------------------------------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ----------------------------------------------------------------------------------------------------------
SOLE VOTING POWER*
NUMBER OF
SHARES
BENEFICIALLY OWNED BY EACH
REPORTING
PERSON
WITH
7
2,311,654
-----------------------------------------------------------------
SHARED VOTING POWER
8
0
-----------------------------------------------------------------
SOLE DISPOSITIVE POWER
9
0
-----------------------------------------------------------------
SHARED DISPOSITIVE POWER
10
0
- ----------------------------------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
11 PERSON*
2,311,654
- ----------------------------------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES [ ]
- ----------------------------------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
19% (based on 12,110,049 outstanding)
- ----------------------------------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
CO
- ----------------------------------------------------------------------------------------------------------
</TABLE>
* Beneficial ownership is based solely on the provisions of the Shareholders
Agreement, pursuant to which among other things, certain stockholders of
American Safety Razor Company have agreed with the reporting person to grant
an irrevocable proxy to RSA Acquisition Corp. to vote the shares shown as
beneficially owned by such reporting persons in favor of the Merger and
against any action or agreement (other than the Merger Agreement or the
transactions contemplated thereby) that would impede, interfere with, delay,
postpone or attempt to discourage the Merger or the Offer, all as more fully
described herein. Capitalized terms have the meanings assigned thereto
herein.
<PAGE> 4
<TABLE>
<S> <C> <C>
- ------------------------- ----------------------
CUSIP No. 029362100 Page ---- of---- Pages
- ------------------------- ----------------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
- ----------------------------------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RSA Acquisition Corp.
- ----------------------------------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
2 (b) [ ]
- ----------------------------------------------------------------------------------------------------------
SEC USE ONLY
3
- ----------------------------------------------------------------------------------------------------------
SOURCE OF FUNDS
4
BK, OO
- ----------------------------------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
5 PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ----------------------------------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Delaware
- ----------------------------------------------------------------------------------------------------------
SOLE VOTING POWER*
NUMBER OF
SHARES
BENEFICIALLY OWNED BY EACH
REPORTING
PERSON
WITH
7
2,311,654
-----------------------------------------------------------------
SHARED VOTING POWER
8
0
-----------------------------------------------------------------
SOLE DISPOSITIVE POWER
9
0
-----------------------------------------------------------------
SHARED DISPOSITIVE POWER
10
0
- ----------------------------------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
11 PERSON*
2,311,654
- ----------------------------------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
12 CERTAIN SHARES [ ]
- ----------------------------------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
19% (based on 12,110,049 outstanding)
- ----------------------------------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
CO
- ----------------------------------------------------------------------------------------------------------
</TABLE>
* Beneficial ownership is based solely on the provisions of the Shareholders
Agreement, pursuant to which among other things, certain stockholders of
American Safety Razor Company have agreed with the reporting person to grant
an irrevocable proxy to RSA Acquisition Corp. to vote the shares shown as
beneficially owned by such reporting persons in favor of the Merger and
against any action or agreement (other than the Merger Agreement or the
transactions contemplated thereby) that would impede, interfere with, delay,
postpone or attempt to discourage the Merger or the Offer, all as more fully
described herein. Capitalized terms have the meanings assigned thereto
herein.
<PAGE> 5
This Tender Offer Statement on Schedule 14D-1 relates to the offer by RSA
Acquisition Corp., a Delaware corporation (the "Purchaser"), a wholly owned
subsidiary of RSA Holdings Corp. of Delaware, a Delaware corporation ("Parent"),
to purchase all of the outstanding shares of Common Stock, $0.01 par value per
share (the "Shares"), of American Safety Razor Company, a Delaware corporation
(the "Company"), at a purchase price of $14.125 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 February 22, 1999 (the "Offer to
Purchase"), a copy of which is attached hereto as Exhibit (a)(1), and in the
related Letter of Transmittal (which, together with the Offer to Purchase, as
amended from time to time, constitute the "Offer"), a copy of which is attached
hereto as Exhibit (a)(2). RSA Holdings Corp. of Delaware is a wholly owned
subsidiary of J.W. Childs Equity Partners II, L.P.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is American Safety Razor Company. The
information set forth in Section 7 ("Certain Information Concerning the
Company") of the Offer to Purchase is incorporated herein by reference.
(b) The exact title of the class of equity securities being sought in the
Offer is Common Stock, par value $0.01 per share, of the Company. The
information set forth in the Introduction (the "Introduction") of the
Offer to Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement is filed by the Purchaser and the Parent.
The information set forth in Section 8 ("Certain Information Concerning the
Purchaser, Parent, JWCP, JWC Advisors, JWC Associates and JWC Inc.") of the
Offer to Purchase and in Schedule I thereto is incorporated herein by reference.
(e) and (f) During the last five years, neither the Purchaser nor the
Parent nor, to the best knowledge of the Purchaser or the Parent, any of the
persons listed in Schedule I to the Offer to Purchase (i) has been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any violation
of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) and (b) The information set forth in Section 8 "Certain Information
Concerning the Purchaser, Parent, JWCP, JWC Advisors, JWC Associates and JWC
Inc."), Section 10 ("Background of the Offer; Contacts with the Company") and
Section 11 ("The Merger Agreement; The Shareholders Agreement") of the Offer to
Purchase and in Exhibit (c)(1) of this Schedule 14D-1 is incorporated herein by
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b) The information set forth in Section 9 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction, Section 10
("Background of the Offer; Contacts with the Company"), Section 11 ("The Merger
Agreement; The Shareholders Agreement"), Section 12 ("Purpose of the Offer; the
Merger; Plans for the Company") and Section 13 ("Dividends and Distributions")
of the Offer to Purchase is incorporated herein by reference.
i
<PAGE> 6
(f)-(g) The information set forth in Section 14 ("Effect of the Offer on
the Market for the Shares, Nasdaq Listing and Exchange Act Registration") of the
Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in the Introduction, Section 11 ("The
Merger Agreement; The Shareholders Agreement"), Section 8 ("Certain Information
Concerning the Purchaser and the Parent") and Schedule I to the Offer to
Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 8 ("Certain
Information Concerning the Purchaser, Parent, JWCP, JWC Advisors, JWC Associates
and JWC Inc."), Section 10 ("Background of the Offer; Contacts with the
Company"), Section 11 ("The Merger Agreement; The Shareholders Agreement") and
Section 12 ("Purpose of the Offer; the Merger; Plans for the Company") of the
Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 8 ("Certain Information Concerning the
Purchaser, Parent, JWCP, JWC Advisors, JWC Associates and JWC Inc.") of the
Offer to Purchase is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) None.
(b) and (c) The information set forth in Section 16 ("Certain Legal Matters
and Regulatory Approvals") of the Offer to Purchase is incorporated herein by
reference.
(d) The information set forth in Section 14 ("Effect of the Offer on the
Market for the Shares, Nasdaq Listing and Exchange Act Registration") and
Section 16 ("Certain Legal Matters and Regulatory Approvals") of the Offer to
Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a) (1) Offer to Purchase dated February 22, 1999.
(a) (2) Letter of Transmittal.
(a) (3) Notice of Guaranteed Delivery.
(a) (4) Letter from the Dealer Managers to Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees.
(a) (5) Letter to clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a) (6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a) (7) Summary Advertisement as published on February 22, 1999.
ii
<PAGE> 7
(a) (8) Press Release issued by the Company on February 15, 1999.
(b) (1) Commitment Letter, dated as of February 12, 1999, to the Purchaser
from NationsBank, N.A., NationsBanc Montgomery Securities LLC and
DLJ Capital Funding, Inc.
(b) (2) Commitment Letter, dated February 12, 1999, from J.W. Childs Equity
Partners II, L.P. to the Parent.
(c) (1) Agreement and Plan of Merger, dated as of February 12, 1999, by and
among the Parent, the Purchaser and the Company.
(c) (2) Shareholders Agreement, dated as of February 12, 1999, by and among
the Parent, the Purchaser and certain stockholders of the Company.
iii
<PAGE> 8
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
RSA Holdings Corp. of Delaware
By: /s/ B. LANE MACDONALD
------------------------------------
Name: B. Lane MacDonald
Title: Vice President and Secretary
RSA Acquisition Corp.
By: /s/ B. LANE MACDONALD
------------------------------------
Name: B. Lane MacDonald
Title: Vice President and Secretary
J.W. Childs Equity Partners II,
L.P.
By: J.W. Childs Advisors II,
L.P.,
its general partner
By: J.W. Childs Associates,
L.P.,
its general partner
By: J.W. Childs Associates,
Inc.,
its general partner
By: /s/ STEVEN G. SEGAL
---------------------------
Name: Steven G. Segal
Title: Senior Managing
Director
Date: February 22, 1999
iv
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------- -----------
<S> <C> <C>
11(a)(1) Offer to Purchase dated February 22, 1999
11(a)(2) Letter of Transmittal
11(a)(3) Notice of Guaranteed Delivery
11(a)(4) Letter from the Dealer Managers to Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees
11(a)(5) Letter to clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees
11(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
11(a)(7) Summary Advertisement as published on February 22, 1999
11(a)(8) Press Release issued by the Company on February 15, 1999
11(b)(1) Commitment Letter, dated as of February 12, 1999, to the
Purchaser from NationsBank, N.A., NationsBanc Montgomery
Securities LLC and DLJ Capital Funding, Inc.
11(b)(2) Commitment Letter, dated February 12, 1999, from J.W. Childs
Equity Partners II, L.P. to the Parent
11(c)(1) Agreement and Plan of Merger, dated as of February 12, 1999,
by and among the Parent, the Purchaser and the Company
11(c)(2) Shareholders Agreement, dated as of February 12, 1999, by
and among the Parent, the Purchaser and certain stockholders
of the Company
</TABLE>
v
<PAGE> 1
EXHIBIT 11(A)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
AMERICAN SAFETY RAZOR COMPANY
AT
$14.125 NET PER SHARE
BY
RSA ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
RSA HOLDINGS CORP. OF DELAWARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 19, 1999 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 A
NUMBER OF SHARES OF COMMON STOCK WHICH CONSTITUTES MORE THAN 50% OF THE VOTING
POWER (DETERMINED ON A FULLY DILUTED BASIS) ON THE DATE OF PURCHASE OF ALL OF
THE SECURITIES OF AMERICAN SAFETY RAZOR COMPANY ENTITLED TO VOTE GENERALLY IN
THE ELECTION OF DIRECTORS OR IN A MERGER. THE OFFER IS ALSO SUBJECT TO OTHER
TERMS AND CONDITIONS. SEE THE INTRODUCTION AND SECTIONS 1 AND 15.
THE BOARD OF DIRECTORS OF AMERICAN SAFETY RAZOR COMPANY HAS UNANIMOUSLY
DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING EACH OF THE OFFER AND THE MERGER, ARE FAIR TO AND IN THE BEST
INTERESTS OF THE STOCKHOLDERS OF AMERICAN SAFETY RAZOR COMPANY AND RECOMMENDS
THAT HOLDERS OF SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES TO RSA
ACQUISITION CORP.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (as defined herein) of American Safety Razor Company should either (1)
complete and sign the Letter of Transmittal (or a facsimile thereof) in
accordance with the instructions in the Letter of Transmittal, mail or deliver
the Letter of Transmittal (or such facsimile) and any other required documents
to the Depositary (as defined herein), and either deliver the certificates
representing the tendered Shares and any other required documents to the
Depositary or tender such Shares pursuant to the procedure for book-entry
transfer set forth in Section 3 or (2) request such stockholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. Stockholders having Shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such broker, dealer, commercial bank, trust company or other nominee if
they desire to tender Shares so registered.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedure for book-entry transfer on a timely basis, may tender such
Shares by following the procedures for guaranteed delivery set forth in Section
3.
Questions and requests for assistance may be directed to Donaldson, Lufkin
& Jenrette Securities Corporation or NationsBanc Montgomery Securities LLC (each
a "Dealer Manager") or to MacKenzie Partners, Inc. (the "Information Agent") at
their respective addresses and telephone numbers set forth on the back cover of
this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter
of Transmittal and the Notice of Guaranteed Delivery may also be obtained from
the Information Agent or from brokers, dealers, commercial banks or trust
companies.
------------------------
The Dealer Managers for the Offer are:
DONALDSON, LUFKIN & JENRETTE NATIONSBANC MONTGOMERY SECURITIES LLC
February 22, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION................................................ 1
THE TENDER OFFER............................................ 3
1. Terms of the Offer, Expiration Date.................... 3
2. Acceptance for Payment and Payment for Shares.......... 4
3. Procedure for Tendering Shares......................... 5
4. Withdrawal Rights...................................... 8
5. Certain Federal Income Tax Consequences................ 8
6. Price Range of Shares; Dividends....................... 9
7. Certain Information Concerning the Company............. 10
8. Certain Information Concerning the Purchaser, Parent,
JWCP, JWC Advisors, JWC Associates and JWC Inc......... 11
9. Source and Amount of Funds............................. 12
10. Background of the Offer; Contacts with the Company..... 12
11. The Merger Agreement; The Shareholders Agreement....... 14
12. Purpose of the Offer; the Merger; Plans for the
Company.................................................. 22
13. Dividends and Distributions............................ 24
14. Effect of the Offer on the Market for the Shares,
Nasdaq Listing and Exchange Act Registration........... 24
15. Certain Conditions of the Offer........................ 26
16. Certain Legal Matters and Regulatory Approvals......... 27
17. Fees and Expenses...................................... 29
18. Miscellaneous.......................................... 30
</TABLE>
SCHEDULE I Certain Information Regarding the Directors and Executive Officers of
the
Purchaser, Parent and J.W. Childs
i
<PAGE> 3
To: The Stockholders of
American Safety Razor Company
INTRODUCTION
RSA Acquisition Corp., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of RSA Holdings Corp. of Delaware, a Delaware
corporation (the "Parent"), hereby offers to purchase all of the outstanding
shares of Common Stock, par value $0.01 per share (the "Shares"), of American
Safety Razor Company, a Delaware corporation (the "Company"), at a purchase
price of $14.125 per Share, net to the seller in cash without interest thereon,
upon the terms and subject to the conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which, as amended from time to time,
together constitute the "Offer"). RSA Holdings Corp. of Delaware is a wholly
owned subsidiary of J.W. Childs Equity Partners II, L.P.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the transfer and sale of Shares pursuant to the Offer. The
Purchaser will pay all fees and expenses of Donaldson, Lufkin & Jenrette
Securities Corporation and NationsBanc Montgomery Securities LLC, each of which
is acting as Dealer Manager for the Offer (in such capacity, each a "Dealer
Manager"), Continental Stock Transfer & Trust Co., which is acting as the
Depositary (in such capacity, the "Depositary") and MacKenzie Partners, Inc. (in
such capacity, the "Information Agent") incurred in connection with the Offer.
See Section 17.
The Board of Directors of the Company (the "Board of Directors") has
unanimously determined that the Merger Agreement (as defined below) and the
transactions contemplated thereby, including each of the Offer and the Merger
(as defined below), are fair to and in the best interests of the stockholders of
the Company and recommends that the holders of the Shares accept the offer and
tender their Shares to the Purchaser.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN
SECTION 1) A NUMBER OF SHARES WHICH CONSTITUTES MORE THAN 50% OF THE VOTING
POWER (DETERMINED ON A FULLY-DILUTED BASIS), ON THE DATE OF PURCHASE, OF ALL THE
SECURITIES OF THE COMPANY ENTITLED TO VOTE GENERALLY IN THE ELECTION OF
DIRECTORS OR IN A MERGER (THE "MINIMUM CONDITION"). SEE SECTIONS 1 AND 15. IF
THE PURCHASER PURCHASES NOT LESS THAN THAT NUMBER OF SHARES NEEDED TO SATISFY
THE MINIMUM CONDITION, IT WILL BE ABLE TO EFFECT THE MERGER WITHOUT THE
AFFIRMATIVE VOTE OF ANY OTHER STOCKHOLDER OF THE COMPANY. SEE SECTION 12.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of February 12, 1999 (the "Merger Agreement"), among the Parent, the
Purchaser and the Company. The Merger Agreement provides, among other things,
for the making of the Offer by the Purchaser, and further provides that,
following the completion of the Offer, upon the terms and subject to the
conditions of the Merger Agreement and the Delaware General Corporation Law (the
"DGCL"), the Purchaser will be merged with and into the Company (the "Merger").
Following the Merger, the Company will continue as the surviving corporation
(the "Surviving Corporation") and become a wholly owned subsidiary of the
Parent, and the separate corporate existence of the Purchaser will cease.
Certain stockholders of the Company, including certain executive officers
of the Company and certain partners, principals, officers, directors, employees
and affiliates of The Jordan Company ("TJC"), representing approximately 19% of
the issued and outstanding Shares (on a fully diluted basis) of the Company (the
"Principal Holders") have contractually agreed, among other things, to tender
their Shares in the Offer, provide the Purchaser with an irrevocable proxy and
otherwise support the transaction with the Purchaser. See Section 11 for a
discussion of the arrangements with the Principal Holders.
Pursuant to the Merger Agreement, the Company agrees, if and to the extent
permitted by law, at the request of the Purchaser and subject to the terms of
the Merger Agreement, to take all necessary and appropriate actions to cause the
Merger to become effective as soon as reasonably practicable after the purchase
of the Shares pursuant to the Offer, without a meeting of the Company's
stockholders in accordance with the DGCL. See Section 11.
1
<PAGE> 4
At the effective time of the Merger (the "Effective Time"), each Share
issued and outstanding immediately prior to the Effective Time (other than any
Shares held by the Parent, the Purchaser, any wholly owned subsidiary of the
Parent 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, shall be
canceled and shall cease to exist with no payment being made with respect
thereto, and other than Dissenting Shares (as defined)) shall be converted into
the right to receive in cash the Offer price (the "Merger Price"), payable to
the holder thereof without interest, upon surrender of the certificate formerly
representing such Share.
The Company has represented to the Parent that as of February 12, 1999, (i)
there were 12,110,049 Shares issued and outstanding and (ii) 750,000 Shares
reserved for issuance upon the exercise of outstanding stock options of which
options to purchase 464,400 Shares were outstanding. Based upon the foregoing,
the Purchaser believes that approximately 6,287,226 Shares constitute a majority
of the outstanding Shares on a fully diluted basis.
The Merger Agreement is more fully described in Section 11. Certain federal
income tax consequences of the sale of the Shares pursuant to the Offer and the
exchange of Shares for the Merger Price pursuant to the Merger are described in
Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
2
<PAGE> 5
THE TENDER OFFER
1. TERMS OF THE OFFER, EXPIRATION DATE. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of such extension or amendment), the Purchaser will accept
for payment and pay for all Shares validly tendered on or prior to the
Expiration Date and not properly withdrawn as permitted by Section 4. The term
"Expiration Date" means 12:00 Midnight, New York City time, on Friday, March 19,
1999, unless and until the Purchaser, in its discretion (but subject to the
terms and conditions of the Merger Agreement), shall have extended the period
during which the Offer is open, in which event the term "Expiration Date" shall
mean the latest time and date at which the Offer, as so extended by the
Purchaser, shall expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SATISFACTION OF THE
MINIMUM CONDITION AND THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS
IMPOSED BY THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1996, AS AMENDED,
AND THE REGULATIONS THEREUNDER (THE "HSR ACT"). THE OFFER IS NOT CONDITIONED ON
THE RECEIPT OF FINANCING. SEE SECTION 15, WHICH SETS FORTH IN FULL THE
CONDITIONS TO THE OFFER. SUBJECT TO THE PROVISIONS OF THE MERGER AGREEMENT,
INCLUDING THE PROVISIONS OF THE MERGER AGREEMENT SET FORTH IN THE NEXT
PARAGRAPH, AND THE APPLICABLE RULES AND REGULATIONS OF THE SECURITIES AND
EXCHANGE COMMISSION (THE "COMMISSION"), THE PURCHASER RESERVES THE RIGHT, IN ITS
SOLE DISCRETION, TO WAIVE ANY OR ALL CONDITIONS TO THE OFFER AND TO MAKE ANY
OTHER CHANGES IN THE TERMS AND CONDITIONS OF THE OFFER. SUBJECT TO THE
PROVISIONS OF THE MERGER AGREEMENT, AND THE APPLICABLE RULES AND REGULATIONS OF
THE COMMISSION, IF BY THE EXPIRATION DATE ANY OR ALL OF SUCH CONDITIONS TO THE
OFFER HAVE NOT BEEN SATISFIED, THE PURCHASER RESERVES THE RIGHT (BUT SHALL NOT
BE OBLIGATED) TO (I) TERMINATE THE OFFER AND RETURN ALL TENDERED SHARES TO
TENDERING STOCKHOLDERS, (II) WAIVE SUCH UNSATISFIED CONDITIONS AND PURCHASE ALL
SHARES VALIDLY TENDERED OR (III) EXTEND THE OFFER, AND, SUBJECT TO THE TERMS OF
THE OFFER (INCLUDING THE RIGHTS OF STOCKHOLDERS TO WITHDRAW THEIR SHARES),
RETAIN THE SHARES WHICH HAVE BEEN TENDERED, UNTIL THE OFFER, AS SO EXTENDED BY
THE PURCHASER, SHALL EXPIRE.
Subject to the applicable rules and regulations of the Commission and the
terms of the Merger Agreement, the Purchaser expressly reserves the right, in
its sole discretion, at any time and from time to time, and regardless of
whether or not any of the events set forth in Section 15 shall have occurred or
shall have been determined by the Purchaser to have occurred, to (i) extend the
period of time during which the Offer is open and thereby delay acceptance for
payment of, and the payment for, any Shares, by giving oral or written notice of
such extension to the Depositary and (ii) amend the Offer in any respect by
giving oral or written notice of such amendment to the Depositary. Under the
terms of the Merger Agreement, however, without the prior written consent of the
Company, the Purchaser will not decrease the price per Share payable in the
Offer, change the form of consideration payable in the Offer, decrease the
number of Shares sought to be purchased in the Offer, change the Offer
conditions, waive the Minimum Condition, impose additional conditions to the
Offer, except as otherwise provided in the Merger Agreement, extend the initial
Expiration Date or amend any other terms of the Offer in any manner adverse to
the holders of any Shares. The Purchaser shall have no obligation to pay
interest on the purchase price of tendered Shares, including in the event the
Purchaser exercises its right to extend the period of time during which the
Offer is open. The rights reserved by the Purchaser in this paragraph are in
addition to the Purchaser's rights to terminate the Offer pursuant to Section
15. The Merger Agreement provides that, subject to the terms and conditions of
the Offer and the Merger Agreement and the satisfaction or waiver (to the extent
permitted) of all the conditions to the Offer as of the Expiration Date, the
Purchaser will accept for payment and pay for all Shares validly tendered and
not withdrawn pursuant to the Offer as soon as practicable after the Expiration
Date. If the conditions to the Offer are not satisfied or waived by the
Purchaser as of the Expiration Date, Purchaser will extend the Offer from time
to time for the shortest time periods permitted by law and which it reasonably
believes are necessary until the consummation of the Offer; provided that
notwithstanding the satisfaction of the conditions to the Offer, the Parent and
the Purchaser shall have the right, after consultation with the Company, to
extend the Offer until up to April 2, 1999, notwithstanding the prior
satisfaction of the conditions to the Offer.
Any extension, delay, termination, waiver or amendment will be followed as
promptly as practicable by public announcement thereof, and such announcement in
the case of an extension will be made in accordance with Rule 14e-1(d) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), no later than
9:00 A.M., New York City time, on the next business day after the previously
scheduled Expiration Date.
3
<PAGE> 6
Without limiting the manner in which the Purchaser may choose to make any public
announcement, except as provided by applicable law (including Rules 14d-4(c) and
14(d)-6(d) under the Exchange Act, which require that material changes be
promptly disseminated to holders of Shares), the Purchaser shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to the Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer or if it
waives a material condition of the Offer, the Purchaser will disseminate
additional tender offer material and extend the Offer to the extent required by
Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period
during which an offer must remain open following material changes in the terms
of the offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances, including the
materiality, of the changes. With respect to a change in price or, subject to
certain limitations, a change in the percentage of securities sought, a minimum
ten business day period from the day of such change is generally required to
allow for adequate dissemination to stockholders. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday, or a federal holiday
and consists of the time period from 12:01 A.M. through 12:00 Midnight, New York
City time.
The Company has provided the Purchaser with the Company's stockholder list
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of Transmittal
and other relevant materials will be mailed by the Purchaser to record holders
of Shares and furnished to brokers, dealers, commercial banks, trust companies
and similar persons whose names, or the names of whose nominees, appear on the
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing, for subsequent transmittal to beneficial
owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment), the
Purchaser will accept for payment and will pay for all Shares validly tendered
and not properly withdrawn on or prior to the Expiration Date as soon as
practicable after the later to occur of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions of the Offer set forth in Section 15,
including without limitation the expiration or termination of the waiting period
applicable to the acquisition of Shares pursuant to the Offer under the HSR Act.
In addition, subject to applicable rules of the Commission, the Purchaser
expressly reserves the right to delay acceptance for payment of or payment for
Shares pending receipt of any other regulatory approvals specified in Section
16. Any such delays will be effected in compliance with Rule 14e-1(c) under the
Exchange Act.
For information with respect to approvals and filings required to be
obtained or made prior to the consummation of the Offer, including under the HSR
Act, see Section 16.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates representing such Shares ("Share Certificates") or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares into the Depositary's account at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in Section
3, (ii) the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or an Agent's Message
(as defined below) in connection with a book-entry transfer, and (iii) any other
documents required by the Letter of Transmittal.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to and received by the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance for payment of such Shares pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment
4
<PAGE> 7
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payments from the Purchaser and transmitting such payments
to stockholders whose Shares have been accepted for payment. UNDER NO
CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID, REGARDLESS
OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT. If for any
reason whatsoever acceptance for payment of or payment for any Shares tendered
pursuant to the Offer is delayed or the Purchaser is unable to accept for
payment or pay for Shares tendered pursuant to the Offer, then without prejudice
to the Purchaser's rights set forth herein, the Depositary may nevertheless, on
behalf of the Purchaser and subject to Rule 14e-1(c) under the Exchange Act,
retain tendered Shares and such Shares may not be withdrawn except to the extent
that the tendering stockholder is entitled to and duly exercises withdrawal
rights as described in Section 4.
If any tendered Shares are not accepted for payment for any reason or if
Share Certificates are submitted for more Shares than are tendered, Share
Certificates evidencing unpurchased or untendered Shares will be returned
without expense to the tendering stockholder (or, in the case of Shares tendered
by book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility pursuant to the procedures set forth in Section 3, such Shares will be
credited to an account maintained at the Book Entry Transfer Facility), as
promptly as practicable following the expiration, termination or withdrawal of
the Offer.
The Parent and the Purchaser reserve the right to transfer or assign to one
or more of their affiliates all or any of their rights with the permission of
the Company, which will not be unreasonably withheld, but any such transfer or
assignment will not relieve the Parent or Purchaser of their obligations under
the Offer.
In the event that the aggregate consideration to be received by a holder
pursuant to the Offer for such holder's Shares equals an amount that includes
one-half of one cent, such amount will be rounded up to the nearest whole cent.
3. PROCEDURE FOR TENDERING SHARES. Valid Tenders. Except as set forth
below, in order for Shares to be validly tendered pursuant to the Offer, the
Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's Message
in connection with a book-entry delivery of Shares, and any other documents
required by the Letter of Transmittal, must be received by the Depositary at one
of its addresses set forth on the back cover of this Offer to Purchase on or
prior to the Expiration Date and either (i) Share Certificates evidencing
tendered Shares must be received by the Depositary at such address or such
Shares must be tendered pursuant to the procedure for book-entry transfer
described below and a Book-Entry Confirmation must be received by the
Depositary, in each case on or prior to the Expiration Date, or (ii) the
guaranteed delivery procedures described below must be complied with.
Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at the Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in the system of the
Book-Entry Transfer Facility may make book-entry delivery of Shares by causing
the Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery of
Shares may be effected through book-entry transfer at the Book-Entry Transfer
Facility, the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, together with any required signature guarantees, or an
Agent's Message in connection with a book-entry transfer, and any other
documents required by the Letter of Transmittal, must in any case be received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase on or prior to the Expiration Date, or the guaranteed delivery
procedures described below must be complied with.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND THE DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF
BOOK-
5
<PAGE> 8
ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. Signatures on Letters of Transmittal must be
guaranteed by a bank, broker, dealer, credit union, savings association or other
entity which is a member in good standing of the Securities Transfer Agents
Medallion Program (each of the foregoing being referred to as an "Eligible
Institution"), except in cases where Shares are tendered (i) by a registered
holder of Shares who has not completed either the box labeled "Special Payment
Instructions" or the box labeled "Special Delivery Instructions" on the Letter
of Transmittal or (ii) for the account of an Eligible Institution. See
Instructions 1 and 5 of the Letter of Transmittal.
If the Share Certificates are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or Share
Certificates not accepted for payment or not tendered are to be returned, to a
person other than the registered holder, the Share Certificates must be endorsed
or accompanied by appropriate stock powers, in either case, signed exactly as
the name of the registered holder appears on such certificates, with the
signatures on such certificates or stock powers guaranteed as aforesaid. See
Instructions 1 and 5 of the Letter of Transmittal.
If Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) must accompany each such delivery.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available, or such stockholder cannot deliver the Share Certificates and all
other required documents to reach the Depositary on or prior to the Expiration
Date, or such stockholder cannot complete the procedure for delivery by
book-entry transfer on a timely basis, such Shares may nevertheless be tendered,
provided that all of the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form made available by the Purchaser is received
by the Depositary as provided below on or prior to the Expiration
Date; and
(iii) the Share Certificates (or a Book-Entry Confirmation), representing
all tendered Shares in proper form for transfer, together with the
Letter of Transmittal (or a facsimile thereof) properly completed and
duly executed, with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message) and any other
documents required by the Letter of Transmittal are received by the
Depositary within three Nasdaq National Market trading days after the
date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution and a representation that the
stockholder owns the Shares tendered within the meaning of, and that the tender
of the Shares effected thereby complies with, Rule 14e-4 under the Exchange Act,
each in the form set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share Certificates for, or of Book-Entry
Confirmation with respect to, such Shares, a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof), together with any
required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message), and any other documents required by the Letter of Transmittal.
Accordingly, payment might not be made to all tendering stockholders at the same
time and will depend upon when Share Certificates or Book-Entry Confirmations of
such Shares are received into the Depositary's account at the Book-Entry
Transfer Facility.
Appointment as Proxy. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser, and each of them,
as such stockholder's attorneys-in-fact and proxies,
6
<PAGE> 9
with full power of substitution, in the manner set forth in the Letter of
Transmittal, to the full extent of such stockholder's rights with respect to the
Shares tendered by such stockholder and accepted for payment by the Purchaser
(and with respect to any and all other Shares, other securities or rights issued
or issuable in respect of such Shares on or after the date hereof). All such
powers of attorney and proxies shall be considered irrevocable and coupled with
an interest in the tendered Shares. Such appointment will be effective when, and
only to the extent that, the Purchaser accepts such Shares for payment. Upon
such acceptance for payment, all prior powers of attorney and proxies given by
such stockholder with respect to such Shares (and such other Shares and
securities) will be revoked without further action, and no subsequent powers of
attorney and proxies may be given nor any subsequent written consents executed
(and, if given or executed, will not be deemed effective). The designees of the
Purchaser will, with respect to the Shares (and such other Shares and
securities) for which such appointment is effective, be empowered to exercise
all voting and other rights of such stockholder as they in their sole discretion
may deem proper at any annual or special meeting of the Company's stockholders
or any adjournment or postponement thereof, by written consent in lieu of any
such meeting or otherwise. The Purchaser reserves the right to require that, in
order for Shares to be deemed validly tendered, immediately upon the Purchaser's
payment for such Shares, the Purchaser must be able to exercise full voting
rights with respect to such Shares and other securities, including voting at any
meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Purchaser in its sole discretion, which
determination shall be final and binding on all parties. The Purchaser reserves
the absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance for payment of which may in the opinion of its
counsel be unlawful. The Purchaser also reserves the absolute right to waive any
of the conditions of the Offer or any defect or irregularity in any tender of
Shares of any particular stockholder whether or not similar defects or
irregularities are waived in the case of other stockholders. No tender of Shares
will be deemed to have been validly made until all defects and irregularities
have been cured or waived. None of the Purchaser, the Parent, any of their
affiliates or assigns, the Dealer Managers, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities in tenders or incur any liability for failure to give
any such notification. The Purchaser's interpretation of the terms and
conditions of the Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding.
Backup Federal Income Tax Withholding and Substitute Form W-9. Under the
"backup withholding" provisions of federal income tax law, the Depositary may be
required to withhold 31% of the amount of any payments of cash pursuant to the
Offer. In order to avoid backup withholding, each stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the payor of such
cash with such stockholder's correct taxpayer identification number ("TIN") on a
substitute Form W-9 and certify, under penalties of perjury, that such TIN is
correct and that such stockholder is not subject to backup withholding. If a
stockholder does not provide its correct TIN or fails to provide the
certifications described above, the Internal Revenue Service ("IRS") may impose
a penalty on such stockholder and payment of cash to such stockholder pursuant
to the Offer may be subject to backup withholding of 31%. All stockholders
surrendering Shares pursuant to the Offer should complete and sign the
substitute Form W-9 included in the Letter of Transmittal to provide the
information and certification necessary to avoid backup withholding (unless an
applicable exemption exists and is proved in a manner satisfactory to the
Depositary). Certain stockholders (including among others all corporations and
certain foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 of the
Letter of Transmittal.
Other Requirements. The Purchaser's acceptance for payment of Shares
tendered pursuant to any of the procedures described above will constitute a
binding agreement between the tendering stockholder and the Purchaser upon the
terms and subject to the conditions of the Offer, including the tendering
stockholder's representation and warranty that the stockholder is the holder of
the Shares within the meaning of, and that the tender of the Shares complies
with, Rule 14e-4 under the Exchange Act.
7
<PAGE> 10
4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer are
irrevocable, except that Shares tendered pursuant to the Offer may be withdrawn
at any time on or prior to the Expiration Date and, unless theretofore accepted
for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any
time after April 22, 1999. If the Purchaser extends the Offer, is delayed in its
acceptance for payment of Shares or is unable to purchase Shares validly
tendered pursuant to the Offer for any reason, then without prejudice to the
Purchaser's rights under the Offer, the Depositary may nevertheless, on behalf
of the Purchaser, retain tendered Shares and such Shares may not be withdrawn
except to the extent that tendering stockholders are entitled to withdrawal
rights as described in this Section 4. Any such delay in acceptance for payment
will be accompanied by an extension of the Offer to the extent required by law.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name of the registered holder, if different from that of the person who
tendered such Shares. If Share Certificates to be withdrawn have been delivered
or otherwise identified to the Depositary, then prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and the signatures on the notice of withdrawal must
be guaranteed by an Eligible Institution unless such Shares have been tendered
for the account of any Eligible Institution. If Shares have been tendered
pursuant to the procedure for book-entry transfer as set forth in Section 3, any
notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares, in which
case a notice of withdrawal will be effective if delivered to the Depositary by
any method of delivery described in the first sentence of this paragraph.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. The Purchaser
reserves the absolute right to reject any and all withdrawals determined by it
not to be in proper form. The Purchaser also reserves the absolute right to
waive any defect or irregularity in any withdrawal of Shares of any particular
stockholder whether or not similar defects or irregularities are waived in the
case of the other stockholders. No withdrawal of Shares will be deemed to have
been validly made until all defects and irregularities have been cured or
waived. None of the Purchaser, the Parent, any of their affiliates or assigns,
the Dealer Managers, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defects or irregularities in
any notice of withdrawal or incur any liability for failure to give any such
notification.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not to have been validly tendered for purposes of the
Offer. However, withdrawn Shares may be re-tendered at any time prior to the
Expiration Date by following one of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following is a discussion
of the material United States federal income tax consequences relating to the
sale or exchange of Shares pursuant to the Offer and/or the Merger. Unless
otherwise indicated, this summary deals only with U.S. Stockholders (as defined
below) who hold their Shares as capital assets. This discussion is based on the
Internal Revenue Code of 1986, as amended (the "Code"), the proposed, temporary
and final Treasury regulations promulgated thereunder, and any relevant
administrative rulings or pronouncements or judicial decisions, all as in effect
on the date hereof and all of which are subject to change, possibly with
retroactive effect. This discussion does not address all of the tax consequences
that may be relevant to a particular Stockholder in light of that Stockholder's
specific circumstances, nor does it discuss the U.S. federal income tax
consequences that may be applicable to certain types of Stockholders, such as
Stockholders who have received their Shares pursuant to the exercise of employee
stock options or otherwise as compensation, dealers in securities, financial
institutions, tax-exempt entities, life insurance companies, persons holding
their Shares as a part of a hedging, integrated, conversion or constructive sale
transaction or as part of a straddle, or persons whose functional currency is
not the U.S. dollar, who may be subject to special rules and/or limitations
under the Code which are not discussed below. In addition, the following
discussion does not discuss the alternative minimum tax consequences, if any, of
the
8
<PAGE> 11
sale or exchange of Shares pursuant to the Offer or the Merger, or the state,
local or foreign tax consequence of such sale or exchange of Shares.
For purposes of this discussion, (i) the term "Stockholder" refers to a
beneficial owner of Shares, (ii) the term "U.S. Stockholder" means a Stockholder
who is (a) a citizen or resident of the United States, (b) a corporation or
partnership created or organized in the United States or under the laws of the
United States or any political subdivision thereof, (c) an estate the income of
which is subject to United States federal income taxation regardless of its
source or (d) a trust which is subject to the supervision of a court within the
United States and the control of one or more United States persons (as defined
in Section 7701 (a)(30) of the Code), and (iii) the term "Non-U.S. Stockholder"
means a Stockholder who is not a U.S. Stockholder. ALL STOCKHOLDERS SHOULD
CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE
OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICABILITY AND EFFECT OF THE
ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX
LAWS AND CHANGES IN SUCH TAX LAWS.
The sale or exchange of Shares pursuant to the Offer or the Merger will be
a taxable transaction for U.S. federal income tax purposes. A tendering U.S.
Stockholder generally will recognize gain or loss on such sale or exchange of
Shares in an amount equal to the difference between the cash received by such
U.S. Stockholder pursuant to the Offer or the Merger and the U.S. Stockholder's
adjusted tax basis in the Shares exchanged therefor. Gain or loss will be
calculated separately for each block of Shares (i.e., Shares acquired at the
same cost in a single transaction) tendered and purchased pursuant to the Offer
or converted in the Merger, as the case may be. For federal income tax purposes,
such gain or loss generally will be capital gain or loss and generally will be
long-term capital gain or loss if the relevant U.S. Stockholder held his, her or
its Shares for more than one year as of the date the Purchaser accepts such
Shares for payment pursuant to the Offer or as of the effective date of the
Merger, as the case may be. The long-term capital gains of individuals, estates
and certain trusts generally are eligible for reduced rates of taxation. Capital
losses generally must be used only to offset capital gains.
Any gain realized by a Non-U.S. Stockholder upon the sale or exchange of
Shares pursuant to the Offer and/or the Merger generally will not be subject to
U.S. federal income or withholding tax unless (i) such gain is effectively
connected with a U.S. trade or business conducted by the Non-U.S. Stockholder in
the United States, (ii) in the case of a Non-U.S. Stockholder who is an
individual, such individual is present in the United States for 183 days or more
in the taxable year during which the Purchaser accepts such Shares for payment
pursuant to the Offer or which includes the effective date of the Merger, as the
case may be, and certain other conditions are met, or (iii) in the case of a
Non-U.S. Stockholder who directly, indirectly or constructively owns more than
5% of the Shares at any time during the five year period ending on the date the
relevant Shares are disposed of, the Company is or has been a "U.S. real
property holding corporation" within the meaning of Section 897(c)(2) of the
Code (which the Company does not expect to be the case).
6. PRICE RANGE OF SHARES; DIVIDENDS. According to the Company's 1997
Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (the
"1997 Annual Report"), the Shares are listed and traded on the Nasdaq National
Market ("Nasdaq") under the symbol "RAZR." The following table sets forth, for
the quarters indicated, the high and low sales prices per Share on Nasdaq with
respect to periods occurring in 1997, 1998 and 1999 as reported by the Dow Jones
News Service. According to the 1997 Annual Report, the Company has not paid any
dividends on the Shares since its initial public offering.
<TABLE>
<CAPTION>
HIGH LOW
----- -----
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1997:
First Quarter............................................ 15.75 12.88
Second Quarter........................................... 18.13 13.38
Third Quarter............................................ 19.38 16.00
Fourth Quarter........................................... 20.75 16.25
</TABLE>
9
<PAGE> 12
<TABLE>
<CAPTION>
HIGH LOW
----- -----
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1998:
First Quarter............................................ 23.25 17.50
Second Quarter........................................... 18.38 11.00
Third Quarter............................................ 14.75 8.63
Fourth Quarter........................................... 12.63 8.13
YEAR ENDED DECEMBER 31, 1999:
First Quarter (through February 19, 1999)................ 13.88 9.88
</TABLE>
On February 12, 1999, the last full trading day prior to announcement of
the Offer, the closing sale price per Share reported on Nasdaq was $9 7/8. On
February 19, 1999, the last full trading day before commencement of the Offer,
the closing sale price per Share reported on Nasdaq was $13.75. STOCKHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise noted
in this Offer to Purchase, the information concerning the Company contained in
this Offer to Purchase, including financial information, has been taken from or
based upon publicly available documents and records on file with the Commission
and other public sources. The summary information concerning the Company in this
Section 7 and elsewhere in this Offer to Purchase is derived from the Company's
1997 Annual Report, the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1998, June 30, 1998 and September 30, 1998 (together,
the "1998 Quarterly Reports") and other publicly available information. The
summary information set forth below is qualified in its entirety by reference to
such reports (which may be obtained and inspected as described below) and should
be considered in conjunction with the more comprehensive financial and other
information in such reports and other publicly available reports and documents
filed by the Company with the Commission and other publicly available
information. Although the Purchaser and the Parent do not have any knowledge
that would indicate that any statements contained herein based upon such reports
are untrue, neither the Purchaser nor the Parent assumes any responsibility for
the accuracy or completeness of the information contained therein, or for any
failure by the Company to disclose events that may have occurred and may affect
the significance or accuracy of any such information but which are unknown to
the Purchaser and the Parent.
General. The Company was incorporated under the laws of the State of
Delaware on June 7, 1977. The Company is listed on Nasdaq and is a designer,
manufacturer and marketer of store, value and premium-brand consumer products.
The Company has three product segments which consist of (i) razors and blades,
sales of which are broken into three product lines: shaving razors and blades,
bladed hand tools and blades, and specialty industrial and medical blades, (ii)
cotton and foot care products and (iii) custom bar soaps. The Company
distributes its products to the retail and professional trades in the United
States and in selected international markets.
The Company's principal executive offices are located at One Razor Blade
Lane, P.O. Box 979, Verona, Virginia 24482. The telephone number of the Company
at such offices is (540) 248-8000.
Financial Information. Set forth below is certain selected consolidated
financial data for the Company which was derived from the 1997 Annual Report and
the 1998 Quarterly Reports. More comprehensive financial information is included
in the reports (including management's discussion and analysis of financial
condition and results of operations) and other documents filed by the Company
with the Commission, and the following financial data is qualified in its
entirety by reference to such reports and other documents including the
financial information and related notes contained therein. Such reports and
other documents may be examined and copies thereof may be obtained from the
offices of the Commission and Nasdaq in the manner set forth below.
10
<PAGE> 13
AMERICAN SAFETY RAZOR COMPANY
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FOR THE
NINE MONTHS ENDED FOR THE FISCAL YEAR ENDED
----------------- ----------------------------
SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1998 1997 1996
<S> <C> <C> <C>
INCOME STATEMENT DATA
Net sales...................................... $220,433 $296,607 $260,636
Cost of sales.................................. $150,223 $196,991 $169,949
Income before income taxes..................... $ 10,921 $ 24,639 $ 21,598
Net income..................................... $ 6,585 $ 15,069 $ 13,173
Basic earnings per share....................... $ 0.54 $ 1.25 $ 1.09
Weighted average number of shares
outstanding................................. 12,107 12,094 12,093
Diluted earnings per share..................... $ 0.54 $ 1.23 $ 1.09
Weighted average number of shares outstanding
(on a diluted basis)........................ 12,246 12,255 12,139
BALANCE SHEET DATA (AT PERIOD END)
Total assets................................... $262,839 $254,081 $229,997
Long-term obligations, including current
portion..................................... $127,275 $123,612 $112,181
Total stockholders' equity..................... $ 66,519 $ 59,439 $ 44,523
</TABLE>
The Shares are registered under the Exchange Act. Accordingly, the Company
is subject to the informational filing requirements of the Exchange Act and in
accordance therewith is obligated to file periodic reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. The Company is required to disclose in such proxy
statements certain information, as of particular dates, concerning the Company's
directors and officers, their remuneration, options granted to them, the
principal holders of the Company's securities and any material interest of such
persons in transactions with the Company. Such reports, proxy statements and
other information should be available for inspection at the public reference
facilities of the Commission located in Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and should also be available for inspection and copying
at prescribed rates at the regional offices of the Commission located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661,
and Seven World Trade Center, Suite 1300, New York, New York 10048. Such
reports, proxy statements and other information may also be obtained at the Web
site that the Commission maintains at http://www.sec.gov. Copies of this
material may also be obtained by mail, upon payment of the Commission's
customary fees, from the Commission's principal office at 450 Fifth Street,
N.W., Washington, D.C. 20549. Such materials should also be available for
inspection at the library of Nasdaq, 1735 K Street, N.W., Washington, D.C.
20006.
8. CERTAIN INFORMATION CONCERNING THE PURCHASER, PARENT, JWCP, JWC
ADVISORS, JWC ASSOCIATES AND JWC INC. The Purchaser, a Delaware corporation and
a direct, wholly owned subsidiary of Parent, was organized in connection with
the Offer and the Merger and has not carried on any activities to date other
than those incident to its formation and the commencement of the Offer. The
Parent, a Delaware corporation and a direct wholly owned subsidiary of J.W.
Childs Equity Partners, II L.P., a Delaware limited partnership ("JWCP"), was
organized in connection with the Offer and the Merger and has not carried on any
activities to date other than those incident to its formation and the
commencement of the Offer.
JWCP was organized in 1998. JWCP was established to make privately
negotiated equity investments in leveraged buyouts and recapitalizations of
small and middle-market growth companies in partnership with management. The
General Partner of JWCP is J.W. Childs Advisors II, L.P., a Delaware limited
partnership ("JWC Advisors"), controlled, through an intermediate limited
partnership, J.W. Childs Associates, L.P. ("JWC Associates"), by J.W. Childs
Associates, Inc. ("JWC Inc."). JWCP, JWC Advisors, JWC Associates and JWC Inc.
are collectively referred to as "J.W. Childs."
11
<PAGE> 14
The principal executive offices of the Purchaser, the Parent and J.W.
Childs are located at One Federal Street, 21(st) Floor, Boston, Massachusetts
02110.
The name, citizenship, business address, present principal occupation or
employment, and five year employment history of each of the directors and
executive officers of the Purchaser, the Parent and J.W. Childs and are set
forth in Schedule I hereto.
Except as described in this Offer to Purchase, none of the Purchaser, the
Parent, J.W. Childs or, to their best knowledge, any of the persons listed on
Schedule I hereto or any associate or majority-owned subsidiary of the
Purchaser, the Parent, J.W. Childs or any of the persons so listed, beneficially
owns or has a right to acquire directly or indirectly any Shares, and none of
the Purchaser, the Parent, J.W. Childs or, to their best knowledge, any of the
persons or entities referred to above, or any of the respective executive
officers, directors or subsidiaries of any of the foregoing, has effected any
transactions in the Shares during the past 60 days.
9. SOURCE AND AMOUNT OF FUNDS. The aggregate amount to be paid to effect
the Offer and the Merger (including the payments of fees and expenses related
thereto) will be approximately $188.6 million. A total of approximately $310.8
million to $313.3 million is expected to be required to (i) fund payment of the
cash consideration in the Offer and the Merger, (ii) repay or repurchase certain
indebtedness of the Company (including pursuant to the Debt Offer (as defined in
Section 11 ("The Merger Agreement; The Shareholders Agreement -- The Debt
Offer")) and (iii) pay the fees and expenses incurred in connection with such
transactions and the financings thereof. It is currently contemplated that the
transactions contemplated by the Merger Agreement will be funded either by (a)
(i) approximately $165.8 million of borrowings by the Company pursuant to a
senior secured credit facility (the "New Credit Facility") with a group of
financial institutions led by NationsBank, N.A., NationsBanc Montgomery
Securities LLC and DLJ Capital Funding, Inc., which facilities provide for
aggregate commitments of up to $190 million, up to $165 million of which will be
available in the form of term loans and $25 million of which will be available
in the form of a revolving credit facility, (ii) approximately $55 million of
unsecured, pay-in-kind debt issued by the Parent to JWCP or one of its
affiliates (the "JWC Note") and (iii) approximately $90 million in equity
investment contributions made by JWCP or one of its affiliates, to the Parent
(the "Equity Investment") or (b) (i) approximately $123.3 million of borrowings
by the Company under the New Credit Facility, (ii) approximately $100 million in
gross proceeds from the issuance by the Company of new senior subordinated notes
(the "New Notes") and (iii) the Equity Investment. If the Debt Offer is not
consummated, the financing required for such transactions will be $208.6 million
and will be funded by (i) approximately $63.6 million of borrowings by the
Company pursuant to the New Credit Facility, (ii) the JWC Note and (iii) the
Equity Investment.
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. On October 24,
1997, the Company engaged PaineWebber Incorporated ("PaineWebber") as its
financial advisor to evaluate strategic alternatives available to the Company,
including a possible sale transaction. As part of this engagement, PaineWebber
solicited interest from a select group of potential purchasers approved by the
Company's Board of Directors.
In early December 1997, a representative of PaineWebber contacted a
representative of J.W. Childs regarding a potential interest in purchasing the
Company. On December 4, 1997, J.W. Childs executed a customary confidentiality
and standstill agreement with respect to the exchange of non-public information
between the Company and J.W. Childs. Following the execution of the
confidentiality and standstill agreement, J.W. Childs conducted a preliminary
due diligence investigation of the Company and decided not to pursue a
transaction.
On May 13, 1998, after conducting an extensive sale process, the Board of
Directors determined that it was not in the best interest of the Company's
stockholders to continue to pursue a sale transaction at that time.
On or about November 17, 1998, representatives of J.W. Childs contacted a
representative of PaineWebber regarding its renewed interest in the Company and
submitted to representatives of TJC an initial non-binding indication of
interest to acquire 100% of the Company at $13.50 to $14.50 per share.
12
<PAGE> 15
Following the receipt of J.W. Childs' initial indication of interest, a
representative of TJC advised PaineWebber of its renewed interest in pursuing a
sale transaction. Subsequently, PaineWebber contacted selected parties
potentially interested in purchasing the Company.
On December 17, 1998, following an initial due diligence investigation,
J.W. Childs submitted a revised offer of $14.00 per share. Subsequent to this
revised offer, the Company and its legal counsel prepared and delivered to J.W.
Childs an initial draft of the Merger Agreement and the Shareholders Agreement.
Throughout December 1998 and January 1999, representatives of J.W. Childs
conducted an extensive due diligence investigation of the Company, including but
not limited to the business, operations and financial conditions as well as
numerous discussions with members of the Company's senior management. During
this period of time, TJC, PaineWebber and the Company's legal advisors continued
to negotiate with J.W. Childs and its legal counsel regarding the terms of the
transaction.
On February 1, 1999, following further discussions between J.W. Childs,
PaineWebber and TJC, J.W. Childs submitted a final offer of $14.125 per share.
On February 7, 1999, the Company's Board of Directors held a telephonic
meeting to consider the proposed transaction. At the meeting, the Board of
Directors reviewed the terms of the proposed transaction and the provisions
contained in the draft Merger Agreement and the Shareholders Agreement, and the
other related agreements, including the agreements pertaining to the financing
arrangements for the Offer and the Merger. The Company's Board of Directors also
reviewed a summary of the sale process compiled by PaineWebber. The Company's
legal counsel reviewed with the Company's Board of Directors the current terms
contained in the draft agreements. In addition to discussing these terms, the
presentation by legal counsel included a discussion of the fiduciary duties of
the Company's Board of Directors. After discussion, the Company's Board of
Directors directed management of the Company to continue discussions with
representatives of J.W. Childs in respect of the remaining issues in the draft
agreements that were not yet resolved.
On February 11, 1999, the Company's Board of Directors held a telephonic
meeting to consider the proposed merger transaction. Members of the Company's
senior management, the Company's legal counsel and its financial advisors
updated the Company's Board of Directors of the results of the negotiations that
had occurred since the February 7, 1999 meeting of the Company's Board of
Directors. At the meeting, a representative of PaineWebber presented in detail a
financial analysis of the Company and the proposed transaction, and presented
orally, which was confirmed in writing on February 12, 1999, that the
consideration to be received by the Company's stockholders, other than the
Purchaser and the Parent, is fair from a financial point of view, subject to the
assumptions stated therein. The full text of the written opinion of PaineWebber
containing the assumptions made, the matters considered and the scope of the
review undertaken in rendering such opinion, as well as the limitations of such
opinion, is included with the Company's solicitation/ recommendation statement
on Schedule 14D-9, which is being mailed to stockholders concurrently with this
Offer to Purchase. Stockholders are urged to read the full text of such opinion
in conjunction with the Offer. After discussion and consideration, the Company's
Board of Directors voted unanimously to approve the Merger, the Merger Agreement
and all of the related transactions, subject to the satisfactory negotiation of
certain terms of the financing and the completion of due diligence by J.W.
Childs.
Also on February 11, 1999, the Company's disinterested directors discussed
the Merger Agreement and certain affiliate agreements including the Financial
Advisory Agreement between the Company and TJC. In connection with the Financial
Advisory Agreement the Company would have been obligated to pay to TJC up to 2%
of the aggregate consideration paid in any transaction involving the Company.
With the advice of PaineWebber, considering the typical and appropriate fees
currently paid to financial advisors in similar transactions, the Company and
TJC entered into an Amended and Restated Financial Advisory Agreement dated as
of February 12, 1999 which provided for a lump sum payment of 2.5 million. This
lump sum payment, representing approximately 0.8% of the total consideration
payable in the Offer, is payable upon the consummation of the Offer. The
disinterested directors unanimously approved the form of this Amended and
Restated Financial Advisory Agreement.
13
<PAGE> 16
The Merger Agreement, the Shareholders Agreement and other related
transaction documents were executed and delivered by each of the Parent, the
Purchaser and the Company after the close of business on February 12, 1999,
following the satisfactory negotiation of certain terms of the financing and the
completion of due diligence by J.W. Childs. On February 15, 1999, the Merger was
publicly announced jointly by J.W. Childs and the Company.
11. THE MERGER AGREEMENT; THE SHAREHOLDERS AGREEMENT. The following is a
summary of the Merger Agreement and the Shareholders Agreement among the Parent,
the Purchaser and the Principal Holders (the "Shareholders Agreement"), which
summaries are qualified in their entirety by reference to the Merger Agreement,
the Shareholders Agreement and such other agreements which are filed as exhibits
to the Tender Offer Statement on Schedule 14D-1.
The Offer. The Merger Agreement provides for the commencement of the Offer
as soon as practicable, and in any event within five business days from the date
of the execution of the Merger Agreement. The obligation of the Purchaser to
accept for payment or pay for any Shares tendered pursuant to the Offer is
subject to the satisfaction or waiver (to the extent permitted by the Merger
Agreement) of the conditions set forth in Section 15 (the "Offer Conditions").
The Parent or the Purchaser may waive any such condition in whole or in part and
make any other changes in the terms and conditions of the Offer, subject to the
terms of the Merger Agreement.
Under the terms of the Merger Agreement, without the prior written consent
of the Company, the Purchaser will not decrease the price per Share payable in
the Offer, change the form of consideration payable in the Offer, decrease the
number of Shares sought to be purchased in the Offer, change the Offer
Conditions, waive the Minimum Condition, impose additional conditions to the
Offer, except as otherwise provided in the Merger Agreement, extend the initial
Expiration Date or amend any other terms of the Offer in any manner adverse to
the holders of any Shares. The Purchaser shall have no obligation to pay
interest on the purchase price of tendered Shares, including in the event the
Purchaser exercises its right to extend the period of time during which the
Offer is open. The rights reserved by the Purchaser in this paragraph are in
addition to the Purchaser's rights to terminate the Offer pursuant to Section
15. The Merger Agreement provides that, subject to the terms and conditions of
the Offer and the Merger Agreement and the satisfaction or waiver (to the extent
permitted) of all the Offer Conditions as of the Expiration Date, the Purchaser
will accept for payment and pay for all Shares validly tendered and not
withdrawn pursuant to the Offer as soon as practicable after the Expiration
Date. If the Offer Conditions are not satisfied or waived by the Purchaser as of
the Expiration Date, the Purchaser will extend the Offer from time to time for
the shortest time periods permitted by law and which it reasonably believes are
necessary until the consummation of the Offer; provided that notwithstanding the
satisfaction of the Offer Conditions, the Parent and the Purchaser shall have
the right, after consultation with the Company, to extend the Offer until up to
April 2, 1999, notwithstanding the prior satisfaction of the Offer Conditions.
Composition of the Board of Directors After the Offer. The Merger
Agreement provides that, promptly upon the consummation of the 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 Shares beneficially owned by Parent or
its affiliates bears to the total number of fully diluted Shares then
outstanding, and the Company shall 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 or increasing the size of the
Board; provided, however, that prior to the Effective Time, 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.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the satisfaction or waiver of the conditions thereof (and including those
described in Section 15) and in accordance with the DGCL, at the Effective Time,
the Purchaser shall be merged with and into the Company. Following the Merger,
the separate corporate existence of the Purchaser shall cease and the Company
shall continue as the
14
<PAGE> 17
surviving corporation. At the Parent's election, any direct or indirect
subsidiary of the Parent other than the Purchaser may be merged with and into
the Company instead of the Purchaser.
Certificate of Incorporation, By-laws, Directors and Officers After the
Merger. The Merger Agreement provides that 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 its terms and applicable law. At the Effective Time,
the By-Laws of the Purchaser shall be the By-Laws of the Surviving Corporation
until thereafter amended in accordance with their terms and applicable law. The
Merger Agreement further provides that 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 successors
are duly elected and qualified, or their earlier death, resignation or removal.
The officers of the Company immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation, in each case until their
respective successors are duly elected and qualified, or their earlier death,
resignation or removal; provided that, promptly upon the payment by the
Purchaser for Shares pursuant to the Offer, any partners, officers or affiliates
of TJC who are also officers of the Company immediately prior to the Effective
Time shall resign as officers of the Company.
Conversion of Shares. Pursuant to the Merger Agreement, at the Effective
Time, each Share issued and outstanding immediately prior to the Effective Time
(other than any Shares held by Parent, the Purchaser, any wholly owned
subsidiary of the Parent 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, shall be canceled and shall cease to exist with no payment being made
with respect thereto, and other than Dissenting Shares) shall be converted into
the right to receive in cash the Offer price (the "Merger Price"), payable to
the holder thereof, and without interest, upon surrender of the certificate
formerly representing such Share.
Conversion of Options. The Merger Agreement provides that, immediately
prior to the Effective Time, each outstanding stock option granted under the
Company's stock option plan, whether or not then exercisable or vested, shall
become fully exercisable and vested and shall be canceled by the Company, and
the holder thereof shall be entitled to receive immediately following the
Effective Time from the Company in consideration for such cancellation an amount
in cash equal to the product of (a) the excess of the Merger Price over the
exercise price per Share thereof and (b) the number of Shares subject to such
stock option (net of taxes required by law to be withheld with respect thereto).
Dissenting Shares. The Merger Agreement provides that Shares outstanding
immediately prior to the Effective Time and held by a holder who has not voted
in favor of or consented to the Merger and who demands in writing appraisal of
such Shares in accordance with Section 262 of the DGCL 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 the Merger Price, but
shall be entitled to receive the consideration as shall be determined pursuant
to Section 262 of the DGCL, unless and until such holder fails to perfect or
withdraws or otherwise loses his right to appraisal and payment under the DGCL.
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 Shares, withdrawals of such demands and
any other instruments served pursuant to the DGCL and received by the Company
and, prior to the Effective Time, Parent shall have the right to direct 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.
Stockholders Meeting. The Merger Agreement provides that if required, the
Company, acting through its Board of Directors, 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 consummation of the Offer for the purpose of considering and
taking action upon the Merger Agreement; (ii) prepare and file with, and use its
reasonable best efforts to have cleared by, the SEC a preliminary proxy
statement relating to the Merger and the Merger Agreement and use its reasonable
efforts (x) to obtain and furnish the
15
<PAGE> 18
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 the
Merger Agreement by its stockholders; and (iii) subject to the fiduciary
obligations of the Board under applicable law as determined in good faith by a
majority of the Board based on the advice of independent outside legal counsel,
(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 the Merger Agreement and the written opinion of the Company's
financial advisor that the consideration to be received by the stockholders of
the Company pursuant to the Offer and the Merger is fair to such stockholders
and (B) use its reasonable best efforts to obtain the necessary adoption of the
Merger Agreement. Pursuant to the Merger Agreement, Parent also agrees that it
will vote, or cause to be voted, all of the 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 the Merger Agreement.
The Merger Agreement provides that, notwithstanding the foregoing, in the
event that Parent, the Purchaser or any other subsidiary of Parent shall acquire
at least 90% of the outstanding Shares pursuant to the Offer, the parties
thereto agree to take all necessary and appropriate action to cause the Merger
to become effective as soon as practicable after the consummation of the Offer,
without a meeting of stockholders of the Company, in accordance with Section 253
of the DGCL.
Conduct of Business Pending the Merger. The Company has agreed that,
during the period from the date of the Merger Agreement to the Effective Time,
except pursuant to the terms of the Merger Agreement or unless Parent shall
otherwise agree in writing, the Company will, and will cause each of its
subsidiaries to conduct its operations only in, and the Company and its
subsidiaries shall not take any action other than in, the ordinary course of
business consistent with past practice and in compliance with applicable laws.
The Company has also agreed that the Company and each of its subsidiaries shall
use commercially reasonable efforts to preserve intact their business
organization, to keep available the services of their present officers and key
employees, and to preserve their present relationships with customers, suppliers
and other persons with which they have significant business relations, except,
in each case, as would not have a Material Adverse Effect (as defined below) on
the Company.
Without limiting the generality of the foregoing and except as otherwise
expressly contemplated by the Merger Agreement, the Company has agreed that the
Company and its subsidiaries shall refrain from taking various actions without
the Parent's prior written consent until the Effective Time. These prohibitions
cover, among other things, limitations on making changes to their organizational
documents, selling their capital stock, declaring or paying any dividend or
other distribution, making changes in their capital stock, increasing the
compensation payable to directors, officers and employees (except in the
ordinary course of business consistent with past practices), increasing or
granting any severance or termination pay (except to the extent required under
existing plans, policies or agreements), engaging in any material corporate
transaction, including acquisitions, incurring debt outside the ordinary course
of business consistent with past practices, entering into, renewing or amending
contracts and making capital expenditures beyond specified limits, selling,
leasing, licensing or disposing of any material assets (outside the ordinary
course of business), changing accounting or tax policies, settling any material
litigation or any litigation which relates to the transactions contemplated by
the Merger Agreement, changing the key management structure of the Company or
any of its subsidiaries, transferring or granting any rights to intellectual
property, taking any action reasonably likely to expose the Company to any claim
that the Company has violated applicable laws, rules or regulations, adopting a
plan of complete or partial dissolution or liquidation, merger, restructuring,
recapitalization or other reorganization of the Company or any of its active
subsidiaries, paying or discharging any claims, liabilities or obligations
outside the ordinary course of business consistent with past practices, entering
into any collective bargaining agreement and taking any actions that would make
any of the representations and warranties of the Company contained in the Merger
Agreement untrue and incorrect or result in any of the Offer Conditions not
being satisfied.
Access to Information. Pursuant to the Merger Agreement from the date
thereof to the Effective Time, the Company shall, and shall cause its
subsidiaries, and each of their respective officers, directors, employees,
16
<PAGE> 19
counsel, advisors and representatives (collectively, the "Company
Representatives") to, provide the Parent and the Purchaser and their respective
officers, employees, counsel, advisors and representatives and financing sources
(collectively, the "Parent Representatives") reasonable access, consistent with
applicable law, at all reasonable times to the offices and other facilities and
to the books and records of the Company and its subsidiaries, and will permit
the Parent and the Purchaser to make inspections of such as either of them may
reasonably require, 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 other information with respect to the business
and operations of the Company and its subsidiaries as the Parent and the
Purchaser may from time to time reasonably request.
Efforts. The Merger Agreement provides that, subject to the terms and
conditions thereof, each of the parties thereto shall use its reasonable best
efforts to ensure that the conditions set forth in the Merger Agreement are
satisfied and to consummate and make effective the transactions contemplated by
the Offer, the Merger and the Merger Agreement as promptly as practicable. The
Company shall also provide all reasonable cooperation in connection with any
financing of the Offer and the Merger.
Public Announcements. So long as the Merger Agreement is in effect, the
Parent, the Purchaser and the Company agree 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 and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by law or any listing agreement with any securities
exchange.
Employment Benefits Matters. The Merger Agreement provides that from and
after the Effective Time, the Parent shall cause the Company to honor and
continue to maintain in full force and effect all employee benefit arrangements
to which the Company or any of its subsidiaries is presently a party, including
but not limited to the agreements existing on the date thereof between the
Company and certain executives of the Company, provided that nothing in the
Merger Agreement shall restrict or limit the Company ability to amend or
terminate any employee benefit plan.
Pursuant to the Merger Agreement the Parent has agreed to cause the Company
to take such actions as are necessary so that, for a period of at least one year
from the Effective Time, employees of the Company and its subsidiaries
(excluding employees covered by collective bargaining agreements) will be
provided cash compensation employee benefit and incentive compensation and
similar plans and programs as will provide compensation and benefits which in
the aggregate are substantially comparable to those provided to such employees
by specified employee benefit plans; provided, however, that neither the Parent
nor the Company shall have any obligation to provide benefits substantially
comparable to any plan providing equity awards or awards based on equity awards.
The Merger Agreement further provides that in any termination or layoff of
(i) any employee as of the Effective Time as a result of the transactions
contemplated by the Merger Agreement or (ii) any employee of the Company as of
the Effective Time after the Effective Time, the Parent will cause the Company
to comply fully, if applicable, with the Worker Adjustment and Retraining
Notification Act of 1988 ("WARN") and all other applicable foreign, federal,
state and local laws, including those prohibiting discrimination and requiring
notice to employees. The Company shall not, and shall cause its subsidiaries not
to, at any time prior to 60 days after the Effective Time, effectuate a "plant
closing" or "mass layoff" as those terms are defined in WARN affecting in whole
or in part any facility, site of employment, operating unit or employee of the
Company or any subsidiary without complying fully with the requirements of WARN.
The Parent will bear the cost of compliance with (or failure to comply with) any
such laws.
Indemnification. The Merger Agreement provides that the Certificate of
Incorporation and By-laws of the Company after the Merger shall contain
provisions no less favorable with respect to indemnification than are set forth
in the Certificate of Incorporation and By-laws of the Company prior to the
Merger, and these provisions are not to be amended, repealed or otherwise
modified for a period of six years from the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who at the Effective
Time were directors, officers or employees of the Company.
17
<PAGE> 20
The Merger Agreement also provides that for six years from and after the
Effective Time, the Parent will or will cause the Company to indemnify and hold
harmless each present and former director, officer and employee of the Company,
against any costs or expenses (including reasonable attorneys' fees), judgments,
fines, losses, claims, damages or liabilities (collectively, "Costs") (but only
to the extent such Costs are not otherwise covered by insurance and paid)
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of or pertaining to matters existing or occurring at or prior to the
Effective Time, including, in any event, in connection with the Offer, the
Merger and the Merger Agreement, whether asserted or claimed prior to, at or
after the Effective Time, to the fullest extent permitted under applicable law
(and the Parent shall, or shall cause the Company to, also advance expenses as
incurred to the fullest extent permitted under applicable law, provided the
person to whom expenses are advanced provides an undertaking to repay such
advances if it is ultimately determined that such person is not entitled to
indemnification).
The Merger Agreement also provides that from and after the Effective Time,
the Parent agrees that the Company shall use its reasonable best efforts to
cause to be maintained in effect for not less than six years from the Effective
Time the current policies of the directors' and officers' liability insurance
maintained by the Company with respect to matters occurring prior to the
Effective Time; provided that the Company may substitute therefor policies of at
least the same coverage containing terms and conditions which are no less
advantageous 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 Company shall not be required to pay an
annual premium in excess of 200% of the last annual premium paid by the Company
prior to the date thereof and, if the Company is unable to obtain the insurance
required by the Merger Agreement, it shall obtain as much comparable insurance
as possible for an annual premium equal to such maximum amount.
No Solicitation of Transactions. The Merger Agreement provides that prior
to the Effective Time, the Company shall not, and shall not authorize or permit
any of its or its subsidiaries' directors, officers, employees, agents, advisors
or representatives, directly or indirectly, to (a) solicit, initiate or
encourage or knowingly facilitate the submission of any inquiries or the making
of any proposal (a "Takeover Proposal") with respect to any acquisition or
purchase of a substantial amount of the assets of the Company and its
subsidiaries, taken as a whole, or of over 15% of any class of equity securities
or convertible securities of the Company or any tender offer (including a self
tender offer) or exchange offer that if consummated would result in any person
beneficially owning 15% or more of any class of equity securities or convertible
securities of the Company or any of its subsidiaries, or any merger,
consolidation or business combination, recapitalization, reclassification,
liquidation, dissolution or similar transaction involving the Company or any of
its subsidiaries, other than the transactions contemplated by the Merger
Agreement, the Shareholders Agreement, or any other transaction the consummation
of which would reasonably be expected to impede, interfere with, prevent or
materially delay the Offer or the Merger or which would reasonably be expected
to materially dilute the benefits to the Parent and the Purchaser of the Offer
or the Merger (each an "Acquisition Transaction"), (b) negotiate, explore or
otherwise participate in discussions with any person (other than the Parent, the
Purchaser or their respective directors, officers, employees, agents and
representatives), and including any parties with which the Company has
previously engaged in discussions or negotiations with respect to any
Acquisition Transaction, or furnish to any person (other than the Parent, the
Purchaser or their respective directors, officers, employees, agents and
representatives) any information with respect to its business, properties or
assets or any of the foregoing, or otherwise cooperate in any way with, or
assist or participate in, facilitate or encourage, any effort or attempt by any
other person (other than the Parent, the Purchaser or their respective
directors, officers, employees, agents and representatives) to do or seek any of
the foregoing or (c) enter into any agreement, arrangement or understanding with
respect to, or endorse, any Takeover Proposal; provided, however, that the
foregoing shall not prohibit the Company from (i) prior to the consummation of
the Offer (A) furnishing information pursuant to a confidentiality letter
(provided for informational proposes to the Parent), with terms no less
favorable than the Confidentiality Agreement, concerning the Company and its
businesses, properties or assets to a third party who has made an unsolicited
bona fide written Takeover Proposal, or (B) engaging in discussions or
negotiations with such a third party who has made an unsolicited bona fide
written Takeover Proposal or (ii) following receipt of an unsolicited bona fide
written Takeover Proposal but prior to consummation of the Offer, failing to
make or withdrawing or
18
<PAGE> 21
modifying its recommendation of the Merger Agreement, but in each case referred
to in the foregoing clauses (i) and (ii) only to the extent that the Board of
Directors of the Company shall have concluded in good faith, on the basis of
advice from outside legal counsel and the Company's financial advisors, that (A)
such Takeover Proposal is more favorable to the stockholders of the Company than
the transactions contemplated by the Merger Agreement (taking into account all
legal, financial, regulatory and other aspects of the proposal and the person
making the proposal) and (B) such action is necessary in order for the Board of
Directors to comply with its fiduciary duties to the stockholders of the Company
under applicable law; provided, further, that the Board of Directors of the
Company shall not take any of the foregoing actions referred to in clauses (i)
and (ii) until after notice to the Parent and the Purchaser with respect to such
action and the Board of Directors shall continue to advise the Parent and the
Purchaser after taking such action. Nothing in the Merger Agreement shall
prevent the Board from taking, and disclosing to the Company's stockholders, a
position contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange
Act with regard to any tender offer. In addition, if the Board of Directors of
the Company receives an unsolicited Transaction Proposal or any inquiry with
respect to or which could lead to any Takeover Proposal, then the Company shall
promptly inform the Parent and the Purchaser orally and in writing of the terms
and conditions of such proposal and the identity of the person making it.
Special Meeting. The Company shall take no action unless compelled by
legal process to call a special meeting of stockholders of the Company except in
accordance with the Merger Agreement unless and until the Merger Agreement has
been terminated in accordance with its terms.
Disposition of Litigation. The Merger Agreement provides that the Company
will not settle any litigation currently pending, or commenced after the date
thereof, against the Company or any of its directors by any stockholder of the
Company relating to the Offer or the Merger Agreement, without the prior written
consent of the Parent. The Merger Agreement further provides that the Company
will not voluntarily cooperate with any third party which has sought or may
thereafter seek to restrain or prohibit or otherwise oppose the Offer or the
Merger and will cooperate with the Parent and the Purchaser to resist any such
effort to restrain or prohibit or otherwise oppose the Offer or the Merger.
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 the Merger
Agreement, including the Offer and the Merger and the Shareholder's Agreement,
of any state or foreign takeover law.
Restatement of Financial Advisory Agreement. The Merger Agreement provides
that the Company has amended and restated the Financial Advisory Agreement,
dated July 12, 1995, between the Company and TJC Management Corp. (the
"Financial Advisory Agreement") in consideration of the payment of fees of not
more than $2.5 million to TJC Management (the "TJC Amount") in accordance with a
payment letter acceptable to Parent (the "TJC Letter"). The parties acknowledged
in the Merger Agreement that the TJC Amount is paid in consideration of services
in connection with the Merger Agreement, as well as the transactions
contemplated thereby, and such amendment and restatement constitute conditions
of the Purchaser's willingness to enter into the Merger Agreement.
The Debt Offer. Pursuant to the Merger Agreement, the Company shall, as
soon as practicable after the date thereof, commence an offer to purchase (the
"Debt Offer") all of the Company's outstanding 9 7/8% Series B Senior Notes due
2005 (the "Senior Notes"). The Debt Offer is subject to a number of conditions,
including the consummation of the Offer. The Company shall waive any of the
conditions to the Debt Offer and make any other changes in the terms and
conditions of the Debt Offer as may be reasonably requested by the Parent, and
the Company shall not, without the Parent's prior consent, waive a condition to
the Debt Offer or make any changes to the terms and conditions of the Debt
Offer. Notwithstanding anything in the Merger Agreement, including the
immediately preceding sentence, to the contrary, the Company shall not be
required to accept for payment or pay for any Senior Notes prior to the
consummation of the Offer.
Pursuant to the Merger Agreement, the Purchaser acknowledges that the
Company is making the Debt Offer at the request and as an accommodation to the
Purchaser, and that the Debt Offer, and its terms, conditions, failure or
success, or any claims or actions relating thereto, will not be grounds for
failure of a
19
<PAGE> 22
condition, termination or delay of the Offer or the Merger, including the
conditions thereof, nor otherwise affect them. The Purchaser will pay and
reimburse the Company upon request for all fees and expenses relating to the
Debt Offer, and will indemnify the Company and its directors and officers from
and against all claims, lawsuits, losses, expenses and liabilities incurred by
any of them in connection with the Debt Offer.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including, but
not limited to, representations and warranties by the Company concerning the
Company's capitalization, required filings and consents, the Board of Directors'
approval of the Merger Agreement and the transactions contemplated thereby
(including approvals so as to render inapplicable thereto the limitation on
business combinations contained in Section 203 of the DGCL), SEC filings and
financial statements, absence of certain changes or events, business, compliance
with law, absence of litigation, employee benefit plans, environmental matters,
tax matters, intellectual property matters, insurance matters, labor matters,
real estate matters and brokers. Some of the representatives are qualified by a
Material Adverse Effect clause. "Material Adverse Effect" includes any change or
effect that would be materially adverse to the assets, liabilities, business,
operations or financial condition of the Company and its subsidiaries, taken as
a whole, except for any such change or effect resulting from general economic,
financial or market conditions in the United States.
Conditions of the Merger. Under the Merger Agreement, the respective
obligations of the 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: (i) if required by the DGCL, the stockholders of
the Company shall have duly adopted the Merger Agreement and approved the
transactions contemplated by the Merger Agreement pursuant to the requirements
of the Company's certificate of incorporation and applicable law (which the
Company has represented shall be solely the affirmative vote of a majority of
the outstanding Shares), (ii) the Purchaser shall have accepted for payment and
paid for Shares pursuant to the Offer in accordance with the terms thereof;
provided, that this condition shall be deemed to have been satisfied with
respect to the Parent 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, (iii) 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;
provided that the party invoking this condition shall have used its reasonable
best efforts to prevent the entry of such order, judgment, decree, injunction or
ruling and to appeal as promptly as practicable any such order, judgment,
decree, injunction or ruling, and (iv) any waiting period applicable to the
Merger under the HSR Act shall have terminated or expired.
Termination Events. The Merger Agreement can be terminated and the Offer
and the Merger contemplated thereby may be abandoned at any time prior to the
Effective Time, notwithstanding approval thereof by the stockholders of the
Company:
(a) by mutual written consent of the Parent and the Company;
(b) by the Parent or the Company, if there shall be any statute, law, rule
or regulation that makes consummation of the Offer or the Merger
illegal or prohibited or if any court or other governmental entity of
competent jurisdiction or located or having jurisdiction within the
United States or any country or economic region in which either the
Company or the Parent, directly or indirectly, has material assets or
operations shall have issued, enacted, entered, promulgated or enforced
any final order, judgment, decree, injunction, or ruling or taken any
other action restraining, enjoining or otherwise prohibiting the Offer
or the Merger and such order, judgment, decree, injunction or ruling
shall have become nonappealable;
(c) by the Parent or the Company if (i) the Offer is terminated or
withdrawn pursuant to its terms without any Shares being purchased
thereunder or (ii) if the Purchaser shall have failed to pay for Shares
pursuant to the Offer within 55 days following the date of the Merger
Agreement; provided, however, that neither the Parent nor the Company,
as the case may be, may terminate the Merger Agreement as described in
this paragraph, if the Purchaser's termination or withdrawal of the
Offer
20
<PAGE> 23
or failure to pay for Shares pursuant to the Offer has been caused by
or results from the failure of such terminating party to perform in any
material respects any of its covenants or agreements contained in the
Merger Agreement or a material breach of such party's representations
and warranties contained in the Merger Agreement;
(d) by the Company if (i) the Offer shall not be commenced within five
business days following the date of execution of the Merger Agreement,
provided, that the failure to so commence has not been caused by and
does not result from the failure of the Company to perform in any
material respect any of its representations, warranties, covenants or
agreements contained in the Merger Agreement, (ii) there shall have
been a breach of any representation, warranty, covenant or agreement
(without regard to any materiality or Material Adverse Effect
qualifier) on the part of the Parent or the Purchaser contained in the
Merger Agreement which materially adversely affects the Parent's or the
Purchaser's ability to consummate (or materially delays commencement or
consummation of) the Offer, and, with respect to any such breach that
is reasonably capable of being cured, which shall not have been cured
prior to the earlier of (A) 10 business days following notice of such
breach and (B) two business days prior to the Expiration Date, (iii)
the Purchaser shall have terminated the Offer, (iv) any of the
commitment letters for the financing of the Offer and the Merger shall
have been withdrawn, terminated or modified in an adverse manner to the
Company or (v) prior to the purchase of Shares pursuant to the Offer,
any person shall have made a bona fide Takeover Proposal (A) that the
Board of Directors of the Company determines in its good faith judgment
in consultation with its financial advisor, is more favorable to the
Company's stockholders than the Offer and the Merger (taking into
account all legal, financial, regulatory and other aspects of the
proposal and the person making the proposal) and (B) as a result of
which a majority of the Board of Directors concludes in good faith on
the advice of independent outside legal counsel to the Company that
termination of the Merger Agreement is necessary in order for the Board
of Directors to comply with its fiduciary obligations under applicable
law; provided, that such termination under this clause (v) shall not be
effective until the Company has made payment of the Fee and Expenses
(as defined below) reimbursement required by the Merger Agreement; or
(e) by the Parent prior to the purchase of Shares pursuant to the Offer, if
(i) there shall have been a breach of any representation or warranty on
the part of the Company contained in the Merger Agreement (without
regard to any materiality or Material Adverse Effect qualifier) which
would reasonably be expected to have a Material Adverse Effect on the
Company or which would materially adversely affect (or materially
delay) the commencement or consummation of the Offer, (ii) there shall
have been a breach of any covenant or agreement on the part of the
Company contained in the Merger Agreement (without regard to any
materiality or Material Adverse Effect qualifier) which would
reasonably be expected to have a Material Adverse Effect on the Company
or which would materially adversely affect (or materially delay) the
consummation of the Offer, which, in the case of clause (i) or (ii), if
such breach is reasonably capable of being cured, such breach shall not
have been cured prior to the earlier of (A) 10 days following notice of
such breach and (B) two business days prior to the Expiration Date,
(iii) the Company shall effect, or enter into any agreement with
respect to, an Acquisition Transaction with any person (other than the
Parent or the Purchaser) or the Board of Directors has resolved to do
so, (iv) the Board of Directors shall have withdrawn or modified in a
manner adverse to the Purchaser its approval or recommendation of the
Offer or the Merger or shall have recommended another offer or
transaction, or shall have resolved to effect any of the foregoing or
(v) the Minimum Condition shall not have been satisfied by the
Expiration Date and, in addition, on or prior to such date (A) any
person (other than the Parent or the Purchaser) shall have made a
public proposal, filing, announcement or communication to the Company
with respect to a Significant Acquisition Transaction (as defined
below) or (B) any person (including the Company or any of its
affiliates or subsidiaries) other than the Parent or any of its
affiliates shall have become the beneficial owner of 25% or more of the
Shares.
"Significant Acquisition Transaction" has the same meaning as "Acquisition
Transaction" except that the references to 15% contained therein shall be deemed
to be (i) 35% with respect to any Significant
21
<PAGE> 24
Acquisition Transaction effected through a primary sale of Shares (or a security
convertible into Shares) by the Company or a merger involving the Company or a
tender or exchange offer or any other transaction that the Board of Directors
has recommended acceptance of, and (ii) 50% with respect to any Significant
Acquisition Transaction effected through a tender or exchange offer that the
Board of Directors has recommended rejection of or other market or secondary
acquisition of Shares (or a security convertible into Shares).
Termination Fees and Expenses. The Merger Agreement provides that (i) if
the Merger Agreement is terminated by the Company as described under paragraph
(d)(v) under "Termination Events", or by the Parent as described under paragraph
(e)(iii) or (iv) under "Termination Events"; or (ii) (A) if the Merger Agreement
is terminated by the Parent as described under paragraph (e)(i), (e)(ii) or
(e)(v) under "Termination Events," (B) following the date of the Merger
Agreement and at or prior to the time of the event giving rise to such
termination there shall have existed a Takeover Proposal for a Significant
Acquisition Transaction with respect to the Company and (C) within twelve months
thereafter, either (1) the Company enters into an agreement with respect to any
Significant Acquisition Transaction or (2) any Significant Acquisition
Transaction occurs, then the Company shall pay to Parent a cash fee of $5.5
million (the "Fee");
If the Merger Agreement is terminated as described under paragraph
8.01(d)(v) or 8.01(e) under "Termination Events", then the Company shall pay to
the Purchaser an amount equal to the reasonable and documented Expenses of the
Parent and the Purchaser of up to $1 million (the "Expenses Cap"); provided,
however, that the Expenses Cap shall not apply to the Collection Expenses. Such
Expenses shall be in addition to, and not in substitution for, the Fee paid by
the Company, if any.
"Expenses" means all out-of-pocket fees and expenses actually incurred by
the Parent or the Purchaser or on their behalf, whether before or after the
execution and delivery of the Merger Agreement, in connection with the
transactions contemplated by the Merger Agreement, including the Merger and the
Shareholders Agreement, including without limitation, fees and reasonable
expenses payable to all banks, investment banking firms and other financial
institutions, and their respective agents and counsel, all fees and reasonable
expenses of counsel, accountants, experts and consultants to the Parent or the
Purchaser, and, further, including without limitation fees and reasonable
expenses of, or incurred in connection with, any litigation or other proceedings
to collect the Fee or the Expenses (the "Collection Expenses").
Shareholders Agreement. Concurrently with the execution and delivery of
the Merger Agreement, the Parent, the Purchaser and the Principal Holders
entered into a Shareholders Agreement (the "Shareholders Agreement").
Pursuant to the Shareholders Agreement, each Stockholder agrees to validly
tender (or cause the record owner of such shares to validly tender), pursuant to
and in accordance with the terms of the Offer, as soon as practicable after
commencement of the Offer but in no event later than 15 business days after the
date of commencement of the Offer, all of such Stockholder's Shares by physical
delivery of the certificates therefor and to not withdraw such Shares.
The Shareholders Agreement also provides that the Stockholders will (i)
grant an irrevocable proxy to the Purchaser to vote their Shares during the term
of the Shareholders Agreement in favor of the Merger, the execution and delivery
by the Company of the Merger Agreement and against any action or agreement that
would result in a breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement or the
Shareholders Agreement, (ii) not directly or indirectly solicit, facilitate,
participate in or initiate any inquiries or the making of any proposal by any
person or entity (other than the Purchaser or any of its affiliates) which
constitutes or may reasonably be expected to lead to any sale of the Shares or
any Takeover Proposal or Acquisition Transaction, or (iii) not sell, transfer,
pledge, encumber, assign or otherwise dispose of their Shares or stock options
during the term of the Shareholders Agreement.
12. PURPOSE OF THE OFFER; THE MERGER; PLANS FOR THE COMPANY. The purpose
of the Offer is to acquire control of, and the entire equity interest in, the
Company. The Offer is being made pursuant to the Merger Agreement. As promptly
as practicable following consummation of the Offer and after satisfaction or
waiver of
22
<PAGE> 25
all conditions to the Merger set forth in the Merger Agreement, the Purchaser
intends to acquire the remaining equity interest in the Company not acquired in
the Offer by consummating the Merger.
Vote Required to Approve the Merger; Stockholder Approval. The Board of
Directors of the Company has approved and adopted the Merger and the Merger
Agreement in accordance with the DGCL. The Board will be required to submit the
Merger Agreement to the Company's stockholders for approval at a stockholders'
meeting convened for that purpose in accordance with the DGCL, except as
otherwise required as described in the next paragraph. If stockholder approval
is required, the Merger Agreement must be approved by the vote of the holders of
a majority of the outstanding Shares. As a result, if the Minimum Condition is
satisfied, the Purchaser will have the power, which it intends to exercise, to
approve the Merger Agreement without the affirmative vote of any other
stockholder.
The Merger Agreement provides that, notwithstanding the foregoing, in the
event that the Parent, the Purchaser or any other subsidiary of the Parent shall
acquire at least 90% of the outstanding Shares pursuant to the Offer, the
parties thereto agree to take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable after the consummation of the
Offer, without a meeting of stockholders of the Company, in accordance with
Section 253 of the DGCL.
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 THE PURCHASER MAY MAKE WILL BE MADE ONLY PURSUANT TO
SEPARATE PROXY MATERIALS IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION 14(A) OF
THE EXCHANGE ACT.
THE OFFER IS CONDITIONED UPON THE MINIMUM CONDITION BEING SATISFIED.
Appraisal Rights. Stockholders do not have appraisal rights as a result of
the Offer. However, if the Merger is consummated, stockholders of the Company at
the time of the Merger who do not vote in favor of the Merger will have the
right under the DGCL to dissent and demand appraisal of, and receive payment in
cash of the fair value of, their Shares outstanding immediately prior to the
effective date of the Merger in accordance with Section 262 of the DGCL.
Under the DGCL, dissenting stockholders who comply with the applicable
statutory procedures will be entitled to receive a judicial determination of the
fair value of their Shares (exclusive of any element of value arising from the
accomplishment or expectation of such merger or similar business combination)
and to receive payment of such fair value in cash. Any such judicial
determination of the fair value of such Shares could be based upon
considerations other than or in addition to the price paid in the Offer and the
Merger and the market value of the Shares. In Weinberger v. UOP, Inc., the
Delaware Supreme Court stated, among other things, that "proof of value by any
techniques or methods which are generally considered acceptable in the financial
community and otherwise admissible in court" should be considered in an
appraisal proceeding. Stockholders should recognize that the value so determined
could be higher or lower than the price per Share paid pursuant to the Offer or
the consideration per Share to be paid in the Merger or other similar business
combination.
In addition, several decisions by Delaware courts have held that in certain
circumstances a controlling stockholder of a corporation involved in a merger
has a fiduciary duty to other stockholders that requires that the merger be fair
to other stockholders. In determining whether a merger is fair to minority
stockholders, Delaware courts have considered, among other things, the type and
amount of the consideration to be received by the stockholders and whether there
was fair dealing among the parties. The Delaware Supreme Court stated in
Weinberger and Rabkin v. Philip A. Hunt Chemical Corp. that the remedy
ordinarily available to minority stockholders in a cash-out merger is the right
to appraisal described above. However, a damages remedy or injunctive relief may
be available if a merger is found to be the product of procedural unfairness,
including fraud, misrepresentation or other misconduct.
THE FOREGOING SUMMARY OF THE RIGHTS OF OBJECTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE APPRAISAL RIGHTS. THE
PRESERVATION AND EXERCISE OF APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE TO THE
APPLICABLE PROVISIONS OF THE DELAWARE LAW.
23
<PAGE> 26
The foregoing description of the DGCL is not necessarily complete and is
qualified in its entirely by reference to the DGCL.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger following the purchase of
Shares pursuant to the Offer in which the Purchaser seeks to acquire any
remaining Shares. Rule 13e-3 should not be applicable to the Merger if the
Merger is consummated within one year after the expiration or termination of the
Offer and the price paid in the Merger is not less than the per Share price paid
pursuant to the Offer. However, in the event that the Purchaser is deemed to
have acquired control of the Company pursuant to the Offer and if the Merger is
consummated more than one year after completion of the Offer or an alternative
acquisition transaction is effected whereby stockholders of the Company receive
consideration less than that paid pursuant to the Offer, in either case at a
time when the Shares are still registered under the Exchange Act, the Purchaser
may be required to comply with Rule 13e-3 under the Exchange Act. If applicable,
Rule 13e-3 would require, among other things, that certain financial information
concerning the Company and certain information relating to the fairness of the
Merger or such alternative transaction and the consideration offered to minority
stockholders in the Merger or such alternative transaction, be filed with the
Commission and disclosed to stockholders prior to consummation of the Merger or
such alternative transaction. The purchase of a substantial number of Shares
pursuant to the Offer may result in the Company being able to terminate its
Exchange Act registration. See Section 14. If such registration were terminated,
Rule 13e-3 would be inapplicable to any such future Merger or such alternative
transaction.
Plans for the Company. The Parent does not have any current plans to
dispose of any businesses or other assets of the Company or to effect any
changes in its operations.
Except as described in this Offer to Purchase, none of the Purchaser, the
Parent, JWCP or, to the best knowledge of the Purchaser, the Parent, JWCP or any
of the persons listed on Schedule I have any present plans or proposals that
would relate to or result in an extraordinary corporate transaction such as a
merger, reorganization or liquidation involving the Company or any of its
subsidiaries or a sale or other transfer of a material amount of assets of the
Company or any of its subsidiaries, any material change in the capitalization or
dividend policy of the Company or any other material change in the Company's
corporate structure or business or the composition of its Board of Directors or
management.
13. DIVIDENDS AND DISTRIBUTIONS. If the Company should, on or after the
date of the Merger Agreement, split, combine or otherwise change the Shares or
its capitalization, or disclose that it has taken any such action, then without
prejudice to the Purchaser's rights under Section 15, the Purchaser may make
such adjustments to the purchase price and other terms of the Offer as it deems
appropriate to reflect such split, combination or other change.
If on or after the date of the Merger Agreement, the Company should declare
or pay any cash or stock dividend or other distribution on, or issue any rights
with respect to, the Shares that is payable or distributable to stockholders of
record on a date prior to the transfer to the name of the Purchaser or the
nominee or transferee of the Purchaser on the Company's stock transfer records
of such Shares that are purchased pursuant to the Offer, then without prejudice
to the Purchaser's rights under Section 15, (i) the purchase price payable per
Share by the Purchaser pursuant to the Offer will be reduced to the extent any
such dividend or distribution is payable in cash and (ii) any non-cash dividend,
distribution (including additional Shares) or right received and held by a
tendering stockholder shall be required to be promptly remitted and transferred
by the tendering stockholder to the Depositary for the account of the Purchaser,
accompanied by appropriate documentation of transfer. Pending such remittance or
appropriate assurance thereof, the Purchaser will, subject to applicable law, be
entitled to all rights and privileges as owner of any such non-cash dividend,
distribution or right and may withhold the entire purchase price or deduct from
the purchase price the amount or value thereof, as determined by the Purchaser
in its sole discretion.
14. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, NASDAQ LISTING AND
EXCHANGE ACT REGISTRATION. The purchase of Shares pursuant to the Offer will
reduce the number of Shares that might otherwise trade publicly and could reduce
the number of holders of Shares, which could adversely affect the liquidity and
24
<PAGE> 27
market value of the remaining Shares. Following completion of the Offer, at
least a majority of the outstanding Shares will be owned by the Purchaser.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the National Association of
Securities Dealers, Inc. (the "NASD") for continued inclusion in Nasdaq, which
require that an issuer have at least 200,000 publicly held shares, held by at
least 400 stockholders or 300 stockholders of round lots, with a market value of
at least $1,000,000 and have net tangible assets of at least $1,000,000,
$2,000,000 or $4,000,000, depending on profitability levels during the issuer's
four most recent fiscal years. If these standards are not met, the Shares might
nevertheless continue to be included in the NASD's Nasdaq Stock Market (the
"Nasdaq Stock Market") with quotations published in Nasdaq "additional list" or
in one of the "local lists," but if the number of holders of the Shares were to
fall below 300, or if the number of publicly held Shares were to fall below
100,000 or there were not at least two registered and active market makers for
the Shares, the NASD's rules provide that the Shares would no longer be
"qualified" for Nasdaq Stock Market reporting and Nasdaq Stock Market would
cease to provide any quotations. Shares held directly or indirectly by
directors, officers or beneficial owners of more than 10% of the Shares are not
considered as being publicly held for this purpose. As of February 19, 1999,
there were approximately 83 holders of record and there were 12,110,049 Shares
outstanding. If as a result of the purchase of Shares pursuant to the Offer or
otherwise, the Shares no longer meet the requirements of the NASD for continued
inclusion in Nasdaq or in any other tier of Nasdaq Stock Market and the Shares
are no longer included in Nasdaq or in any other tier of Nasdaq Stock Market, as
the case may be, the market for the Shares could be adversely affected.
If Nasdaq were to delist the Shares, it is possible that the Shares would
continue to trade on another securities exchange or in the over-the-counter
market and that price or other quotations would be reported by such exchanges or
through other sources. The extent of the public market therefor and the
availability of such quotations would depend, however, upon such factors as the
number of stockholders and/or the aggregate market value of such securities
remaining at such time, the interest in maintaining a market in the Shares on
the part of securities firms, the possible termination of registration under the
Exchange Act as described below and other factors. The Purchaser cannot predict
whether the reduction in the number of Shares that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for or
marketability of the Shares or whether it would cause future market prices to be
greater or less than the Offer price.
The Shares are currently registered under the Exchange Act. The purchase of
Shares pursuant to the Offer may result in the Shares becoming eligible for
deregistration under the Exchange Act. Registration of the Shares may be
terminated upon application of the Company to the Commission if the Shares are
not listed on a national securities exchange and there are fewer than 300 record
holders. The termination of the registration of the Shares under the Exchange
Act would substantially reduce the information required to be furnished by the
Company to holders of the Shares and would make certain provisions of the
Exchange Act, such as the short-swing profit recovery provisions of Section
16(b), the requirement of furnishing a proxy statement in connection with
stockholders' meetings and the requirements of Rule 13e-3 under the Exchange Act
with respect to "going private" transactions, no longer applicable to the
Shares. Furthermore, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of the
securities pursuant to Rule 144 under the Securities Act of 1933, as amended.
If registration of the Shares under the Exchange Act were terminated, the
Shares would no longer be eligible for Nasdaq reporting. If the Shares are
eligible for deregistration under the Exchange Act following the Offer, the
Parent expects to seek to deregister the Shares under the Exchange Act.
The Shares are currently "margin securities" under the rules of the Board
of Governors of the Federal Reserve System (the "Federal Reserve Board"), which
has the effect, among other things, of allowing brokers to extend credit on the
collateral of such Shares for the purpose of buying, carrying, or trading in
securities ("purpose loans"). Depending upon factors similar to those described
above with respect to listing and market quotations, it is possible that,
following the Offer, the Shares might no longer constitute "margin securities"
for the purposes of the Federal Reserve Board's margin regulations and therefore
could no longer be used as collateral for purpose loans made by brokers.
25
<PAGE> 28
15. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision
of the Offer, the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations of the Commission, including
Rule 14-e-1(c) under the Exchange Act (relating to the Purchaser's obligation to
pay for or return tendered Shares promptly after termination or withdrawal of
the Offer), pay for any Shares tendered pursuant to the Offer, and may postpone
the acceptance for payment or, subject to the restriction referred to above,
payment for any Shares tendered pursuant to the Offer, and may amend or
terminate the Offer (whether or not any shares have theretofore been purchased
or paid for) to the extent permitted by the Merger Agreement if, (i) at the
expiration of the Offer, a number of Shares which constitutes more than 50% of
the voting power (determined on a fully-diluted basis), on the date of purchase,
of all the securities of the Company entitled to vote generally in the election
of directors or in a merger shall not have been validly tendered and not
properly withdrawn prior to the Expiration Date (the "Minimum Condition"), or
(ii) at any time on or after the date of the Merger Agreement and prior to the
acceptance for payment of Shares, any of the following conditions occurs or has
occurred:
(a) there shall have been instituted or pending any action or proceeding
brought by any governmental authority before any federal or state
court, or any order or preliminary or permanent injunction entered and
continuing in any action or proceeding before any federal or state
court or governmental, administrative or regulatory authority or
agency, or any statute, rule, regulation, legislation, interpretation,
judgment or order enacted, entered, enforced, promulgated, amended,
issued and continuing and applicable to the Parent, the Purchaser, the
Company or any subsidiary or affiliate of the Purchaser or the Company
or the Offer or the Merger, by any legislative body, court, government
or governmental, administrative or regulatory authority or agency which
would reasonably be expected to have the effect of: (i) making illegal,
or otherwise directly or indirectly restraining or prohibiting or
making materially more expensive the making of the Offer, the
acceptance for payment of, or payment for, the Shares by the Parent or
the Purchaser or the consummation of any of the transactions
contemplated by the Merger Agreement; (ii) prohibiting or materially
limiting the ownership or operation by the Company or any of its
subsidiaries or the Parent, the Purchaser or any of the Parent's
affiliates of all or any material portion of the business or assets of
the Company or any of its subsidiaries, taken as a whole, or any of its
affiliates or compelling the Parent, the Purchaser or any of the
Parent's affiliates to dispose of or hold separate all or any material
portion of the business or assets of the Company or any of its
subsidiaries or the Parent, or any of its affiliates, as a result of
the transactions contemplated by the Offer or the Merger Agreement; or
(iii) imposing or confirming material limitations on the ability of the
Parent, the Purchaser or any of the Parent's affiliates effectively to
acquire or hold or to exercise full rights of ownership of Shares,
including without limitation the right to vote any Shares acquired or
owned by the Parent or the Purchaser or any of its affiliates on all
matters properly presented to the stockholders of the Company,
including without limitation the adoption and approval of the Merger
Agreement and the Merger or the right to vote any shares of capital
stock of any subsidiary directly or indirectly owned by the Company; or
(iv) requiring material divestiture by the Parent or the Purchaser of
any Shares;
(b) there shall have occurred and be continuing (i) any general suspension
of trading in, or limitation on prices for, securities on any national
securities exchange or in the over-the-counter market in the United
States, (ii) a material adverse change in or material disruption of
conditions in the market for syndicated bank credit facilities or the
financial, banking, or capital markets generally, (iii) a commencement
and continuation of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United
States which would have a Material Adverse Effect on the Company or
(iv) in the case of any of the foregoing existing at the time of
commencement of the Offer, a material acceleration or worsening
thereof;
(c) (i) it shall have been publicly disclosed or the Purchaser shall have
otherwise learned that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under
the Exchange Act) of more than 25% of the outstanding Shares has been
acquired by any corporation (including the Company or any of its
subsidiaries or affiliates), partnership, person or other entity or
group (as defined in Section 13(d)(3) of the Exchange Act), other than
the Parent
26
<PAGE> 29
or its affiliates, or the Principal Holders or any of their respective
affiliates (but only with respect to the Shares that they beneficially
own on the date of the Merger Agreement), or (ii) (A) the Board of
Directors of the Company or any committee thereof shall have withdrawn
or modified in a manner adverse to the Parent or the Purchaser the
approval or recommendation of the Offer, the Merger or the Merger
Agreement, or approved or recommended any Takeover Proposal or any
other acquisition of Shares other than the Offer and the Merger, (B)
any such corporation, partnership, person or other entity or group
shall have entered into a definitive agreement or an agreement in
principle with the Company with respect to an Acquisition Transaction,
or (C) the Board of Directors of the Company or any committee thereof
shall have resolved to do any of the foregoing;
(d) any of the representations and warranties of the Company set forth in
the Merger Agreement that are qualified as to materiality or Material
Adverse Effect shall not be true and correct, or any such
representations and warranties that are not so qualified shall not be
true and correct in any material respect, in each case as if such
representations and warranties were made at the time of such
determination;
(e) the Company shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under
the Merger Agreement;
(f) the Merger Agreement shall have been terminated in accordance with its
terms or the Offer shall have been terminated with the consent of the
Company; or
(g) any waiting periods under the HSR Act applicable to the purchase of
Shares pursuant to the Offer shall not have expired or been terminated,
or any material approval, permit, authorization or consent of any
domestic or foreign governmental, administrative or regulatory agency
(federal, state, local, provincial or otherwise) shall not have been
obtained on terms satisfactory to the Parent in its reasonable
discretion;
and, in addition, which, in the case of (a) through (g), in the reasonable, good
faith judgment of the Parent or the Purchaser, and regardless of the
circumstances (including any action or inaction by the Parent or the Purchaser
or any of their affiliates) giving rise to any such conditions, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment of
or payment for Shares or to proceed with the Merger.
The foregoing conditions are for the sole benefit of the Parent and the
Purchaser and may be asserted by the Parent or the Purchaser regardless of the
circumstances giving rise to any such conditions and may be waived by the 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 terms of the Merger
Agreement. The failure by the Parent or the Purchaser at any time to exercise
any of the foregoing rights shall not be deemed a waiver of such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time.
16. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS. Except as set forth
below, based upon its examination of publicly available filings by the Company
with the Commission and other publicly available information concerning the
Company, neither the Purchaser nor the Parent is aware of any licenses or other
regulatory permits that appear to be material to the business of the Company and
its subsidiaries, taken as a whole, that might be adversely affected by the
Purchaser's acquisition of Shares (and the indirect acquisition of the stock of
the Company's subsidiaries) as contemplated herein, or of any filings, approvals
or other actions by or with any domestic (federal or state), foreign or
supranational governmental authority or administrative or regulatory agency that
would be required prior to the acquisition of Shares (or the indirect
acquisition of the stock of the Company's subsidiaries) by the Purchaser
pursuant to the Offer as contemplated herein. Should any such approval or other
action be required, it is the Purchaser's present intention to seek such
approval or action. However, the Purchaser does not presently intend to delay
the purchase of Shares tendered pursuant to the Offer pending the receipt of any
such approval or the taking of any such action (subject to the Purchaser's right
to delay or decline to purchase Shares if any of the conditions in Section 15
shall have occurred). There can be no assurance that any such approval or other
action, if needed, would be obtained without substantial conditions or that
adverse consequences might not result to the business of the Company, the Parent
or the
27
<PAGE> 30
Purchaser or that certain parts of the businesses of the Company, the Parent or
the Purchaser might not have to be disposed of or held separate or other
substantial conditions complied with in order to obtain such approval or other
action or in the event that such approval was not obtained or such other action
was not taken, any of which could cause the Purchaser to elect to terminate the
Offer without the purchase of the Shares thereunder. The Purchaser's obligation
under the Offer to accept for payment and pay for Shares is subject to certain
conditions, including conditions relating to the legal matters discussed in this
Section 15.
State Takeover Laws. A number of states have adopted takeover laws and
regulations which purport to varying degrees to be applicable to attempts to
acquire securities of corporations which are incorporated in such states or
which have or whose business operations have substantial economic effects in
such states, or which have substantial assets, security holders, principal
executive offices or principal places of business therein. To the extent that
certain provisions of certain of these state takeover statutes purport to apply
to the Offer, the Purchaser believes that such laws conflict with federal law
and constitute an unconstitutional burden on interstate commerce. In 1982, the
Supreme Court of the United States, in Edgar v. Mite Corp., invalidated on
constitutional grounds the Illinois Business Takeovers Act, which as a matter of
state securities law made takeovers of corporations meeting certain requirements
more difficult, and the reasoning in such decision is likely to apply to certain
other state takeover statutes. However, in 1987, in CTS Corp. v. Dynamics Corp.
of America, the Supreme Court of the United States held that the State of
Indiana could, as a matter of corporate law and in particular those aspects of
corporate law concerning corporate governance, constitutionally disqualify a
potential acquiror from voting on the affairs of a target corporation without
the prior approval of the remaining stockholders, provided that such laws were
applicable only under certain conditions. Subsequently, in TLX Acquisition Corp.
v. Telex Corp., a federal district court in Oklahoma ruled that the Oklahoma
statutes were unconstitutional insofar as they applied to corporations
incorporated outside Oklahoma in that they would subject such corporations to
inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a
federal district court in Tennessee ruled that four Tennessee takeover statutes
were unconstitutional as applied to corporations incorporated outside Tennessee.
This decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a federal district court in Florida held in Grand
Metropolitan PLC v. Butterworth that the provisions of the Florida Affiliated
Transactions Act and the Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.
Except as described herein, the Purchaser has not attempted to comply with
any state takeover statutes in connection with the Offer. The Purchaser reserves
the right to challenge the validity or applicability of any state law allegedly
applicable to the Offer and nothing in this Offer to Purchase nor any action
taken in connection herewith is intended as a waiver of that right. In the event
that any state takeover statute is found applicable to the Offer, the Purchaser
might be unable to accept for payment or purchase Shares tendered pursuant to
the Offer or be delayed in continuing or consummating the Offer. In such case,
the Purchaser may not be obligated to accept for purchase or pay for, any Shares
tendered. See Section 15.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The acquisition
of Shares pursuant to the Offer is subject to such requirements. See Section 2.
The Parent intends to file by February 26, 1999 with the FTC and the
Antitrust Division a Premerger Notification and Report Form in connection with
the purchase of Shares pursuant to the Offer. Under the provisions of the HSR
Act applicable to the Offer, the purchase of Shares pursuant to the Offer may
not be consummated until the expiration of a 15-calendar day waiting period
following the filing by the Parent. The waiting period under the HSR Act
applicable to such purchases of Shares pursuant to the Offer will expire at
11:59 p.m., New York City time, on such fifteenth day, unless such waiting
period is extended by a request from the FTC or the Antitrust Division for
additional information or documentary material prior to the expiration of the
waiting period. If either the FTC or the Antitrust Division were to request
additional information or documentary material from the Parent, the waiting
period would expire at 11:59 p.m., New York City time, on the tenth calendar day
after the date of substantial compliance by the Parent with such request.
Thereafter, the waiting period could be extended only by court order. If the
acquisition of Shares is
28
<PAGE> 31
delayed pursuant to a request by the FTC or the Antitrust Division for
additional information or documentary material pursuant to the HSR Act, the
Offer may, but need not, be extended and in any event the purchase of and
payment for Shares will be deferred until ten days after the request is
substantially complied with, unless the waiting period is sooner terminated by
the FTC and the Antitrust Division. See Section 2. Only one extension of such
waiting period pursuant to a request for additional information is authorized by
the HSR Act and the rules promulgated thereunder, except by court order or
agreement of the parties. Any such extension of the waiting period will not give
rise to any withdrawal rights not otherwise provided for by applicable law. See
Section 4.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
the Purchaser pursuant to the Offer. At any time before or after the purchase by
the Purchaser of Shares pursuant to the Offer, either of the FTC and the
Antitrust Division could take such action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
purchase of Shares pursuant to the Offer or seeking the divestiture of Shares
purchased by the Purchaser or the divestiture of substantial assets of the
Parent, its subsidiaries or the Company. Private parties and state attorneys
general may also bring legal action under federal or state antitrust laws under
certain circumstances.
Although the Purchaser believes that the acquisition of Shares pursuant to
the Offer would not violate the antitrust laws, there can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if such
challenge is made, what the outcome will be. See Section 15 for certain
conditions to the Offer, including conditions with respect to litigation and
certain government actions.
Margin Credit Regulations. Federal Reserve Board Regulations G, T, U and X
(the "Margin Credit Regulations") restrict the extension or maintenance of
credit for the purpose of buying or carrying margin stock, including the Shares,
if the credit is secured directly or indirectly thereby. Such secured credit may
not be extended or maintained in an amount that exceeds the maximum loan value
of the margin stock. Under the Margin Credit Regulations, the Shares are
presently margin stock and the maximum loan value thereof is generally 50% of
their current market value. The definition of "indirectly secured" contained in
the Margin Credit Regulations provides that the term does not include an
arrangement with a customer if the lender in good faith has not relied upon
margin stock as collateral in extending or maintaining the particular credit.
17. FEES AND EXPENSES. Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ") and NationsBanc Montgomery Securities LLC ("NMS") are acting
as Dealer Managers in connection with the Offer and will be reimbursed by the
Parent and the Purchaser for their reasonable out-of-pocket expenses, including
reasonable attorneys' fees. The Parent, the Purchaser and JWCP have also agreed
to indemnify DLJ and NMS against certain liabilities and expenses in connection
with the Offer, including certain liabilities under the federal securities laws.
DLJ has provided in the past other investment banking and financial
advisory services to the Company. DLJ and NMS (or their respective affiliates)
are acting as dealer managers for the Debt Offer, as co-arrangers under the New
Credit Facility and as joint-book running managers for the possible offering of
the New Notes.
The Purchaser has retained MacKenzie Partners, Inc. to act as the
Information Agent and Continental Stock Transfer & Trust Company of New York to
act as the Depositary in connection with the Offer. The Information Agent may
contact holders of Shares by mail, telephone, telex, telegraph and personal
interview and may request brokers, dealers and other nominee stockholders to
forward the Offer materials to beneficial owners. The Information Agent and the
Depositary will receive reasonable and customary compensation for services
relating to the Offer and will be reimbursed for certain out-of-pocket expenses.
The Purchaser and the Parent have also agreed to indemnify the Information Agent
and the Depositary against certain liabilities and expenses in connection with
the Offer, including certain liabilities under the federal securities laws.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person for soliciting tenders of Shares pursuant to the Offer
(other than to the Dealer Managers, the Information Agent and the Depositary).
Brokers, dealers, commercial banks and trust companies will, upon request, be
29
<PAGE> 32
reimbursed by the Purchaser for customary mailing and handling expenses incurred
by them in forwarding offering materials to their customers.
18. MISCELLANEOUS. The Offer is being made solely by this Offer to
Purchase and the related Letter of Transmittal and is being made to all holders
of Shares. The Purchaser is not aware of any state where the making of the Offer
is prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with any such state statute.
If after such good faith effort, the Purchaser cannot comply with such state
statute, the Offer will not be made to nor will tenders be accepted from or on
behalf of the holders of Shares in such state. In any jurisdiction where the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of the
Purchaser by the Dealer Manager, or one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
The Purchaser and the Parent have filed with the Commission a Schedule
14D-1 (including exhibits) pursuant to Rule 14d-3 under the Exchange Act,
furnishing certain additional information with respect to the Offer. Such
statement and any amendments thereto, including exhibits, may be inspected and
copies may be obtained from the offices of the Commission (except that they will
not be available at the regional offices of the Commission) in the manner set
forth in Section 7 of this Offer to Purchase.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR THE PARENT NOT CONTAINED HEREIN OR
IN THE LETTER OF TRANSMITTAL AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
RSA ACQUISITION CORP.
February 22, 1999
30
<PAGE> 33
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF THE PURCHASER, THE PARENT AND J.W. CHILDS
1. Directors and Executive Officers of the Purchaser and Parent. The name,
present principal occupation or employment and five-year employment history of
each director and executive officer of the Parent and the Purchaser are set
forth below. All persons listed below are citizens of the United States. The
business address of each of the Parent and the Purchaser is c/o J.W. Childs
Equity Partners II, L.P., One Federal Street, 21st Floor, Boston, MA 02110.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
AND MATERIAL OCCUPATIONS, POSITIONS, OFFICES
NAME OR EMPLOYMENT HELD DURING THE LAST FIVE YEARS
- ---- ---------------------------------------------
<S> <C>
Adam L. Suttin......................... Sole Director and President of both the Parent and the
Purchaser. Managing Director of J.W. Childs Associates,
L.P. since December 1997. Vice President of J.W. Childs
Associates, L.P. from July 1995 to December 1997. Mr.
Suttin was an executive at the Thomas H. Lee Company from
August 1989 to 1995, most recently holding the position of
Associate.
B. Lane MacDonald...................... Vice President and Secretary of both the Parent and the
Purchaser. Associate at J.W. Childs Associates, L.P. since
1998. Assistant Vice President at BancBoston Capital from
1995 to 1998. Financial Analyst at Robertson, Stephens and
Co. from 1992 to 1993.
Allan A. Dowds......................... Vice President and Treasurer of both the Parent and the
Purchaser. Chief Financial Officer of J.W. Childs
Associates, L.P. since 1995. Manager of Accounting and
Reporting at Snapple Beverage Corporation from 1993 to
1995.
</TABLE>
2. Directors and Executive Officers of J.W. Childs. The name, present
principal occupation or employment and five-year employment history of directors
and officers of J.W. Childs are set forth below. All persons listed below are
citizens of the United States. The business address of all persons set forth
below is c/o J.W. Childs Equity Partners II, L.P., One Federal Street, 21st
Floor, Boston, MA 02110.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
AND MATERIAL OCCUPATIONS, POSITIONS, OFFICES
NAME OR EMPLOYMENT HELD DURING THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
John W. Childs......................... Sole Director, President and Treasurer of JWC Inc. since
July 1995. Prior to that time, he was an executive at the
Thomas H. Lee Company from May 1987, most recently holding
the position of Senior Managing Director.
Steven G. Segal........................ Senior Managing Director of J.W. Childs Associates, L.P.
since December 1997. Managing Director of J.W. Childs
Associates, L.P., from July 1995 to December 1997.
Managing Director at the Thomas H. Lee Company, 1994-1995.
Associate at the Thomas H. Lee Company from 1987 to 1994.
Adam L. Suttin......................... Sole Director and President of both the Parent and the
Purchaser. Managing Director of J.W. Childs Associates,
L.P. since December 1997. Vice President of J.W. Childs
Associates, L.P. from July 1995 to December 1997. Mr.
Suttin was an executive at the Thomas H. Lee Company from
August 1989 to 1995, most recently holding the position of
Associate.
</TABLE>
I-1
<PAGE> 34
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
AND MATERIAL OCCUPATIONS, POSITIONS, OFFICES
NAME OR EMPLOYMENT HELD DURING THE LAST FIVE YEARS
---- ---------------------------------------------
<S> <C>
Glenn A. Hopkins....................... Managing Director, J.W. Childs Associates, L.P., since
December 1997. Vice President, J.W. Childs Associates,
L.P., from September 1995 to December 1997. Financial
Analyst and Associate at the Thomas H. Lee Company from
1989 to 1995.
Edward Yun............................. Vice President, J.W. Childs Associates, L.P., since
December 1997. Associate, J.W. Childs Associates, L.P.
from August 1996 to December 1997. Associate at DLJ
Merchant Banking Partners from 1994 to 1996.
Dana L. Schmaltz....................... Vice President, J.W. Childs Associates, L.P. since
December 1997. Associate, J.W. Childs Associates, L.P.,
from February 1997 through December 1997. Associate at DLJ
Merchant Banking Partners, 1995 to 1997. Associate, NTC
Group, 1991 to 1993.
</TABLE>
I-2
<PAGE> 35
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary as follows:
The Depositary for the Offer is:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
Reorganization Department (for Eligible Institutions Reorganization Department
Two Broadway only) Two Broadway
19th Floor (212) 509-5150 19th Floor
New York, NY 10004 New York, NY 10004
For Information by Telephone:
(212)509-4000 Ext. 535
</TABLE>
Any questions and requests for assistance may be directed to the
Information Agent or the Dealer Managers at their respective telephone numbers
and addresses listed below. Additional copies of this Offer to Purchase, the
Letter of Transmittal and the Notice of Guaranteed Delivery may also be obtained
from the Information Agent. You may also contact your broker, dealer, commercial
bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
[MACKENZIE LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
(800) 322-2885 (Call Toll-Free)
The Dealer Managers for the Offer are:
<TABLE>
<CAPTION>
NATIONSBANC MONTGOMERY
DONALDSON, LUFKIN & JENRETTE SECURITIES LLC
<S> <C>
277 Park Avenue Equity Capital Markets
New York, New York 10172 600 Montgomery Street
(877) 893-0567 (Toll-Free) San Francisco, California 94111
(212) 892-8117 (800) 227-4786 Ext. 2044 (Toll-Free)
</TABLE>
<PAGE> 1
EXHIBIT 11(A)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
AMERICAN SAFETY RAZOR COMPANY
PURSUANT TO THE OFFER TO PURCHASE DATED FEBRUARY 22, 1999
BY
RSA ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
RSA HOLDINGS CORP. OF DELAWARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
CONTINENTAL STOCK TRANSFER & TRUST CO.
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
Reorganization Department (for Eligible Institutions Reorganization Department
Two Broadway only) Two Broadway
19th Floor (212) 509-5150 19th Floor
New York, NY 10004 Confirm by Telephone: New York, NY 10004
(212) 509-4000 x535
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA FACSIMILE NUMBER OTHER THAN AS
SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders, either if
certificates for Shares (as defined below) are to be forwarded herewith or,
unless an Agent's Message (as defined in the Offer to Purchase) is utilized, if
tenders of Shares are to be made by book-entry transfer into the account of
Continental Stock Transfer & Trust Co., as Depositary (the "Depositary"), at The
Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility") pursuant
to the procedures set forth in Section 3 of the Offer to Purchase (as defined
below). Stockholders who tender Shares by book-entry transfer are referred to
herein as "Book-Entry Stockholders".
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available or who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase), or who
cannot complete the procedure for book-entry transfer on a timely basis, must
tender their Shares according to the guaranteed delivery procedure set forth in
Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO
THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE> 2
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------------
NAME(S) & ADDRESS(ES) OF REGISTERED HOLDER(S)
PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
APPEAR(S) ON CERTIFICATE(S) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER OF
SHARE CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
TOTAL SHARES
</TABLE>
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, all Shares represented by certificates delivered to the Depositary will be deemed to have
been tendered. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 3
[ ] CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
- --------------------------------------------------------------------------------
Check box of Book-Entry Transfer Facility:
[ ] The Depository Trust Company
Account Number
- ------------------------------- Transaction Code Number
- -------------------------------
[ ] CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s):
- ----------------------------------------------------------------------------
Window Ticket Number (if any):
- -----------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
- ---------------------------------------------------------
Name of Institution that Guaranteed Delivery:
- ---------------------------------------------------------------
If delivered by Book-Entry Transfer, check box of Book-Entry Transfer Facility:
[ ] The Depository Trust Company
Account Number
- ------------------------------- Transaction Code Number
- --------------------------------
4
<PAGE> 4
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to RSA Acquisition Corp., a Delaware
corporation (the "Purchaser"), a wholly owned subsidiary of RSA Holdings Corp.
of Delaware, a Delaware corporation ("Parent"), the above-described shares of
Common Stock, $0.01 par value per share (the "Shares"), of American Safety Razor
Company, a Delaware corporation (the "Company"), at a purchase price of $14.125
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 February
22, 1999 (the "Offer to Purchase") and in this Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer"). The undersigned
understands that the Purchaser reserves the right to transfer or assign, in
whole or from time to time in part, to one or more of its affiliates, the right
to purchase all or any portion of the Shares tendered pursuant to the Offer,
receipt of which is hereby acknowledged.
Subject to, and effective upon, acceptance for payment for the Shares
tendered herewith in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Purchaser all
right, title and interest in and to all of the Shares that are being tendered
hereby and any and all non-cash dividends, distributions (including additional
Shares) or rights declared, paid or issued with respect to the tendered Shares
on or after February 12, 1999, and payable or distributable to the undersigned
on a date prior to the transfer to the name of the Purchaser or nominee or
transferee of the Purchaser on the Company's stock transfer records of the
Shares tendered herewith (collectively, a "Distribution"), and appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Shares (and any Distribution) with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) to (a) deliver such Share Certificates (as defined
herein) (and any Distribution) or transfer ownership of such Shares (and any
Distribution) on the account books maintained by the Book-Entry Transfer
Facility, together in either case with appropriate evidences of transfer, to the
Depositary for the account of the Purchaser, (b) present such Shares (and any
Distribution) for transfer on the books of the Company and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and any Distribution), all in accordance with the terms and subject to
the conditions of the Offer.
The undersigned irrevocably appoints designees of the Purchaser as such
stockholder's proxy, with full power of substitution to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder and
accepted for payment by the Purchaser and with respect to any and all other
Shares or other securities issued or issuable in respect of such Shares on or
after February 12, 1999. Such appointment will be effective when, and only to
the extent that, the Purchaser accepts such Shares for payment. Upon such
acceptance for payment, all prior proxies given by such stockholder with respect
to such Shares (and such other Shares and securities) will be revoked without
further action, and no subsequent proxies may be given nor any subsequent
written consents executed (and, if given or executed, will not be deemed
effective). The designees of the Purchaser will be empowered to exercise all
voting and other rights of such stockholder as they in their sole discretion may
deem proper at any annual or special meeting of the Company's stockholders or
any adjournment or postponement thereof, by written consent in lieu of any such
meeting or otherwise. The Purchaser reserves the right to require that, in order
for Shares to be deemed validly tendered, immediately upon the Purchaser's
payment for such Shares the Purchaser must be able to exercise full voting
rights with respect to such Shares.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares (and
any Distribution) tendered hereby and (b) when the Shares are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title to the Shares (and any Distribution), free and clear of all
liens, restrictions, charges and encumbrances, and the same will not be subject
to any adverse claim. The undersigned, upon request, will execute and deliver
any additional documents deemed by the Depositary or the Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby (and any Distribution). In addition, the
5
<PAGE> 5
undersigned shall promptly remit and transfer to the Depositary for the account
of the Purchaser any and all Distributions in respect of the Shares tendered
hereby, accompanied by appropriate documentation of transfer; and pending such
remittance or appropriate assurance thereof, the Purchaser will be, subject to
applicable law, entitled to all rights and privileges as owner of any such
Distribution and may withhold the entire purchase price or deduct from the
purchase price the amount or value thereof as determined by the Purchaser in its
sole discretion.
All authority herein conferred or agreed to be conferred shall not be
affected by and shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date (as defined in the Offer to Purchase) and, unless theretofore
accepted for payment by the Purchaser pursuant to the Offer, may also be
withdrawn at any time after April 22, 1999. See Section 4 of the Offer to
Purchase.
The undersigned understands that tenders of Shares pursuant to any of the
procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions set forth in the
Offer, including the undersigned's representation that the undersigned owns the
Shares being tendered.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or issue or return any
certificate(s) for Shares not tendered or not accepted for payment in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered". Similarly, unless otherwise indicated herein under "Special Delivery
Instructions", please mail the check for the purchase price and/or any
certificate(s) for Shares not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Shares Tendered". In the event that
both the Special Delivery Instructions and the Special Payment Instructions are
completed, please issue the check for the purchase price and/or any
certificate(s) for Shares not tendered or accepted for payment in the name of,
and deliver such check and/or such certificates to, the person or persons so
indicated. The undersigned recognizes that the Purchaser has no obligation,
pursuant to the Special Payment Instructions, to transfer any Shares from the
name(s) of the registered holder(s) thereof if the Purchaser does not accept for
payment any of the Shares so tendered.
6
<PAGE> 6
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be issued in the name of someone other than
the undersigned.
Issue [ ] check [ ] certificates to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAX ID, OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 ON THE REVERSE SIDE)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be sent to someone other than the undersigned
at an address other than that shown above.
Mail [ ] check [ ] certificates to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
------------------------------------------------------------
7
<PAGE> 7
SIGN SIGN HERE SIGN
HERE AND COMPLETE SUBSTITUTE FORM W-9 HERE
X
- --------------------------------------------------------------------------------
& :
X
(Signature(s) of Holder(s))
Dated: , 1999
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
Share Certificate(s) or a security position listing or by person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by trustee, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, please provide the following information and see
Instruction 5.)
Name(s)
- --------------------------------------------------------------------------------
(Please Print)
Capacity (full title)
Address
- --------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number
Tax Identification or
Social Security No.
COMPLETE SUBSTITUTE FORM W-9 ON REVERSE
Guarantee of Signature(s)
(See Instructions 1 and 5)
Authorized Signature
Name
Name of Firm
(Please Print)
Address
(Include Zip Code)
Area Code and Telephone Number
Dated: , 1999
8
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) of Shares tendered herewith, unless such holder(s) has
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" above, or (b) if such Shares are
tendered for the account of a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the Securities
Transfer Agents Medallion Program (each of the foregoing being referred to as an
"Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5 of
this Letter of Transmittal.
2. Requirements of Tender. This Letter of Transmittal is to be completed
by stockholders either if certificates are to be forwarded herewith or, unless
an Agent's Message is utilized, if tenders are to be made pursuant to the
procedure for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Share Certificates, or timely confirmation (a "Book-Entry
Confirmation") of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility, as well as this Letter of
Transmittal (or a facsimile hereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message in connection with a
book-entry transfer, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth herein prior to the Expiration Date (as defined in Section 1 of the Offer
to Purchase). Stockholders whose Share Certificates are not immediately
available or who cannot deliver their Share Certificates and all other required
documents to the Depositary prior to the Expiration Date or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis may tender
their Shares by properly completing and duly executing a Notice of Guaranteed
Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 of
the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made
by or through an Eligible Institution; (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form made available
by the Purchaser, must be received by the Depositary prior to the Expiration
Date; and (iii) the Share Certificates (or a Book-Entry Confirmation)
representing all tendered Shares, in proper form for transfer, in each case
together with the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees (or, in the
case of a book-entry delivery, an Agent's Message) and any other documents
required by this Letter of Transmittal, must be received by the Depositary
within three Nasdaq National Market trading days after the date of execution of
such Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or a facsimile hereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and any other required
information should be listed on a separate signed schedule attached hereto.
4. Partial Tenders. (Not Applicable to Book-Entry Stockholders) If fewer
than all the Shares evidenced by any Share Certificate submitted are to be
tendered, fill in the number of Shares which are to be tendered in the box
entitled "Number of Shares Tendered". In such cases, new Share Certificates for
the Shares that were evidenced by your old Share Certificates, but were not
tendered by you, will be sent to you, unless otherwise provided in the
appropriate box on this Letter of Transmittal, as soon as practicable after the
Expiration Date. All Shares represented by Share Certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
9
<PAGE> 9
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or not purchased are to be issued in the
name of a person other than, the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, the certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificate(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, the Purchaser will pay any stock transfer taxes with respect to the transfer
and sale of Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price is to be made to, or if certificate(s) for Shares
not tendered or accepted for payment are to be registered in the name of, any
person other than the registered holder(s), or if tendered certificate(s) are
registered in the name of any person other than the person(s) signing this
Letter of Transmittal, the amount of any stock transfer taxes (whether imposed
on the registered holder(s) or such person) payable on account of the transfer
to such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes, or an exemption therefrom, is submitted.
Except as otherwise provided in this Instruction 6, it will not be
necessary for transfer tax stamps to be affixed to the certificate(s) listed in
this Letter of Transmittal.
7. Special Payment and Delivery Instructions. If a check is to be issued
in the name of, and/or certificates for Shares not tendered or not accepted for
payment are to be issued or returned to, a person other than the signer of this
Letter of Transmittal or if a check and/or such certificates are to be returned
to a person other than the person(s) signing this Letter of Transmittal or to an
address other than that shown in this Letter of Transmittal, the appropriate
boxes on this Letter of Transmittal must be completed.
8. Waiver of Conditions. Subject to the terms and conditions of the
Merger Agreement, the conditions of the Offer (other than the Minimum Condition
(as defined in the Offer to Purchase)) may be waived by the Purchaser in whole
or in part at any time and from time to time in its sole discretion.
9. 31% Backup Withholding; Substitute Form W-9. Under U.S. federal income
tax law, a stockholder whose tendered Shares are accepted for payment is
required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN, the Internal Revenue Service may subject the
stockholder or other payee to a $50 penalty. In addition, payments that are made
to such stockholder or other payee with respect to Shares purchased pursuant to
the Offer may be subject to 31% backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as
10
<PAGE> 10
an exempt recipient, the stockholder must submit a Form W-8, signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-8
can be obtained from the Depositary. See the enclosed "Guidelines for
Certification of Payer Identification Number on Substitute Form W-9" for more
instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder or other payee. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service by filing a United States federal income return with the
Internal Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has applied for a TIN but has not yet been issued a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the Depositary.
The stockholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Shares. If the Shares are in more than one name or are not in
the name of the actual owner, consult the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
guidance on which number to report.
10. Requests for Assistance or Additional Copies. Questions or requests
for assistance may be directed to the Dealer Managers or the Information Agent
at their respective addresses and telephone numbers set forth below. Additional
copies of the Offer to Purchase, this Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent or from
brokers, dealers, commercial banks or trust companies.
11. Lost, Destroyed or Stolen Certificates. If any certificate
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER
WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER OR THE NOTICE OF
GUARANTEED DELIVERY, AND ALL OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE.
11
<PAGE> 11
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------
PAYER'S NAME: CONTINENTAL STOCK TRANSFER & TRUST CO.
- ----------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN
FORM W-9 IN THE BOX AT RIGHT AND CERTIFY BY Social Security Number
DEPARTMENT OF THE TREASURY SIGNING AND DATING BELOW. OR
INTERNAL REVENUE SERVICE
Employer Identification
Number
--------------------------------------------------------------------
PART 2 -- Certification -- Under Part 3 --
the penalties of perjury, I certify Awaiting TIN
that: [ ]
(1) The number shown on this form
is my correct Taxpayer
Identification Number (or I am
waiting for a number to be
issued to me), and
(2) I am not subject to backup
withholding because (a) I am exempt
from backup withholding, or (b)
I have not been notified by the
Internal Revenue Service (the
"IRS") that I am subject to
backup withholding as a result
of a failure to report all
interest or dividends, or (c)
the IRS has notified me that I
am no longer subject to backup
withholding.
--------------------------------------------------------------------
PAYER'S REQUEST FOR CERTIFICATE INSTRUCTIONS -- You must cross out item (2) above if
TAXPAYER you have been notified by the IRS that you are currently subject to
IDENTIFICATION NUMBER (TIN) backup withholding because of under-reporting interest or dividends
on your tax return. However, if after being notified by the IRS
that you were subject to backup withholding you received another
notification from the IRS that you are no longer subject to backup
withholding, do not cross out such item (2).
--------------------------------------------------------------------
SIGN HERE SIGNATURE DATE _____________________________
- ----------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER,
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all reportable payments made to me will be withheld.
SIGNATURE DATE ________________________, 1999
12
<PAGE> 12
The Information Agent for the Offer is:
[MACKENZIE LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
(800) 322-2885 (Call Toll-Free)
BANKS AND BROKERS CALL COLLECT: (212) 929-5500
ALL OTHERS CALL TOLL FREE: (800) 322-2885
The Dealer Managers for the Offer are:
<TABLE>
<S> <C>
DONALDSON, LUFKIN & JENRETTE NATIONSBANC MONTGOMERY SECURITIES LLC
277 Park Avenue 600 Montgomery Street
New York, New York 10172 San Francisco, California 94111
(877) 893-0567 (Call (800) 227-4786 Ext. 2044 (Toll-Free)
Toll-Free)
(212) 892-8117
</TABLE>
Date: February 22, 1999
13
<PAGE> 1
EXHIBIT 11(A)(3)
NOTICE OF GUARANTEED DELIVERY
TO
TENDER SHARES OF COMMON STOCK
OF
AMERICAN SAFETY RAZOR COMPANY
AS SET FORTH IN SECTION 3 OF THE OFFER TO PURCHASE DESCRIBED BELOW, THIS
INSTRUMENT OR ONE SUBSTANTIALLY EQUIVALENT HERETO MUST BE USED TO ACCEPT THE
OFFER (AS DEFINED BELOW) IF CERTIFICATES FOR SHARES (AS DEFINED BELOW) ARE NOT
IMMEDIATELY AVAILABLE OR THE CERTIFICATES FOR SHARES AND ALL OTHER REQUIRED
DOCUMENTS CANNOT BE DELIVERED TO THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN SECTION 1 OF THE OFFER TO PURCHASE) OR IF THE PROCEDURE FOR DELIVERY
BY BOOK-ENTRY TRANSFER CANNOT BE COMPLETED ON A TIMELY BASIS. THIS INSTRUMENT
MAY BE DELIVERED BY HAND OR TRANSMITTED BY FACSIMILE TRANSMISSION OR MAIL TO THE
DEPOSITARY.
The Depositary for the Offer is:
CONTINENTAL STOCK TRANSFER & TRUST CO.
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Delivery:
Reorganization Department (for Eligible Institutions only) Reorganization Department
Two Broadway (212) 509-5150 Two Broadway
19th Floor 19th Floor
New York, NY 10004 New York, NY 10004
Confirm by Telephone:
(212) 509-4000 x535
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box in the Letter of Transmittal.
Ladies and Gentlemen:
The undersigned hereby tender(s) to RSA Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of RSA Holdings Corp. of Delaware, a
Delaware corporation, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated February 22, 1999 (the "Offer to Purchase"), and in
the related Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"), receipt of which is hereby acknowledged, the number of
shares of Common Stock, $0.01 par value per share (the "Shares"), of American
Safety Razor Company, a Delaware corporation, pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase.
<PAGE> 2
Signature(s)
---------------------------------------
Name(s) of Record Holders
-----------------------------------------------------
Please Type or Print
Number of Shares
---------------------------------
Certificate Nos. (If Available)
-----------------------------------------------------
-----------------------------------------------------
Dated
----------------------------------------, 1999
Address(es)
---------------------------------------
-----------------------------------------------------
Zip Code
Area Code and Tel. No.(s)
(Check the box below if Shares will be tendered
by book-entry transfer)
[ ] The Depositary Trust Company
Account Number
---------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program, (a) represents that the above
named person(s) "own(s)" the Shares tendered hereby within the meaning of Rule
14e-4 under the Securities Exchange Act of 1934, as amended ("Rule 14e-4"),
(b) represents that such tender of Shares complies with Rule 14e-4, and (c)
guarantees to deliver to the Depositary either the certificates evidencing all
tendered Shares, in proper form for transfer, or to deliver Shares pursuant to
the procedure for book-entry transfer into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility"), in either case
together with the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, with any required signature guarantees or an
Agent's Message (as defined in the Offer to Purchase) in the case of a
book-entry delivery, and any other required documents, all within three Nasdaq
National Market trading days after the date hereof.
-----------------------------------------------------
Name of Firm
-----------------------------------------------------
Address
-----------------------------------------------------
Zip Code
Area Code and Tel. No.
-----------------------------------------------------
Authorized Signature
-----------------------------------------------------
Please Type or Print
Title
-----------------------------------------------
Dated
---------------------------------------, 1999
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES MUST
BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE> 1
EXHIBIT 11(A)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
AMERICAN SAFETY RAZOR COMPANY
at
$14.125 Net Per Share
by
RSA ACQUISITION CORP.
a wholly owned subsidiary of
RSA HOLDINGS CORP. OF DELAWARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED.
February 22, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by RSA Acquisition Corp., a Delaware corporation
(the "Purchaser") and a wholly owned subsidiary of RSA Holdings Corp. of
Delaware, a Delaware corporation (the "Parent"), to act as Dealer Managers in
connection with the Purchaser's offer to purchase for cash all the outstanding
shares of Common Stock, par value $0.01 per share (the "Shares"), of American
Safety Razor Company, a Delaware corporation (the "Company"), at a purchase
price of $14.125 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 February 22, 1999 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which together constitute the "Offer") enclosed herewith. Holders
of Shares whose certificates for such Shares (the "Share Certificates") are not
immediately available or who cannot deliver their Share Certificates and all
other required documents to the Depositary (as defined below) prior to the
Expiration Date (as defined in the Offer to Purchase), or who cannot complete
the procedures for book-entry transfer on a timely basis, must tender their
Shares according to the guaranteed delivery procedures set forth in Section 3 of
the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated February 22, 1999.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of
Transmittal may be used to tender Shares.
3. The Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if certificates for the Shares (the "Share Certificates") are not
immediately available or if such certificates and all other required
documents cannot be delivered to Continental Stock Transfer & Trust Co.
(the "Depositary") by the Expiration Date or if the procedure for
book-entry transfer cannot be completed by the Expiration Date.
4. The Letter to Stockholders of the Company from the Chairman of the
Board, President and Chief Executive Officer of the Company, accompanied
by the Company's Solicitation/Recommendation Statement on Schedule
14D-9.
<PAGE> 2
5. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions
with regard to the Offer.
6. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9.
7. A return envelope addressed to Continental Stock Transfer & Trust Co.,
Reorganization Department, Two Broadway, 19th Floor, New York, NY 10004,
the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, MARCH 19, 1999, UNLESS THE OFFER
IS EXTENDED.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal and any required signature guarantees, or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares, and any other required documents should be sent
to the Depositary and (ii) either Share Certificates representing the tendered
Shares should be delivered to the Depositary or such Shares should be tendered
by book-entry transfer into the Depositary's account maintained at the
Book-Entry Transfer Facility (as described in the Offer to Purchase), all in
accordance with the instructions set forth in the Letter of Transmittal and the
Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Dealer Managers, the Depositary and MacKenzie
Partners (the "Information Agent") (as described in the Offer to Purchase)) for
soliciting tenders of Shares pursuant to the Offer. The Purchaser will, however,
upon request, reimburse you for customary clerical and mailing expenses incurred
by you in forwarding any of the enclosed materials to your clients. The
Purchaser will pay or cause to be paid any stock transfer taxes payable on the
transfer of Shares to it, except as otherwise provided in Instruction 6 of the
Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
the undersigned, or the Information Agent, at their respective addresses and
telephone numbers set forth on the back cover of the Offer to Purchase.
Additional copies of the enclosed materials may be obtained from the Information
Agent.
Very truly yours,
DONALDSON, LUFKIN & JENRETTE
NATIONSBANC MONTGOMERY SECURITIES LLC
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, THE PARENT, THE DEALER MANAGERS,
THE COMPANY, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY
DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
2
<PAGE> 1
EXHIBIT 11(A)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
AMERICAN SAFETY RAZOR COMPANY
at
$14.125 Net Per Share
by
RSA ACQUISITION CORP.
a wholly owned subsidiary of
RSA HOLDINGS CORP. OF DELAWARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 19, 1999, UNLESS THE OFFER IS EXTENDED.
FEBRUARY 22, 1999
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated February 22,
1999 (the "Offer to Purchase"), and the related Letter of Transmittal relating
to an offer by RSA Acquisition Corp., a Delaware corporation (the "Purchaser")
and a wholly owned subsidiary of RSA Holdings Corp. of Delaware, a Delaware
corporation (the "Parent"), to purchase all of the outstanding shares of Common
Stock, $0.01, par value per share (the "Shares"), of American Safety Razor
Company, a Delaware corporation (the "Company"), at a purchase price of $14.125
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 and in the
related Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"). We are the holder of record of Shares held by us for
your account. A tender of such Shares can be made only by us as the holder of
record and pursuant to your instructions. The Letter of Transmittal is furnished
to you for your information only and cannot be used by you to tender Shares held
by us for your account.
We request instructions as to whether you wish to have us tender on your
behalf any or all of such Shares held by us for your account, pursuant to the
terms and subject to the conditions set forth in the Offer to Purchase.
Your attention is directed to the following:
1. The tender price is $14.125 per share, net to the seller in cash without
interest thereon.
2. The Offer is made for all of the outstanding Shares.
3. The Board of Directors of the Company has unanimously determined that
the Merger Agreement (as defined below) and the transactions
contemplated thereby, including each of the Offer and the Merger (as
defined below), are fair to and in the best interests of the
stockholders of the Company and recommends that holders of the Shares
accept the Offer and tender their Shares to the Purchaser.
4. The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of February 12, 1999 (the "Merger Agreement"), which provides
that subsequent to the consummation of the Offer, the Purchaser will
merge with and into the Company (the "Merger"). At the effective time of
the Merger
<PAGE> 2
(the "Effective Time"), each Share issued and outstanding immediately
prior to the Effective Time (other than Shares held in the treasury of
the Company and Shares, if any, owned by the Purchaser, the Parent or
any direct or indirect subsidiary of the Parent or of the Company and
other than Shares, if any, held by stockholders who have not voted in
favor of the Merger Agreement or consented thereto in writing and have
timely delivered to the Company demand for appraisal of such Shares in
accordance with the Delaware General Corporation Law) shall be
cancelled, extinguished and converted automatically into the right to
receive $14.125 in cash, without interest.
5. The Offer and withdrawal rights will expire at 12:00 Midnight, New York
City time, on Friday, March 19, 1999, unless the Offer is extended.
6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to
the Offer.
7. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not properly withdrawn prior to the expiration of
the Offer, at least that number of Shares which, when combined with the
Shares owned, directly or indirectly, by the Parent and its direct and
indirect subsidiaries, constitute more than 50% of the voting power
(determined on a fully-diluted basis) of all securities of the Company
entitled to vote generally in the election of directors or in a merger
and (ii) the expiration or termination of all applicable waiting periods
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. The Purchaser
is not aware of any State where the making of the Offer is prohibited by
administrative or judicial action pursuant to any valid State statute. If the
Purchaser becomes aware of any valid State statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a
good faith effort to comply with any such State statute. If, after such good
faith effort, the Purchaser cannot comply with such State statute, the Offer
will not be made to nor will tenders be accepted from or on behalf of the
holders of Shares in such State. In any jurisdiction where the securities, "blue
sky" or other laws require the Offer to be made by a licensed broker or dealer,
the Offer shall be deemed to be made on behalf of the Purchaser by the Dealer
Managers or one or more registered brokers or dealers that are licensed under
the laws of such jurisdiction.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. If you authorize a tender of your
Shares, all such Shares will be tendered unless otherwise specified in such
instruction form. Your instructions should be forwarded to us in ample time to
permit us to submit a tender on your behalf prior to the expiration of the
Offer.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
AMERICAN SAFETY RAZOR COMPANY
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase dated February 22, 1999 (the "Offer to Purchase"), and the related
Letter of Transmittal pursuant to an offer by RSA Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of RSA Holdings Corp. of Delaware, a
Delaware corporation, to purchase all outstanding shares of Common Stock, $0.01
par value per share (the "Shares"), of American Safety Razor Company, a Delaware
corporation.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) which are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal
furnished to the undersigned.
Number of Shares to be Tendered*
Shares
Dated , 1999
SIGN HERE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature(s)
- --------------------------------------------------------------------------------
Please print name(s)
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
Area Code and Telephone Number
- --------------------------------------------------------------------------------
Tax Identification or Social Security Number
- ------------------------------
* Unless otherwise indicated, it will be assumed that all of your Shares held by
us for your account are to be tendered.
<PAGE> 1
EXHIBIT 11(A)(6
)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER FOR THE PAYEE (YOU)
TO GIVE THE PAYER. -- Social security numbers have nine digits separated by two
hyphens: i.e., 000-00-0000. Employee identification numbers have nine digits
separated by only one hyphen: i.e., 00-0000000. The table below will help
determine the number to give the payer. All "Section" references are to the
Internal Revenue Code of 1986, as amended. "IRS" is the Internal Revenue
Service.
------------------------------------------------------------------
<TABLE>
<S> <C> <C>
GIVE THE SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- ---------------------------------------------------------------------
1. Individual The individual
2. Two or more individuals (joint The actual owner of the ac-
account) count or, if combined funds,
the first individual on the
account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-trustee(1)
trust account (grantor is also
trustee)
The actual owner.(1)
b. So-called trust account that
is not a legal or valid trust
under state law
5. Sole proprietorship The owner(3)
- ---------------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF --
- ---------------------------------------------------------------------
6. Sole proprietorship The owner(3)
7. A valid trust, estate, or The legal entity(4)
pension trust
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational, or
other tax-exempt organization
account
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a state
or local government, school
district, or prison) that
receives agricultural program
payments
</TABLE>
------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
your employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5. Application for a Social Security Card, at the local
Social Administration office, or Form SS-4, Application for Employer
Identification Number, by calling 1 (800) TAX-FORM, and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from withholding include:
- - An organization exempt from tax under Section 501(a), an individual retirement
account (IRA), or a custodial account under Section 403(b)(7), if the account
satisfies the requirements of Section 401(f)(2).
- - The United States or a state thereof, the District of Columbia, a possession
of the United States, or a political subdivision or wholly-owned agency or
instrumentality of any one or more of the foregoing.
- - An international organization or any agency or instrumentality thereof.
- - A foreign government and any political subdivision, agency or instrumentality
thereof.
Payees that may be exempt from backup withholding include:
- - A corporation.
- - A financial institution.
- - A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
- - A real estate investment trust.
- - A common trust fund operated by a bank under Section 584(a).
- - An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- - A middleman known in the investment community as a nominee or who is listed in
the most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List.
- - A futures commission merchant registered with the Commodity Futures Trading
Commission.
- - A foreign central bank of issue.
Payments of dividends and patronage dividends generally exempt from backup
withholding include:
- - Payments to nonresident aliens subject to withholding under Section 1441.
- - Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
- - Payments of patronage dividends not paid in money.
- - Payments made by certain foreign organizations.
- - Section 404(k) payments made by an ESOP.
Payments of interest generally exempt from backup withholding include:
- - Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and you have
not provided your correct taxpayer identification number to the payer.
- - Payments of tax-exempt interest (including exempt-interest dividends under
Section 852).
- - Payments described in Section 6049(b)(5) to nonresident aliens.
- - Payments on tax-free covenant bonds under Section 1451.
- - Payments made by certain foreign organizations.
- - Mortgage interest paid to you.
Certain payments, other than payments of interest, dividends, and patronage
dividends, that are exempt from information reporting are also exempt from
backup withholding. For details, see the regulations under sections 6041, 6041A,
6042, 6044, 6045, 6049, 6050A and 6050N.
EXEMPT PAYEES DESCRIBED ABOVE MUST FILE FORM W-9 OR A SUBSTITUTE FORM W-9 TO
AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER,
FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART II OF THE
FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE OF INTEREST, DIVIDENDS, OR
PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.
PRIVACY ACT NOTICE. -- Section 6109 requires you to provide your correct
taxpayer identification number to payers, who must report the payments to the
IRS. The IRS uses the number for identification purposes and may also provide
this information to various government agencies for tax enforcement or
litigation purposes. Payers must be given the numbers whether or not recipients
are required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to payer. Certain penalties may also apply.
PENALTIES
(1) FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you fail to furnish
your taxpayer identification number to a payer, you are subject to a penalty of
$50 for each such failure unless your failure is due to reasonable cause and not
to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
EXHIBIT 11(A)(7)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer (as defined below) is made solely
by the Offer to Purchase dated February 22, 1999 and the related Letter of
Transmittal (and any amendments thereto) and is being made to all holders of
Shares. The Purchaser (as defined below) is not aware of any state where the
making of the Offer is prohibited by administrative or judicial action pursuant
to a state statute. If the Purchaser becomes aware of any state where the making
of the Offer is prohibited, the Purchaser will make a good faith effort to
comply with any such statute or seek to have such statute declared inapplicable
to the Offer. If, after such good faith effort, the Purchaser cannot comply with
any applicable statute, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares in such state. In those
jurisdictions where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser by the Dealer Managers or one or more registered brokers
or dealers licensed under the laws of such jurisdictions.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
of
AMERICAN SAFETY RAZOR COMPANY
at
$14.125 NET PER SHARE
by
RSA ACQUISITION CORP.
a wholly owned subsidiary of
RSA HOLDINGS CORP. OF DELAWARE
RSA Acquisition Corp., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of RSA Holdings Corp. of Delaware, a Delaware
corporation (the "Parent"), is offering to purchase all of the outstanding
shares of Common Stock, par value $0.01 per share (the "Shares"), of American
Safety Razor Company, a Delaware corporation (the "Company"), at a purchase
price of $14.125 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 February 22, 1999 (the "Offer to Purchase") and in the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"). RSA Holdings Corp. of Delaware is a wholly owned subsidiary of J.W.
Childs Equity Partners II, L.P.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, MARCH 19, 1999, 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 A
NUMBER OF SHARES WHICH CONSTITUTES MORE THAN 50% OF THE VOTING POWER (DETERMINED
ON A FULLY-DILUTED BASIS), ON THE DATE OF PURCHASE, OF ALL SECURITIES OF THE
COMPANY ENTITLED TO VOTE GENERALLY IN THE ELECTION OF DIRECTORS OR IN A MERGER.
The purpose of the Offer is to acquire control of, and the entire
equity interest in, the Company. Following the consummation of the Offer, the
Purchaser intends to effect the Merger described below. The Offer is being made
pursuant to an Agreement and Plan of Merger, dated as of February 12, 1999 (the
"Merger Agreement"), among the Parent, the Purchaser and the Company. The Merger
Agreement provides, among other things, for the making of the Offer by the
Purchaser, and further provides that, following the completion of the Offer,
upon the terms and subject to the conditions of the Merger Agreement and the
Delaware General Corporation Law ("DGCL"), the Purchaser will be merged with and
into the Company (the "Merger"), and each Share issued and outstanding
immediately prior to the effective time of the Merger (other than any Shares
held by the Parent, the Purchaser, any wholly owned subsidiary of the Parent 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, shall be canceled and
shall cease to exist with no payment being made with respect thereto, and other
than Shares held by holders who perfect dissenters' rights under the DGCL) will
be converted into the right to receive $14.125 in cash payable to the holder
thereof, without interest, upon surrender of the certificate formerly
representing such Share. The Merger Agreement is more fully described in Section
11 of the Offer to Purchase.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT
THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH
OF THE OFFER AND THE MERGER, ARE FAIR TO AND IN THE BEST INTERESTS OF THE
STOCKHOLDERS AND RECOMMENDS THAT ALL STOCKHOLDERS ACCEPT THE OFFER AND TENDER
ALL OF THEIR SHARES TO THE PURCHASER.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment (and thereby purchased) Shares validly tendered and not
properly withdrawn as, if and when the Purchaser gives oral or written notice to
Continental Stock Transfer & Trust Company (the "Depositary") of the Purchaser's
acceptance for payment of such Shares pursuant to the Offer. Upon the terms and
subject to the conditions of the Offer, payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payments from the Purchaser and transmitting such payments
to stockholders whose Shares have been accepted for payment. Under no
circumstances will interest on the purchase price for Shares be paid, regardless
of any extension of the Offer or any delay in making such payment. In all cases,
payment for Shares tendered and accepted for payment pursuant to the Offer will
be made only after timely receipt by the Depositary of (i) certificates
representing such Shares (the "Share Certificates") or timely confirmation of a
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company ("DTC") pursuant to the procedures set forth in Section
3 of the Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message (as defined in Section 2 of the Offer to
Purchase) in connection with a book-entry transfer, and (iii) any other
documents required by the Letter of Transmittal.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission and the terms of the Merger Agreement, the Purchaser
expressly reserves the right, in its sole discretion, at any time and from time
to time, and regardless of whether or not any of the events set forth in Section
15 of the Offer to Purchase shall have occurred or shall have been determined by
the Purchaser to have occurred, to (i) extend the period of time during which
the Offer is open and thereby delay acceptance for payment of, and the payment
for, any Shares, by giving oral or written notice of such extension to the
Depositary and (ii) amend the Offer in any respect by giving oral or written
notice of such amendment to the Depositary. Any extension, delay, termination,
waiver or amendment will be followed as promptly as practicable by public
announcement to be made no later than 9:00 A.M., New York City time, on the next
business day after the previously scheduled Expiration Date.
During any such extension all Shares previously tendered and not
properly withdrawn will remain subject to the Offer, subject to the rights of a
tendering stockholder to withdraw such stockholder's Shares.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Friday, March 19, 1999, unless and until the Purchaser, in its discretion (but
subject to the terms and conditions of the Merger Agreement), shall have
extended the period during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by the Purchaser, shall expire.
Tenders of Shares made pursuant to the Offer are irrevocable, except
that Shares tendered pursuant to the Offer may be withdrawn at any time on or
prior to the Expiration Date and, unless theretofore accepted for payment by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after April
22, 1999. For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name of the registered holder, if different from that of the person who
tendered such Shares. If Share Certificates to be withdrawn have been delivered
or otherwise identified to the Depositary, then prior to the physical release of
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in Section 3 of the
Offer to Purchase) unless such Shares have been tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 3 of the Offer to Purchase, any
notice of withdrawal must specify the name and number of the account at DTC to
be credited with the withdrawn Shares, in which case a notice of withdrawal will
be effective if delivered to the Depositary by any method of delivery described
in the second sentence of this paragraph. All questions as to the form and
validity (including time of receipt) of any notice of withdrawal will be
determined by the Purchaser, in its sole discretion, whose determination will be
final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided the Purchaser with the Company's stockholder
list and security position listings for the purpose of disseminating the Offer
to holders of Shares. The Offer to Purchase and the related Letter of
Transmittal and other relevant materials will be mailed by the Purchaser to
record holders of Shares and furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Dealer
Managers or the Information Agent as set forth below. Requests for copies of the
Offer to Purchase and the related Letter of Transmittal and all other tender
offer materials may be directed to the Information Agent, and copies will be
furnished promptly at the Purchaser's expense. The Purchaser will not pay any
fees or commissions to any broker or dealer or any other person (other than the
Dealer Managers) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
[MACKENZIE PARTNERS, INC. LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885
The Dealer Managers for the Offer are:
Donaldson, Lufkin & Jenrette NationsBanc Montgomery Securities LLC
277 Park Avenue 600 Montgomery Street
New York, New York 10172 San Francisco, CA 94111
(877) 893-0576 (Toll-Free) (800) 227-4786 Ext. 2044 (Toll-Free)
(212) 892-8117 (Call Collect)
February 22, 1999
<PAGE> 1
EXHIBIT 11(A)(8)
Copyright 1999 Business Wire, Inc.
Business Wire
February 15, 1999, Monday
DISTRIBUTION: Business Editors
LENGTH: 544 words
HEADLINE: J. W. Childs to Acquire American Safety Razor Company
DATELINE: STAUNTON, VA
BODY:
Feb. 15, 1999--J. W. Childs Equity Partners II, L.P. and American Safety
Razor Company (Nasdaq:RAZR) today announced that they have entered into a
definitive merger agreement under which J. W. Childs will acquire American
Safety Razor for $ 14 1/8 per share or approximately $ 173 million in cash.
Pursuant to the Merger Agreement, a cash tender offer will be commenced by a
wholly-owned subsidiary of J. W. Childs no later than February 22, 1999 to
acquire all of the outstanding shares of common stock of American Safety Razor.
On Friday, February 12, 1999, the last reported sales price of common stock of
American Safety Razor was $ 9 7/8. The Board of Directors of American Safety
Razor has unanimously approved the merger agreement. PaineWebber Incorporated
has rendered a fairness opinion to the Board of Directors in connection with the
transaction.
The tender offer will be subject to the valid tender of shares representing
a majority of the voting power (determined on a fully diluted basis) of American
Safety Razor, the expiration of the waiting period under applicable antitrust
and competition laws, and other customary conditions.
The Jordan Company, certain of its affiliates, partners and officers, and
members of American Safety Razor's senior management, collectively the holders
of approximately 19% of the stock of American Safety Razor, have contractually
agreed to support the transaction and tender the shares of American Safety Razor
held by them in response to the tender offer.
Funding for the tender offer and merger and the transactions contemplated
thereby will be provided with approximately $ 245 million of debt commitments
made by J. W. Childs, NationsBank, N.A. and Donaldson, Lufkin & Jenrette. J. W.
Childs has also made an equity investment commitment of $ 90 million.
American Safety Razor Company is the leading manufacturer of private-brand
and value-priced shaving blades and razors in the United States. The Company's
shaving blade and razor products are sold under retailers' private-brand names
as well as American Safety Razor's own brands: Personna(R), Gem(R), Flicker(R),
LegMate(R), Bump Fighter(R), Treet(R), GEM Blue Star(R), Pal(R), MBC(TM) and
Burma Shave(TM). The Company also manufactures cotton swabs, cotton balls and
puffs, and foot care items which are sold under retailers' private-brand names
as well as its own value-priced brands, Megas(R), ACCO(R), and Crystal(R). The
Company is also a leading manufacturer of premium and value-priced blades and
bladed hand tools, sold primarily under the Personna(R), American Line(TM), and
Ardell(TM) brand names, as well as bar soaps for the cosmetic/skin care,
<PAGE> 2
PAGE 3
Business Wire, February 15, 1999
pharmaceutical, and department store markets. In addition to its consumer
products, American Safety Razor manufactures and markets industrial and
specialty and medical blades. J. W. Childs is a private investment firm based in
Boston.
CONTACT: American Safety Razor Company, Staunton
Thomas G. Kasvin, 540/248-9725
<PAGE> 1
EXHIBIT 11(B)(1)
February 12, 1999
RSA Acquisition Corp.
c/o J.W. Childs Equity Partners II, L.P.
One Federal Street
21st Floor
Boston, MA 02110
Attention: Mr. Adam Suttin
AMERICAN SAFETY RAZOR COMPANY
Ladies and Gentlemen:
You have advised NationsBank, N.A. ("NATIONSBANK"), NationsBanc Montgomery
Securities LLC ("NMS") and DLJ Capital Funding, Inc. ("DLJ") that J.W. Childs
Equity Partners II, L.P. or one of its affiliates ("JWC") will organize a
single-purpose, wholly-owned subsidiary ("HOLDINGS"). Holdings in turn will
organize a single-purpose, wholly-owned subsidiary (the "PURCHASER") that,
pursuant to a merger agreement (the "MERGER AGREEMENT"), dated as of the date
hereof, entered into with American Safety Razor Company, a Delaware corporation
(the "COMPANY"), will offer to acquire through a tender offer (the "STOCK TENDER
OFFER") for $14.125 in cash per share all of the shares of the Company's
outstanding common stock (the "COMPANY STOCK"), subject to the minimum condition
provided for in the Stock Tender Offer. As promptly as practicable after the
closing of the Stock Tender Offer, the Purchaser (or a subsidiary of the
Purchaser) will consummate a merger (the "MERGER") with the Company in which the
Company will be the surviving corporation and a wholly-owned subsidiary of
Holdings.
You have further advised us that concurrently with the commencement of the Stock
Tender Offer, the Purchaser will commence a tender offer/consent solicitation at
an offer price and on the other terms set forth in the schedules to the Merger
Agreement (the "BOND TENDER OFFER"; and together with the Stock Tender Offer,
the "TENDER OFFERS") for all of the Company's 9-7/8% Senior Notes due 2005 (the
"SENIOR NOTES"), but in any event not less than a majority in principal amount
of the Senior Notes then outstanding (the "MINIMUM BOND TENDER CONDITION"). The
Bond Tender Offer shall be scheduled to close (including any extensions) at
least two business days following the closing of the Stock Tender Offer. The
Tender Offers, the Merger and the related equity and debt financings described
below in this letter are hereinafter collectively referred to as the
"TRANSACTION".
We understand that you intend to finance the Transaction, the costs and expenses
related to the Transaction and the ongoing working capital needs and other
general corporate purposes of the Company and its subsidiaries after
consummation of the Transaction from the following sources (and that no
financing other than the financings described herein will be required in
connection with the Transaction): (a) at least $90 million of common equity will
be contributed in cash to Holdings by JWC and certain members of management of
the Company (provided, that management "rollover" stock shall be included as
part of such amount in amounts that are acceptable to NationsBank, DLJ and NMS),
(b) Holdings shall
<PAGE> 2
issue to JWC for cash not less than $55 million in unsecured, pay-in-kind debt
(the "HOLDINGS DEBT"), (c) up to $190 million in senior secured credit
facilities of the Purchaser and the Company (the "SENIOR CREDIT FACILITIES"),
comprised of (i) term loan facilities aggregating up to $165 million and (ii) a
revolving credit facility of up to $25 million and (d) if the Minimum Bond
Tender Condition is met, at least $100 million in gross proceeds from the
issuance and sale by the Company of senior subordinated unsecured notes (the
"SUBORDINATED DEBT"). If the Subordinated Debt is issued on the Closing Date,
the proceeds thereof will automatically reduce the Senior Credit Facilities by
$40 million.
In connection with the foregoing, each of NationsBank and DLJ is pleased to
advise you of its several (and not joint) commitment to provide 50% of the full
principal amount of the Senior Credit Facilities and NationsBank is pleased to
advise you of its commitment to act as the sole and exclusive administrative
agent (in such capacity, the "ADMINISTRATIVE AGENT") for the Senior Credit
Facilities, in each case upon and subject to the terms and conditions set forth
in this letter and in the summary of terms attached as Annex I hereto (the
"SUMMARY OF TERMS" and, together with this letter agreement, the "COMMITMENT
LETTER"). Each of NMS and DLJ is pleased to advise you of its willingness, as a
co-arranger (each a "CO-ARRANGER" and, collectively, the "CO-ARRANGERS") and, in
the case of DLJ, as syndication agent (the "SYNDICATION AGENT"), for the Senior
Credit Facilities, to form a syndicate of financial institutions and
institutional lenders (collectively, the "LENDERS") reasonably acceptable to you
for the Senior Credit Facilities. All capitalized terms used and not otherwise
defined herein shall have the same meanings as specified therefor in the Summary
of Terms.
The commitment of each of NationsBank and DLJ hereunder and the undertaking of
NMS and DLJ to provide the services described herein are subject to the
satisfaction of each of the following conditions precedent in a manner
acceptable to NationsBank, DLJ and NMS: (a) prior to and during the syndication
of the Senior Credit Facilities there shall be no competing offering, placement
or arrangement of any debt securities or bank financing by or on behalf of
Holdings, the Company or any of its subsidiaries (other than either the
Subordinated Debt or the Holdings Debt); (b) no material adverse change in or
material disruption of conditions in the market for syndicated bank credit
facilities or the financial, banking or capital markets generally shall have
occurred and be continuing that, in the reasonable judgment of NationsBank, DLJ
or NMS, would materially impair the syndication of the Senior Credit Facilities;
and (c) no change, occurrence or development shall have occurred since September
30, 1998, and no information shall have become known to NationsBank, DLJ or NMS
since the date of this Commitment Letter, that could reasonably be expected to
(1) have a material adverse effect on the business, assets, liabilities (actual
or contingent), operations, condition (financial or otherwise) or prospects of
Holdings, the Company or the Company's subsidiaries, taken as a whole, (2)
materially adversely affect the ability of the Borrower or any Guarantor (as
defined in the Summary of Terms), taken as a whole, to perform their obligations
under the loan documentation or (3) materially adversely affect the rights and
remedies of the Administrative Agent or the Lenders under the loan documentation
(collectively, a "MATERIAL ADVERSE EFFECT").
NMS and DLJ intend to commence syndication of the Senior Credit Facilities
promptly after your acceptance of this Commitment Letter and the Fee Letter (as
hereinafter defined). You agree to actively assist, and to cause the Company to
actively assist, NMS in achieving a syndication of the Senior Credit Facilities
that is satisfactory to NMS, DLJ and you. Such assistance shall include (a) your
providing and causing your advisors to provide NationsBank, NMS and DLJ and the
other Lenders upon request with all information reasonably deemed necessary by
NationsBank, DLJ and NMS to complete syndication, including, but not limited to,
information and evaluations prepared by you, the Company, the proposed new
management of the Company and your and their advisors, or on your or their
behalf, relating to the
<PAGE> 3
Transaction, (b) your assistance in the preparation of an Information Memorandum
to be used in connection with the syndication of the Senior Credit Facilities,
(c) using your commercially reasonable efforts to ensure that the syndication
efforts of NMS and DLJ benefit materially from your existing lending
relationships and the existing lending relationships of the Company and (d)
otherwise assisting NationsBank, DLJ and NMS in their syndication efforts,
including by making your officers and advisors and the officers and advisors of
the Company and its subsidiaries available from time to time to attend and make
presentations regarding the business and prospects of the Company and its
subsidiaries, as appropriate, at one or more meetings of prospective Lenders.
If the syndication of the Senior Credit Facilities cannot be successfully
completed in a manner satisfactory to NationsBank, DLJ and NMS under the
structure outlined in this Commitment Letter, you hereby agree that NationsBank
and NMS or DLJ shall be entitled, in consultation with you, to change the
pricing, structure, tenor or other terms of the Senior Credit Facilities if we
determine that such changes are advisable in order to ensure a successful
syndication therefor; provided that the aggregate amount of the commitment in
respect of the Senior Credit Facilities shall remain unchanged. The agreement in
this paragraph shall survive the closing of the Senior Credit Facilities until
each of NationsBank and DLJ shall have reduced its commitments under the Senior
Credit Facilities to its desired hold position.
It is understood and agreed that NMS and DLJ will manage and control all aspects
of the syndication in consultation with you, including decisions as to the
selection of prospective Lenders and any titles offered to proposed Lenders,
when commitments will be accepted and the final allocations of the commitments
among the Lenders. It is understood that no Lender participating in the Senior
Credit Facilities will receive compensation from you in order to obtain its
commitment, except on the terms contained herein and in the Summary of Terms. It
is also understood and agreed that the amount and distribution of the fees among
the Lenders will be at the sole discretion of NationsBank, DLJ and NMS.
You hereby represent, warrant and covenant that (a) all information, other than
Projections (as defined below), which has been or is hereafter made available to
NationsBank, DLJ, NMS or the Lenders by you or any of your affiliates or
representatives (or on your or their behalf) or by the Company or any of its
subsidiaries or representatives (or on their behalf) in connection with any
aspect of the Transaction (the "INFORMATION"), taken as a whole, is and will be
complete and correct in all material respects and does not and will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein not misleading and (b) all
financial projections concerning the Company and its subsidiaries that have been
or are hereafter made available to NationsBank, DLJ, NMS or the Lenders by you
or any of your affiliates or representatives (or on your or their behalf) or by
the Company or any of its subsidiaries or representatives (or on their behalf)
(the "PROJECTIONS") have been or will be prepared in good faith based upon
reasonable assumptions. You agree to furnish us with such Information and
Projections as we may reasonably request and to supplement the Information and
the Projections from time to time until the date of the initial borrowing under
the Senior Credit Facilities (the "CLOSING DATE") so that the representation,
warranty and covenant in the immediately preceding sentence is correct on the
Closing Date. In issuing this commitment and in arranging and syndicating the
Senior Credit Facilities, NationsBank, DLJ and NMS are and will be using and
relying on the Information and the Projections (collectively, the
"PRE-COMMITMENT INFORMATION") without independent verification thereof.
By executing this Commitment Letter, you agree to reimburse NationsBank, DLJ and
NMS from time to time on demand for all reasonable out-of-pocket fees and
expenses (including, but not limited to, the reasonable fees, disbursements and
other charges of Shearman & Sterling, as counsel to the
<PAGE> 4
Co-Arrangers, and of special and local counsel to the Co-Arrangers) incurred in
connection with the Senior Credit Facilities, the syndication thereof, the
preparation of the definitive documentation therefor and the other transactions
contemplated hereby.
You agree to indemnify and hold harmless NationsBank, NMS, DLJ, each Lender and
each of their affiliates and their officers, directors, employees, agents,
advisors and other representatives (each an "INDEMNIFIED PARTY") from and
against (and will reimburse each Indemnified Party as the same are incurred for)
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, the reasonable fees, disbursements and other charges of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any investigation, litigation
or proceeding or preparation of a defense in connection therewith) (a) any
aspect of the Transaction or any similar transaction and any of the other
transactions contemplated thereby or (b) the Senior Credit Facilities and any
other financings, or any use made or proposed to be made with the proceeds
thereof, except to the extent such claim, damage, loss, liability or expense
results from such Indemnified Party's gross negligence or willful misconduct. In
the case of an investigation, litigation or proceeding to which the indemnity in
this paragraph applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by you, your equityholders or
creditors or an Indemnified Party or an Indemnified Party is otherwise a party
thereto and whether or not any aspect of the Transaction is consummated. You
also agree that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to you or your subsidiaries or
affiliates or to your or their respective security holders or creditors arising
out of, related to or in connection with any aspect of the Transaction, except
for direct, as opposed to consequential, damages that resulted from such
Indemnified Party's gross negligence or willful misconduct.
This Commitment Letter and the fee letter among you, NationsBank, DLJ and NMS of
even date herewith (the "FEE LETTER") and the contents hereof and thereof are
confidential and, except for the disclosure hereof or thereof on a confidential
basis to your accountants and attorneys retained in connection with the
Transaction, to the Company and its directors, officers, advisors and
representatives and to the proposed new management of the Company or as
otherwise required by law, may not be disclosed in whole or in part to any
person or entity without our prior written consent; provided, however, it is
understood and agreed that your may disclose this Commitment Letter (including
the Summary of Terms) but not the Fee Letter (a) on a confidential basis to the
board of directors and advisors of each of Holdings and the Company in
connection with their consideration of the Transaction, and (b) after your
acceptance of this Commitment Letter and the Fee Letter, in filings with the
Securities and Exchange Commission and other applicable regulatory authorities
and stock exchanges.
The provisions of the immediately preceding three paragraphs shall remain in
full force and effect regardless of whether any definitive documentation for the
Senior Credit Facilities shall be executed and delivered and notwithstanding the
termination of this Commitment Letter or any commitment or undertaking of
NationsBank, DLJ or NMS hereunder.
In connection with the services and transactions contemplated hereby, you agree
that NationsBank, DLJ and NMS are permitted to access, use and share with any of
their bank or non-bank affiliates, agents, advisors (legal or otherwise) or
representatives, any information concerning you, the Company or any of your or
its respective affiliates that is or may come into the possession of
NationsBank, DLJ, NMS or any of such affiliates. NationsBank, DLJ, NMS and their
affiliates will treat confidential information relating to you, the Company and
your and its respective affiliates with the same degree of care as they treat
their
<PAGE> 5
own confidential information.
This Commitment Letter may be executed in counterparts which, taken together,
shall constitute an original. Delivery of an executed counterpart of this
Commitment Letter or the Fee Letter by telecopier shall be effective as delivery
of a manually executed counterpart thereof.
This Commitment Letter and the Fee Letter shall be governed by, and construed in
accordance with, the laws of the State of New York. Each of you, NationsBank,
DLJ and NMS hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Commitment Letter (including, without
limitation, the Summary of Terms), the Fee Letter, the Transaction and the other
transactions contemplated hereby and thereby or the actions of NationsBank, DLJ
and NMS in the negotiation, performance or enforcement hereof. The commitments
and undertakings of NationsBank, DLJ and NMS may be terminated by us if you fail
to perform your obligations under this Commitment Letter or the Fee Letter on a
timely basis.
This Commitment Letter, together with the Summary of Terms and the Fee Letter,
embodies the entire agreement and understanding among NationsBank, DLJ, NMS,
you, Holdings and your and its affiliates with respect to the Senior Credit
Facilities and supersedes all prior agreements and understandings relating to
the specific matters hereof. However, please note that the terms and conditions
of the commitment of each of NationsBank and of DLJ and undertaking of NMS
hereunder are not limited to those set forth herein or in the Summary of Terms.
Those matters that are not covered or made clear herein or in the Summary of
Terms or the Fee Letter are subject to mutual agreement of the parties. No party
has been authorized by NationsBank or NMS or DLJ to make any oral or written
statements that are inconsistent with this Commitment Letter.
This letter is not assignable by you without our prior written consent and is
intended to be solely for the benefit of the parties hereto and the Indemnified
Parties.
This Commitment Letter and all commitments and undertakings of NationsBank, DLJ
and NMS hereunder will expire at 5:00 p.m. (New York City time) on February 15,
1999 unless you execute this Commitment Letter and the Fee Letter and return
them to us prior to that time. Thereafter, all commitments and undertakings of
NationsBank, DLJ and NMS hereunder will expire on the earliest of (a) April 16,
1999, unless the Closing Date occurs on or prior thereto, (b) the closing of the
Stock Tender Offer without the use of the Senior Credit Facilities and (c) the
acceptance by Holdings or any of its affiliates of an offer for all or any
substantial part of the capital stock or property and assets of Holdings and its
subsidiaries other than as part of the Transaction.
<PAGE> 6
We are pleased to have the opportunity to work with you on this important
financing.
Very truly yours,
NATIONSBANK, N.A.
By____________________________________
Title:
NATIONSBANC MONTGOMERY SECURITIES LLC
By___________________________________
Title:
DLJ CAPITAL FUNDING, INC.
By___________________________________
Title:
ACCEPTED AND AGREED TO
AS OF FEBRUARY __, 1999
RSA ACQUISITION CORP.
By_______________________________
Title:
<PAGE> 1
EXHIBIT 11(B)(2)
J.W. CHILDS EQUITY PARTNERS II, L.P.
ONE FEDERAL STREET, FLOOR 21
BOSTON, MA 02110
February 12, 1999
RSA Holdings Corp. of Delaware
One Federal Street
Boston, MA 02110
Ladies and Gentlemen:
RSA Acquisition Corp. ("Purchaser") has been organized by J.W. Childs
Equity Partners II, L.P. ("J.W. Childs") and RSA Holdings Corp. of Delaware
("Holding") to purchase all of the outstanding shares of common stock, par value
$0.01 per share, of American Safety Razor Company, a Delaware corporation (the
"Company"), pursuant to the terms of the Agreement and Plan of Merger dated as
of February 12, 1999 by and among Holding, Purchaser and the Company (the
"Merger Agreement"). Capitalized terms used and not otherwise defined herein
have the meanings ascribed to them in the Merger Agreement.
Subject to the satisfaction of all conditions precedent to Purchaser's
obligation to consummate the Offer and the Merger, we confirm that J.W. Childs
is pleased to commit to provide Holding with (i) a common stock investment in
cash of up to $90.0 million and (ii) an unsecured, pay-in-kind debt investment
in cash of up to $55.0 million, such investment to be made upon the closing of
the Tender Offer.
J.W. Childs will not be under any obligation pursuant to the preceding
paragraph unless and until all conditions precedent to Purchaser's obligation to
consummate the Tender Offer have been satisfied in accordance with the terms of
the Merger Agreement.
J.W. Childs will use its reasonable best efforts to cause Purchaser and
Holding to satisfy the conditions to the senior debt funding contemplated by the
NationsBank commitment letter in connection with the financing of the Offer and
the Merger. J.W. Childs will guarantee the due performance of any and all
obligations and liabilities of Purchaser and Holding pursuant to Sections
6.16(d)(iii) and 8.03(a) of the Merger Agreement.
This letter may be disclosed to the Company and its directors,
officers, representatives and advisors, to NationsBank and as required by
applicable law.
<PAGE> 2
2
Notwithstanding anything that may be expressed or implied in this
letter agreement, Holding, by its acceptance of the benefits hereof, covenants,
agrees and acknowledges that, no person other than J.W. Childs shall have any
obligation hereunder and that, notwithstanding that J.W. Childs is a
partnership, no recourse hereunder or any documents or instruments delivered in
connection herewith shall be had against any current or future officer, agent or
employee of J.W. Childs, against any current or future general or limited
partner of J.W. Childs or against any current or future director, officer,
employee, general or limited partner, member, affiliate or assignee of any of
the foregoing, whether by the enforcement of any assessment or by any legal or
equitable proceeding, or by virtue of any statute, regulation or other
applicable law, it being expressly agreed and acknowledged that no personal
liability whatsoever shall attach to, be imposed on or otherwise be incurred by
any current or future officer, agent or employee of J.W. Childs or any current
or future general or limited partner of J.W. Childs or any current or future
director, officer, employee, general or limited partner, member, affiliate or
assignee of any of the foregoing, as such for any obligations of J.W. Childs
under this letter agreement or any documents or instruments delivered in
connection herewith or for any claim based on, in respect of or by reason of
such obligations or their creation.
Very truly yours,
J.W. CHILDS EQUITY PARTNERS II, L.P.
By: J.W. Childs Advisors II, L.P.
its general partner
By: J.W. Childs Associates, L.P.
its general partner
By: J.W. Childs Associates, Inc.
its general partner
By: /s/ Adam Suttin
--------------------------------
Name: Adam Suttin
Title: Vice President
Agreed and Accepted this
12th day of February, 1999
RSA Holdings Corp. of Delaware
By: /s/ Adam Suttin
------------------------------------
Name: Adam Suttin
Title: President
<PAGE> 1
EXHIBIT 11(C)(1)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of February 12, 1999, by and
among RSA Holdings Corp. of Delaware, a Delaware corporation ("Parent"), RSA
Acquisition Corp., a Delaware corporation and a subsidiary of Parent (the
"Purchaser") and American Safety Razor Company, 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, in furtherance of such acquisition, Parent proposes to cause
the Purchaser to make a tender offer (as it may be amended from time to time as
permitted under this Agreement, the "Offer") to purchase all of the shares of
Common Stock, par value $0.01 per share, of the Company (the "Shares") at a
price per share of $14.125 net to the selling stockholders in cash (such price
as it may hereafter be increased, the "Share Offer Price") upon the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, pursuant to the Merger (as defined) Purchaser shall pay and
cash out all options outstanding on the date hereof issued and exercisable under
the Option Plan (as hereinafter defined) at a price per option net to the
selling stockholder in cash equal to the difference between the Share Offer
Price and the exercise price of such options under the Option Plan (the "Option
Offer Price");
WHEREAS, the Board of Directors of the Company (the "Board") has
approved the Offer and the Merger as fair and advisable to the Company's
stockholders and is recommending that the Company's stockholders accept the
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 be low (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 issued and
outstanding Share not owned directly or indirectly by Parent or the Company will
be converted into the right to receive the Share Offer Price applicable thereto
in cash;
WHEREAS, concurrently with the execution and delivery of the Merger
Agreement, Parent, certain shareholders of the Company and certain executive
officers of the Company, including but not limited to the partners, principals,
officers, employees and affiliates of The Jordan Company ("TJC") (the "Principal
Holders"), have entered into a Shareholders Agreement dated as of the date
hereof in the form of Exhibit A hereto (the "Shareholders Agreement", and,
together with the Confidentiality Agreement (as hereinafter defined), the
"Related Agreements");
<PAGE> 2
WHEREAS, Parent, the Purchaser and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the 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 OFFER
SECTION 1.01 The Offer.
(a) So long as this agreement shall not have been terminated in
accordance with Section 8.01 and none of the events set forth in Annex I hereto
(as hereinafter provided) shall have occurred or exist, the Purchaser shall, and
Parent shall cause the Purchaser to, commence (within the meaning of Rule
14d-2(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) as promptly as practicable after the date hereof, but in any event not
later than the fifth business day following the date hereof, the Offer for all
outstanding Shares at the Share Offer Price applicable to such Shares, net to
the seller in cash in accordance with this Agreement. The initial expiration
date for the Offer shall be the twentieth business day from and after the date
the Offer is commenced, including the date of commencement as the first business
day in accordance with Rule 14d-2 under the Exchange Act (the "Initial
Expiration Date"). As promptly as reasonably practicable, on the commencement
date of the Offer, the Parent and the Purchaser shall file with the Securities
and Exchange Commission (the "SEC"), with respect to the Offer, the Purchaser's
Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") (together with
any supplements or amendments thereto, the "Offer Documents"), which shall
contain (as an exhibit thereto) the Purchaser's Offer to Purchase (the "Offer to
Purchase") which shall be mailed to the holders of Shares with respect to the
Offer. The Company and its counsel shall be given an opportunity to review and
comment upon the Offer Documents and any amendment or supplement thereto prior
to the filing thereof with the SEC, and Parent and Purchaser shall consider such
comments in good faith. Parent and Purchaser agree to provide to the Company and
its counsel any comments which Parent, Purchaser or their counsel may receive
from the Staff of the SEC with respect to the Offer Documents promptly after
receipt thereof. The obligation of Parent to accept for payment or pay for any
Shares tendered pursuant to the Offer will be subject to the satisfaction or
waiver (to the extent permitted by this Agreement) of the conditions set forth
in Annex I hereto (the "Offer Conditions"). Without the prior written consent of
the Company, the Purchaser shall not decrease the price per Share or change the
form of consideration payable in the Offer, decrease the number of Shares sought
to be purchased in the Offer, change the conditions set forth in Annex I, waive
the Minimum Condition (as defined in Annex I), impose additional conditions to
the Offer, except as otherwise provided herein, extend the Initial Expiration
Date or amend any other term of the Offer in any
2
<PAGE> 3
manner adverse to the holders of any Shares. Subject to the terms of the Offer
and this Agreement and the satisfaction or waiver (to the extent permitted by
this Agreement) of all the conditions of the Offer set forth in Annex I hereto
as of the Initial Expiration Date or any expiration date permitted by the
Agreement, Parent 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. 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 Initial Expiration Date (or any
subsequently scheduled expiration date), Parent will extend the Offer from time
to time for the shortest time periods permitted by law and which it reasonably
believes are necessary until the consummation of the Offer; provided that
notwithstanding the satisfaction of the Offer Conditions the Parent and the
Purchaser shall have the right, after consultation with the Company, to extend
the Offer for up to 10 business days after the Initial Expiration Date,
notwithstanding the prior satisfaction of the Offer Conditions. 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 a 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 and warrants, that the Board, at a meeting duly called and held, has
(i) determined that the Offer and the Merger are fair and advisable to and in
the best interests of the Company and its stockholders, (ii) approved the Offer,
the Merger and the Shareholders Agreement in accordance with Section 203 of the
GCL, and (iii) resolved to recommend acceptance of the Offer and approval and
adoption of the Merger and this Agreement by the Company's stockholders (in
accordance with the requirements of the Company's certificate of incorporation
and of applicable law); provided, however, that prior to consummation of the
Offer such recommendation and approval may be withdrawn, modified or amended if
the Board by majority vote shall have determined in good faith, based upon the
3
<PAGE> 4
advice of outside legal counsel to the Company, that such determination to
withdraw, modify or amend would be necessary in order to comply with the Board's
fiduciary duty under applicable law. The Company hereby further represents and
warrants that PaineWebber, Incorporated (the "Financial Advisor") has delivered
to the Board its written opinion that the consideration to be received by the
holders of the Shares pursuant to each of the Offer and the Merger is fair to
such holders from a financial point of view. The Company has been authorized by
the Financial Advisor to permit, subject to prior review and consent by such
Financial Advisor (such consent not to be unreasonably withheld), the inclusion
of such fairness opinion (or a reference thereto) in the Offer Documents and in
the Schedule 14D-9 referred to below and the Proxy Statement. The Company hereby
consents to the inclusion in the Offer Documents of the recommendations of the
Board described in this Section 1.02(a).
(b) The Schedule 14D-9 and all amendments thereto will comply in all
material respects with the Exchange Act and the rules and regulations
promulgated thereunder 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 the Company with respect to information
supplied by the Parent or Purchaser for inclusion in the Schedule 14D-9. 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 stockholders of the Company, in each case as and to the
extent required by applicable federal securities law.
(c) Parent and its counsel shall be given an opportunity to review and
comment upon the Schedule 14D-9 and any amendment or supplement thereto prior to
the filing thereof with the SEC, and the Company shall consider any such
comments in good faith. The Company agrees to provide to Parent and their
counsel any comments which the Company or its counsel may receive from the Staff
of the SEC with respect to the Schedule 14D-9 promptly after receipt thereof. In
connection with the Offer, the Company will, if reasonably requested by
Purchaser, promptly furnish Purchaser with mailing labels, security position
listings, any non-objecting beneficial owner lists and any available listings or
computer files containing the names and addresses of the record holders of
Shares, each as of a recent date, and shall promptly furnish the Purchaser with
such additional information (including but not limited to updated lists of
stockholders, mailing labels, security position listing and non-objective
beneficial owner lists) 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.
4
<PAGE> 5
SECTION 1.03 Directors.
(a) Subject to compliance with applicable law, promptly upon the
payment by the Purchaser for Shares pursuant to the 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 Common Shares then
outstanding, and the Company shall, 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 or increasing the size of the
Board; provided, however, that prior to the Effective Time (as defined in
Section 2.02), 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"). At such times, the Company will use
its reasonable best efforts to cause persons designated by Purchaser to
constitute the same percentage as is on the Board of (i) each committee of the
Board, (ii) each board of directors of each subsidiary of the Company and (iii)
each committee of each such board, in each case only to the extent permitted by
law. 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) 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) From and after 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.
5
<PAGE> 6
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 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 Parent's election, any direct or indirect subsidiary of Parent
other than Purchaser may he merged with and into the Company instead of the
Purchaser. In the event of such an election, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect such an election.
SECTION 2.02 Effective Time; Closing. As soon as practicable after the
satisfaction or waiver of the conditions set forth in Sections 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 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 6.01 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 thereafter amended in accordance with the
provisions thereof and hereof 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
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; provided that,
promptly upon the payment by the Purchaser for Shares pursuant to
6
<PAGE> 7
the Offer, any partners, officers or affiliates of TJC who are also officers of
the Company immediately prior to the Effective Time shall resign as officers of
the Company.
SECTION 2.07 Conversion of Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of the holders thereof, each Share
issued and outstanding immediately prior to the Effective Time (other than any
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 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 Share Offer Price applicable thereto (the "Merger
Price") payable to the holder thereof, and in the case of the Options, net of
taxes required by law to be withheld with respect thereto and without interest
thereon, upon surrender of the certificate formerly representing such Share.
SECTION 2.08 Conversion of Purchaser Common Stock. At the Effective
Time, each share of common stock, par value $0.01 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 nonassessable share
of common stock, par value $0.01 per share, of the Surviving Corporation.
SECTION 2.09 Company Option Plan. Parent and the Company shall take all
actions necessary so that, immediately prior to the Effective Time, (A) each
outstanding option to purchase Common Shares (an "Option") granted under the
American Safety Razor Company Stock Option Plan (the "Option Plan"), whether or
not then exercisable or vested, shall become fully exercisable and vested, (B)
each Option which is then outstanding shall be cancelled and (C) in
consideration of such cancellation, and except to the extent that Parent or the
Purchaser and the holder of any such Option otherwise agree, immediately
following the Effective Time, the Company shall pay to such holders of Options
an amount in respect thereof equal to the product of (1) the excess of the
Merger Price over the exercise price thereof and (2) the number of Common Shares
subject thereto (such payment to be net of taxes required by law to be withheld
with respect thereto). The Company shall use its reasonable best efforts to take
all such action as is necessary prior to the Effective Time to terminate the
Option Plan so that on and after the Effective Time no current or former
employee or director shall have any Option to purchase shares of common stock or
any other equity interest in the Company under the Option Plan. The Company
shall use its reasonable best efforts to obtain any consents as may be necessary
to release the Company from any liability in respect of any Options.
SECTION 2.10 Stockholders' Meeting.
(a) If required by the Company's certificate of incorporation and/or
applicable law in order to consummate the Merger, the Company, acting through
the Board, shall, in accordance with applicable law:
7
<PAGE> 8
(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
Shares by the Purchaser pursuant to the Offer for the purpose of
considering and taking action upon this Agreement;
(ii) prepare and file with and to use its reasonable best
efforts to have cleared by the SEC a preliminary proxy statement
relating to the Merger and this Agreement and use its reasonable 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 determined in good faith by a majority of the Board
based on the advice of independent outside legal counsel, (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 and the written opinion of the
Financial Advisor that the consideration to be received by the
stockholders of the Company pursuant to the Offer and the Merger is
fair to such stockholders and (B) use its reasonable best efforts to
obtain the necessary adoption of this Agreement.
(b) Parent agrees that it will vote, or cause to be voted, all of the
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 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 Shares by the Purchaser pursuant to the Offer without a meeting of
stockholders of the Company, in accordance with Section 253 of the GCL.
SECTION 2.12 Fractional Shares and Payments. In the event that the
aggregate consideration to be received by a holder of Shares pursuant to the
Offer or the Merger for such holders Shares equals, when aggregated, an amount
that includes one-half of one cent, then such amount will be rounded up to the
nearest whole cent.
8
<PAGE> 9
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES AND WARRANTS
SECTION 3.01 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, 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 demands in writing appraisal for such Shares in
accordance with Section 262 of the GCL, 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 the Merger Price as provided in Section
2.07 but shall be entitled to receive the consideration as shall be determined
pursuant to Section 262 of GCL, 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 Shares, withdrawals of such demands and
any other instruments served pursuant to the GCL and received by the Company
and, prior to the Effective Time, Parent shall have the right to direct 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.
SECTION 3.02 Payment for Shares.
(a) From and after the Effective Time, a bank or trust company
designated by Parent and reasonably acceptable to the Company shall act as
paying agent (the "Paying Agent") in effecting the payment of the Merger Price
in respect of certificates (the "Share Certificates") that, prior to the
Effective Time, represented Shares entitled to payment of the Merger Price
pursuant to Section 2.07. When and as needed, Parent or the Purchaser shall
deposit, or cause to be deposited, in trust with the Paying Agent the aggregate
Merger Price to which holder of 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 Shares (other than Share Certificates representing Dissenting Shares
and Certificates representing 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) (i) 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 which shall be in such form and have such
other provisions as Parent and Purchaser may reasonably specify and (ii)
instructions for use in surrendering such Certificates and receiving the
aggregate Merger Price in respect thereof. Upon surrender of each such
Certificate together with such letter of transmittal duly completed and validly
executed in accordance with the instructions thereto, the
9
<PAGE> 10
Paying Agent shall pay the holder of such Certificate the Merger Price
multiplied by the number of Shares formerly represented by such Certificate in
consideration therefor, and such Certificate shall forthwith be cancelled. Until
so surrendered, each such Certificate (other than Share Certificates
representing Dissenting Shares and Certificates representing 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 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, with signature guaranteed, or otherwise be in proper form for transfer
and that the person surrendering such Certificates shall pay to the Paying Agent
any transfer or other taxes required by reason of the payment of the Merger
Price, to a 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 270 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 Share shall
thereafter look only to the Surviving Corporation (as a general creditor
thereof) for payment of its claim for the Merger Price (without any interest or
dividends thereon).
(d) No Liability. None of Parent, Purchaser, the Company or the Paying
Agent shall be liable to any person in respect of any cash delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any Certificates representing Shares shall not have been surrendered prior to
one year after the Effective Time (or immediately prior to such earlier date on
which any Merger Price would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 4.05(b)), any such Merger Price
shall, to the extent permitted by applicable law, become the property of the
Surviving Corporation, free and clear of all claims or interest of any person
previously entitled thereto.
(e) Investment in Exchange Fund. The Paying Agent shall invest the
Merger Price as directed by the Surviving Corporation (within guidelines
approved by the Company prior to the Closing Date, which approval shall not be
unreasonably withheld). Any interest resulting from such investment shall be
paid to the Surviving Corporation.
(f) After the Effective Time, there shall be no registrations of
transfers on the stock transfer books of the Surviving Corporation of any Shares
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates formerly representing 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.
10
<PAGE> 11
(g) No Further Ownership Rights in Shares Exchanged For Cash. All cash
paid upon the surrender for exchange of Certificates representing Shares in
accordance with the terms of this Article III shall be deemed to have been
issued (and paid) in full satisfaction of all rights pertaining to the Shares
exchanged for cash theretofore represented by such Certificates in accordance
with the GCL.
(h) Lost Certificates. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if reasonably
required by the Surviving Corporation, the posting by such person of a bond in
such reasonable and customary amount as the Surviving Corporation may direct as
indemnity against any claim that may be made against it with respect to the
Certificate, the Paying Agent shall deliver in exchange for such lost, stolen or
destroyed Certificate the applicable Merger Price with respect thereto.
(i) Withholding Rights. In the case of the Options, the Surviving
Corporation shall be entitled to deduct and withhold from the consideration
otherwise payable to any holder of Shares pursuant to this Agreement such
amounts as may be required to be deducted and withheld with respect to the
making of such payment under the Internal Revenue Code of 1986, as amended (the
"Code"), or under any provision of state, local or foreign Tax law.
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's Form 10-K for the year ended December 31,
1997 and the Company's Form 10-Qs for each of the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998 (collectively, the "Recent SEC Reports")
filed with the SEC and except as set forth in the Company Disclosure Statement
delivered to Parent and Purchaser prior to the execution of this Agreement (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 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
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 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 reasonably
be expected to have a Material Adverse Effect on the Company. The term "Material
Adverse Effect on the Company" as used in this Agreement, means any change or
effect that would be materially adverse to the
11
<PAGE> 12
assets, liabilities, business, operations or financial condition of the Company
and its subsidiaries, taken as a whole, except for any such change or effect
resulting from general economic, financial or market conditions in the United
States.
SECTION 4.02 Certificate of Incorporation and By-Laws. The Company has
heretofore made available to Parent and the Purchaser a complete and correct
copy of the certificate of incorporation and the by-laws, each as amended to the
date hereof, of the Company and its subsidiaries. Such articles of incorporation
and by-laws are in full force and effect and no other organizational documents
are applicable to or binding upon the Company or any of its subsidiaries.
Neither the Company nor any of its subsidiaries is in violation in any material
respect of any of the provisions of its certificate of incorporation or by-laws.
SECTION 4.03 Capitalization. The authorized capital stock of the
Company consists of 25,000,000 Common Shares, 2,900,000 shares of Class B Common
Stock, par value $0.01 per share (the "Class B Common Stock") of the Company,
and 1,000,000 shares of Preferred Stock, par value $0.01 per share (the
"Preferred Stock"), of the Company. As of the date of this Agreement, the
Company had 12,110,049 Common Shares outstanding and no shares of Class B Common
Stock and no shares of Preferred Stock issued or outstanding. The Company has no
shares of capital stock reserved for issuance, except that, as of the date of
this Agreement, there were 750,000 Common Shares reserved for issuance pursuant
to the Option Plan (of which Options to purchase 464,400 Common Shares are
outstanding). The Company Disclosure Statement sets forth the identity of each
holder of Options, and the number of shares of Common Stock and the exercise
price with respect thereto. 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 and free of
preemptive (or similar) rights. 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 and except pursuant to the Option
Plan and except for the transactions contemplated by this Agreement, there are
no existing options, warrants, calls, subscriptions or other rights, agreements,
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 or
obligations of the Company or any of its subsidiaries to grant, extend or enter
into any such option, warrant, call, subscription or other right, agreement,
arrangement or commitment. Except (i) as contemplated by this Agreement and (ii)
the Company's obligations under the Option Plan, 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 or to provide funds to or make any investment
(in the form of a loan, capital contribution or otherwise) in any such
subsidiary or any other entity. 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 all such shares of the Company's
12
<PAGE> 13
subsidiaries are owned by the Company or by another wholly owned subsidiary of
the Company and 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 reasonably be
expected to have a Material Adverse Effect on the Company. The Company has
delivered to Parent prior to the date hereof a list of all subsidiaries and
associated entities of the Company which evidences, among other things, the
amount of capital stock or other equity interests owned by the Company, directly
or indirectly, in such subsidiaries or associated entities. No entity in which
the Company owns, directly or indirectly, less than a 50% equity interest is,
individually or when taken together with all such other entities, material to
the business of the Company and its subsidiaries taken as a whole.
SECTION 4.04 Authority Relative to this Agreement; Minimum Condition.
(a) 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
holders of the Shares to the extent required by the Company's certificate of
incorporation and by applicable law and the filing of appropriate merger
documents as required by the GCL). 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, 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.
(b) Pursuant to GCL and the Company's Certificate of Incorporation and
By-Laws, the Shares purchased in satisfaction of the Minimum Condition are
sufficient to provide the stockholder vote required to consummate the Merger in
accordance with the Company's Certificate of Incorporation and By-Laws and
Section 251 of the GCL.
SECTION 4.05 No Conflict; Required Filings and Consents.
(a) None of the execution, delivery of and performance 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 its
subsidiaries, (ii) conflict with or violate any law, regulation or order of any
governmental authority applicable to the Company or any of 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, (any of the foregoing referred to in clause (ii) or this
13
<PAGE> 14
clause (iii) being a "Violation") pursuant to, any loan and credit agreement,
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 (x) in the
case of clause (iii), with regard to the Company's Credit Agreement (as
hereinafter defined) and other indebtedness of the Company set forth in the
Company Disclosure Statement, and (y) in the case of the foregoing clause (ii)
or (iii) for any such Violations which would not reasonably be expected to have
a Material Adverse Effect on the Company or materially adversely affect the
ability of the Company to perform its obligations and consummate the
transactions contemplated hereby.
(b) None of the execution, delivery and performance 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, or any administrative,
governmental or regulatory authority, agency, court, 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 of ownership
and merger, pursuant to the GCL, (iii) applicable state takeover and
environmental statutes listed on the Company Disclosure Statement, (iv)
compliance with the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as
amended (the "HSR Act") and any requirements of any foreign or supranational
Anti-Trust Laws (as hereinafter defined) and (v) Consents the failure of which
to obtain or make would not reasonably be expected to have a Material Adverse
Effect on the Company or materially adversely effect the ability of the Company
to consummate the transactions contemplated hereby.
SECTION 4.06 SEC Reports and Financial Statements.
(a) The Company has filed with the SEC all forms, reports, schedules,
registration statements and definitive proxy statements (the "SEC Reports")
required to be filed with the SEC since June 9, 1993. 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, as amended, 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 (including but not limited to any
financial statements or schedules included or incorporated by reference therein)
contained when filed, or (except to the extent revised or superseded by a
subsequent filing with the SEC) contains any untrue statement of a material fact
or omitted or omits 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 December 31, 1997 and 1996
and the related consolidated statements of income, common shareholders' equity
and cash flows for each of the three years in the period ended December 31, 1997
(including the related notes and schedules
14
<PAGE> 15
thereto) of the Company contained in the Company's Form 10-K for the year ended
December 31, 1997 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 September 30, 1998,
June 30, 1998 and March 31, 1998 included in the SEC Reports (collectively, the
"Quarterly Financial Statements") have been prepared in accordance with the
requirements for interim financial statements contained in Regulation S-X. The
Quarterly Financial Statements present fairly, in all material respects, the
consolidated financial position and consolidated results of operations and cash
flows of the Company and its consolidated subsidiaries as of the dates and for
the periods presented therein in conformity with GAAP applied on a consistent
basis during the periods involved, except as otherwise noted therein, including
the related notes, provided, that the Quarterly Financial Statements do not
reflect full year end adjustments, accruals, reserves and footnotes.
(d) There are no liabilities of the Company or any of its subsidiaries
of any kind whatsoever, whether or not accrued and whether or not contingent or
absolute, that are material to the Company and its subsidiaries, taken as a
whole, other than (i) liabilities disclosed or provided for in the consolidated
balance sheet of the Company and its subsidiaries at December 31, 1997,
including the notes thereto, (ii) liabilities disclosed in the Recent SEC
Reports, (iii) liabilities incurred on behalf of the Company in connection with
this Agreement and the contemplated Merger, (iv) liabilities incurred in the
ordinary course of business consistent with past practice since September 30,
1998, and (v) other liabilities, none of which (without giving effect to the
materiality qualifier contained in this Section 4.06(d)) would reasonably be
expected to have a Material Adverse Effect.
(e) The Company has heretofore furnished or made available to Parent a
complete and correct copy of any amendments or modifications which have not yet
been filed with the SEC to agreements, documents or other instruments which
previously had been filed by the Company with the SEC pursuant to the Securities
Act and the rules and regulations promulgated thereunder or the Exchange Act and
the rules and regulations promulgated thereunder.
SECTION 4.07 Information. Neither the Schedule 14D-9, the Proxy
Statement, nor any of the information supplied by the Company in writing
specifically for inclusion or incorporation by reference in (i) the Offer
Documents, or (ii) any other document to be filed with the SEC or any other
Governmental Entity in connection with the transactions contemplated by this
agreement and any amendment or supplement to any of the above (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,
15
<PAGE> 16
at the time of the Special Meeting (as herein defined) 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. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information supplied by Parent or
Purchaser or any of their respective representatives which is contained in the
Schedule 14D-9 or the Proxy Statement. 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 Litigation. The Company Disclosure Statement sets forth
each instance in which any of the Company and its subsidiaries or any of their
respective properties (a) is subject to any judgment, order, decree,
stipulation, injunction, or charge or (b) is a party to or the subject of any
material charge, complaint, action, suit, proceeding, hearing, or investigation
of or in any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction, or to the Knowledge of the Company, is
threatened to be a party to or the subject of any such action, except, in each
case, where the judgment, order, decree, stipulation, injunction, charge,
complaint, action, suit, proceeding, hearing, or investigation would not
reasonably be expected to have a Material Adverse Effect on the Company or
unreasonably delay or prevent the consummation of the transactions contemplated
hereby.
SECTION 4.09 Compliance with Applicable Laws. Neither the Company nor
any of its subsidiaries is in conflict with or in default or violation of (i)
any laws, regulations, rules, orders, judgment or decree of any Governmental
Entity applicable to it, such subsidiaries or any of their respective properties
or (ii) 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 its or any of their respective properties are bound or
affected, except for any such conflicts, defaults or violations which would not
reasonably be expected to have a Material Adverse Effect on the Company. The
Company and its subsidiaries have all permits, licenses, authorizations,
consents, approvals and franchises from governmental agencies required to
conduct their businesses as now being conducted, except for such permits,
licenses, authorizations, consents, approvals, and franchises the absence of
which would not reasonably be expected to have a Material Adverse Effect on the
Company. The business operations of the Company and its subsidiaries are not
being conducted in violation of any law, ordinance or regulation of any
Governmental Entity, except for possible violations which, would not reasonably
be expected to have a Material Adverse Effect on the Company.
SECTION 4.10 Employee Benefit Plans.
(a) The Company Disclosure Statement includes a complete list of all
employee benefit plans (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of
16
<PAGE> 17
1974, as amended ("ERISA"), including, without limitation, multiemployer plans
within the meaning of ERISA Section 3(37)), stock purchase, stock option,
severance, employment, change-in-control, fringe benefit, collective bargaining,
bonus, incentive, deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements, whether or not subject to
ERISA (including any funding mechanism therefor now in effect or required in the
future as a result of the transaction contemplated by this Agreement or
otherwise), providing benefits to any employee or former employee of the Company
and its subsidiaries sponsored or maintained by the Company or any of its
subsidiaries or to which the Company or any of its subsidiaries contributes or
is obligated to contribute (collectively, the "Plans").
(b) With respect to each Plan, the Company has made available to Parent
a true, correct and complete copy of: (i) all material plan documents, benefit
schedules, trust agreements, and insurance contracts and other funding vehicles;
(ii) the three most recent Annual Reports (Form 5500 Series) and accompanying
schedules, if any; (iii) the current summary plan description, if any; (iv) the
three most recent annual financial reports, if any; (v) the three most recent
actuarial reports, if any; and (vi) the most recent determination letter from
the Internal Revenue Service (the "IRS"), if any.
(c) As to each single employer Plan, the Company and each of its
subsidiaries has complied, and is now in compliance, with all provisions of
ERISA, the Code and all laws and regulations applicable to each Plan, except
where the failure to comply would not reasonably be expected to have a Material
Adverse Effect. With respect to each Plan that is intended to be a "qualified
plan" within the meaning of Section 401(a) of the Code ("Qualified Plans"), the
Company has obtained (or has timely applied for), and the IRS has issued, a
favorable determination letter and each such Plan is qualified except where the
failure to be so qualified would not reasonably be expected to have a Material
Adverse Effect on the Company.
(d) All contributions required to be made to any Plan by applicable law
or regulation or by any Plan document or other contractual undertaking, and all
premiums due or payable with respect to insurance policies funding any Plan, for
any period through the date hereof have been timely made or paid in full or, to
the extent not required to be made or paid on or before the date hereof, have
been fully reflected in the financial statements of the Company included in the
SEC Reports to the extent required under generally accepted accounting
principles, except such as would not reasonably be expected to have a Material
Adverse Effect on the Company.
(e) No Plan is subject to Title IV or Section 302 of ERISA or Section
412 or 4971 of the Code. No event has occurred, nor do any circumstances exist
that could result in, any liability under (i) Title IV of ERISA, (ii) Section
302 of ERISA, (iii) Sections 412 and 4971 of the Code, or (iv) the continuation
coverage requirements of section 601 et seq. of ERISA and Section 4980B of the
Code except, in each case, as would not reasonably be expected to have a
Material Adverse Effect on the Company.
(f) With respect to any multiemployer plan (within the meaning of ERISA
Section 4001(a)(3)) to which the Company, its subsidiaries or any member of
their Controlled Group
17
<PAGE> 18
(defined as any organization which is a member of a controlled group of
organizations within the meaning of Code Section 414(b), (c), (m) or (o)) has
any liability or contributes (or has at any time within the six year period
prior to the date hereof, contributed or had an obligation to contribute): (i)
none of the Company, its subsidiaries or any member of their Controlled Group
has incurred any withdrawal liability under Title IV of ERISA; and, (ii) no such
multiemployer plan is in reorganization or insolvent (as those terms are defined
in ERISA Sections 4241 and 4245, respectively) except in each case as would not
reasonably be expected to have a Material Adverse Effect on the Company.
(g) With respect to any Plan, no actions, suits or claims (other than
routine claims for benefits in the ordinary course) are pending or, to the
Knowledge of the Company, threatened against the Company or any of its
subsidiaries, which, if adversely determined, would reasonably be expected to
have a Material Adverse Effect on the Company.
(h) No Plan (other than the Option Plan) exists that could result in
the payment to any present or former employee of the Company or its subsidiaries
of any money or other property or accelerate or provide any other rights or
benefits to any present or former employee of the Company or its subsidiaries as
a result of the transaction contemplated by this Agreement, whether or not such
payment would constitute a parachute payment within the meaning of Code Section
280G.
SECTION 4.11 Taxes.
(a) The Company has timely filed (or caused to be timely filed) all
Federal, state, local and foreign income and other tax returns regarding the
Company or its subsidiaries required by law to be filed prior to the date of
this Agreement, (b) such tax returns are correct and complete in all respects,
(c) the Company and its subsidiaries have paid all Federal, state, local or
foreign income and other taxes that are due and payable (including any interest,
penalties or additions to tax that are due with respect thereto) other than
taxes that are being contested in good faith and which have been reserved for in
accordance with GAAP, (d) no tax return of the Company or its subsidiaries is
currently under audit by any taxing authority and no deficiency in the payment
of any taxes by the Company or any subsidiary has been assessed, asserted or, to
the Knowledge of the Company, threatened against the Company or any subsidiary
that remains unsettled as of the date of this Agreement, (e) there are currently
no outstanding waivers of statutes of limitations with any taxing authority by
the Company or the subsidiaries, and (f) the Company has not at any time filed a
consolidated or combined Tax Return as a member of an affiliated group (within
the meaning of Section 1504 of the Code) other than as a group of which the
Company was the parent, except, in the case of clauses (a) through (f), where
any such failure or breach would not reasonably be expected to have a Material
Adverse Effect.
SECTION 4.12 Intellectual Property.
(a) The Company, directly or indirectly, owns, or is licensed or
otherwise possesses legally enforceable rights to use, all patents, trademarks,
trade names, service marks, copyrights,
18
<PAGE> 19
and any applications therefor, technology, know-how and tangible or intangible
proprietary information or material that are material to the business of the
Company and its subsidiaries as currently conducted by the Company or its
subsidiaries (the "Company Intellectual Property Rights").
(b) Either the Company or one of its subsidiaries is the sole and
exclusive owner of, or the exclusive or non-exclusive licensee of, with all
right, title and interest in and to (free and clear of any liens or
encumbrances), the Company Intellectual Property Rights, and, in the case of
Company Intellectual Property Rights owned by the Company or any of its
subsidiaries, has sole and exclusive rights (and is not contractually obligated
to pay any compensation to any third party in respect thereof) to the use
thereof or the material covered thereby in connection with the services or
products in respect of which the Company Intellectual Property Rights are being
used. No claims with respect to the Company Intellectual Property Rights have
been asserted or, to the Knowledge of the Company, are threatened by any person
that if adversely determined would reasonably be expected to have a Material
Adverse Effect on the Company (i) to the effect that the manufacture, sale,
licensing, or use of any of the products of the Company or any of its
subsidiaries as now manufactured, sold or licensed or used or proposed for
manufacture, use, sale or licensing by the Company or any of its subsidiaries
infringes on any copyright, patent, trade mark, service mark or trade secret,
(ii) against the use by the Company or any of its subsidiaries of any
trademarks, service marks, trade names, trade secrets, copyrights, patents,
technology or know-how and applications used in the business of the Company and
its subsidiaries are currently conducted, or (iii) challenging the ownership by
the Company or any of its subsidiaries or the validity of any of the Company
Intellectual Property Rights. All registered trademarks, service marks and
copyrights held by the Company are valid and subsisting, except to the extent
any failure does not constitute a Material Adverse Effect on the Company. To the
Knowledge of the Company, there is no unauthorized use, infringement or
misappropriation of any of the Company Intellectual Property Rights by any third
party, including any employee or former employee of the Company or any of its
subsidiaries, which would have Material Adverse Effect on the Company. No
Company Intellectual Property Rights or product of the Company or any of its
subsidiaries is subject to any outstanding decree, order, judgment, or
stipulation restricting in any manner the licensing thereof by the Company or
any of its subsidiaries, except to the extent any such restriction would not
reasonably be expected to have a Material Adverse Effect on the Company. Neither
the Company nor any of its subsidiaries has entered into any agreement (other
than exclusive distribution agreements) under which the Company or its
subsidiaries is restricted from selling, licensing or otherwise distributing any
of its products to any class of customers, in any geographic area, during any
period of time or in any segment of the market, except to the extent any such
restriction would not reasonably be expected to have a Material Adverse Effect
on the Company.
SECTION 4.13 Environmental Matters. Except as would not reasonably be
expected to have a Material Adverse Effect on the Company, (i) the Company and
its subsidiaries are, and have been, in compliance with Environmental Law, (ii)
to the Knowledge of the Company, there has been no release of Hazardous
Substances at, about or under any real property currently or formerly owned or
operated by the Company or any current or former subsidiary thereof, (iii) no
19
<PAGE> 20
judicial or administrative proceeding is pending or to the Knowledge of the
Company threatened relating to violation of or liability under or relating to
any Environmental Law, including without limitation violations or liabilities
relating to any off-site disposal or contamination, (iv) the Company and its
subsidiaries have not received in writing any claims or notices alleging any
violation of or liability under or relating to any Environmental Law, and (v)
none of the Company and its subsidiaries has entered into, has agreed to, or is
subject to any settlement judgment, decree, order or other similar obligation
under or relating to any Environmental Law. "Environmental Law" means any and
all applicable foreign, Federal, state or local law (including, without
limitation, common law), statute, regulation, order, decree or judicial opinion
or other governmental requirement having the force and effect of law and
relating to the use, storage, handling or disposal of Hazardous Substances or
the protection of the environment. "Hazardous Substance" means any toxic or
hazardous material or substance that is regulated by or under authority of any
Environmental Law or that could result in liability under Environmental Law,
including without limitation, any petroleum products, asbestos and
polychlorinated biphenyls.
SECTION 4.14 Material Adverse Change. Since September 30, 1998, except
as contemplated by this Agreement, the Company and its subsidiaries, taken as a
whole, have conducted their businesses only in the ordinary course and in a
manner consistent with past practice and, since such date, there has not been:
(i) any change in the assets, liabilities, results of operation, financial
condition or business of the Company or any of its subsidiaries that would
reasonably be expected to have a Material Adverse Effect on the Company; (ii)
any condition, event or occurrence which would reasonably be expected to have a
Material Adverse Effect on the Company; or (iii) any other action which, if it
had been taken after the date hereof, would have required the consent of Parent
under Section 6.01.
SECTION 4.15 Certain Approvals; Take-Over Laws. The Board has taken
appropriate action such that, assuming the accuracy of Parent's representation
in Section 5.06 of this Agreement, the provisions of Section 203 of the GCL will
not apply to any of the transactions contemplated by this Agreement or the
Shareholders Agreement. Other than Section 203 of the GCL, no foreign or state
takeover law is applicable to the transactions contemplated by this Agreement,
including the Offer and the Merger.
SECTION 4.16 Opinion of Financial Advisor. The Company has received the
written opinion of PaineWebber, Incorporated ("PaineWebber") to the effect that
the Share Offer Price to be received by holders pursuant to each of the Offer
and the Merger is fair to the holders of the applicable Shares from a financial
point of view.
SECTION 4.17 Brokers. Except for the engagement of PaineWebber and TJC
Management Corp., none of the Company, any of its subsidiaries, or any of their
respective officers, directors or employees has employed any broker or finder or
incurred any liability for any brokerage fees, commissions or finder's fees in
connection with the transactions contemplated by this Agreement. True and
correct copies of the Company's agreements with
20
<PAGE> 21
PaineWebber and TJC Management Corp. have been provided to Parent prior to the
date of this Agreement.
SECTION 4.18 Insurance. The Company Disclosure Statement contains an
accurate and complete list as of the date of this Agreement of all material
policies of fire, liability, workmen's compensation and other forms of insurance
owned by the Company or its subsidiaries.
SECTION 4.19 Real Estate Matters. (a) The Company or its subsidiaries
has good, valid, and, in the case of Owned Properties (as defined below),
marketable fee title to: (i) all of the material real property and interests in
real property owned by the Company or its subsidiaries, except for properties
sold or otherwise disposed of in the ordinary course of business (the "Owned
Properties"), and (ii) all of the material leasehold estates in all real
properties leased by the Company or its subsidiaries, except leasehold interests
terminated in the ordinary course of business (the "Leased Properties"; the
Owned Properties and Leased Properties being sometimes referred to herein as the
"Real Properties"), in each case free and clear of all mortgages, liens,
security interests, easements, covenants, rights-of-way, subleases and other
similar restrictions and encumbrances ("Encumbrances"); except for (i) liens for
current property taxes and assessments or other governmental charges or levies
not yet due and payable or the validity of which is being contested in good
faith in appropriate proceedings; (ii) liens for mechanics, materialmen,
laborer, warehousemen, carriers and other similar common law or statutory liens
arising in the ordinary course of business which are not yet due and payable;
(iii) zoning, entitlement and other land use and environmental regulations by
governmental agencies provided that such regulations have not been violated;
(iv) Encumbrances which would not reasonably be expected to have a Material
Adverse Effect on the Company; and (v) Encumbrances under the Credit Agreement
(collectively the "Permitted Encumbrances").
(b) Except to the extent that the inaccuracy of any of the following
would not reasonably be expected to have a Material Adverse Effect: (i) each of
the agreements by which the Company has obtained a leasehold interest in each
Leased Property (individually, a "Lease" and collectively, the "Leases") is in
full force and effect in accordance with its respective terms and the Company or
its subsidiary is the holder of the lessee's or tenant's interest thereunder;
(ii) there exists no default by the Company or any of its subsidiaries and, to
the Knowledge of the Company, there exists no default by a landlord or third
party under any Lease and no circumstance exists which, with the giving of
notice, the passage of time or both, is reasonably likely to result in such a
default; (iii) there are no leases, subleases, licenses, concessions or any
other contracts or agreements granting to any person or entity other than the
Company or any of its subsidiaries any right to the possession, use, occupancy
or enjoyment of any Real Property or any portion thereof; and (iv) the current
operations and use of the Real Properties do not violate any statute, law,
regulation, rule, ordinance, permit, requirement, order or decree now in effect.
(c) Except as set forth in the Company Disclosure Statement, neither
the Company nor any of its subsidiaries is obligated under or bound by any
option, right of first refusal, purchase contract, or other contractual right to
sell or dispose of any Owned Property or any portions
21
<PAGE> 22
thereof or interests therein which property, portions and interests,
individually or in the aggregate, are material to the Company and its
subsidiaries.
SECTION 4.20 Labor Matters; Compliance. Neither the Company nor any of
its subsidiaries is a party to any agreement pursuant to which a labor
organization is certified under applicable labor law as a bargaining agent for
any of the Company's or any of its subsidiaries' employees, and no such
agreement is being negotiated. There are no representation or certification
proceedings, petitions seeking a representation proceeding, strikes or
organizing activities pending or, to the Knowledge of the Company, threatened to
be brought or filed with the National Labor Relations Board or any other labor
relations tribunal or authority (domestic or foreign); except for such
proceedings, petitions, activities or strikes that would not have a Material
Adverse Effect on the Company.
SECTION 4.21 Disclaimer of Other Representations and Warranties;
Disclosure.
(a) The Company does not make, and has not made, any representations or
warranties relating to the Company or any subsidiaries in connection with the
transactions contemplated hereby other than those expressly set forth in this
Article IV. It is understood that Purchaser has fully reviewed the SEC Reports,
Company Disclosure Statement, the materials referenced therein and in the "data
room" relating to the transactions contemplated by this Agreement. It is also
understood that any cost estimates, projections or other productions, any data,
any financial information or any memoranda or presentations are not and shall
not be deemed to be or to include representations or warranties of the Company,
except to the extent otherwise expressly covered by the representations and
warranties the Company hereunder. No person has been authorized by the Company
to make any representation or warranty relating to the Company or any
subsidiary, the businesses of the Company or any subsidiary or otherwise in
connection with the transactions contemplated hereby except as set forth in this
Article IV and, if made, such representation or warranty must not be relied upon
as having been authorized by the Company or any subsidiary of the Company.
(b) Notwithstanding anything to the contrary contained in this
Agreement or in any of the Exhibits or the Company Disclosure Statement, any
information disclosed in one Exhibit or Company Disclosure Statement shall be
deemed to be disclosed for purposes of this Agreement. Certain information set
forth in the Company Disclosure Statement is included solely for informational
purposes and may not be required to be disclosed pursuant to this Agreement. The
disclosure of any information shall not be deemed to constitute an
acknowledgment that such information is required to be disclosed in connection
with the representations and warranties made by the Company in this Agreement or
that it is material, nor shall such information be deemed to establish a
standard of materiality or Material Adverse Effect (and the actual standard of
materiality may be higher or lower than the matters disclosed by such
information).
22
<PAGE> 23
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. The Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Parent and the Purchaser
each 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 reasonably
be expected to 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 or financial condition of Parent or any of
its subsidiaries that would reasonably be expected to prevent or materially
delay consummation of the Offer or Merger.
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 each of the Related Agreements to which it is a party
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and each of the Related Agreements to which it is a
party 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 each of the Related Agreements to which it is a party or to
consummate the transactions contemplated hereby. This Agreement and each of the
Related Agreements to which it is a party 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 and each of
the Related Agreements to which it is a party by the Parent or the Purchaser,
the consummation by the Parent or the Purchaser of the transactions contemplated
hereby or compliance by the Parent or the
23
<PAGE> 24
Purchaser with any of the provisions contained in this Agreement and each of the
Related Agreements to which it is a party will (i) conflict with or violate the
organizational documents of the Parent or the Purchaser, (ii) conflict with or
violate any law, regulation or order 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 the Parent
or the Purchaser, or any of their respective subsidiaries, is a party or by
which any of their respective properties may be bound or affected, except in the
case of the foregoing clause (ii) or (iii) for any such Violations which would
not have a Material Adverse Effect on the Parent.
(b) None of the execution and delivery of this Agreement or each of the
Related Agreements to which it is a party 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
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) applicable state takeover and environmental statutes,
(iv) compliance with the HSR Act and any requirements of any foreign or
supranational Antitrust Laws and (v) Consents the failure of which to obtain or
make would not reasonably be expected to have a Material Adverse Effect on
Parent.
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
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. Purchaser has received and obtained firm
commitment letters from nationally recognized, financially capable financial
institutions addressed to Purchaser providing for equity, mezzanine and debt
capital and sufficient funds to consummate the Offer, the Merger and the
transactions contemplated hereby and related fees and expenses (the "Commitment
Letters"). The Purchaser is not aware of any reason, condition or circumstance
that would prevent or interfere with funding under the Commitment Letters as
contemplated by this Agreement. True, complete and correct copies of the
Commitment Letters, together with a summary of Purchaser's expected sources and
uses of cash, have been furnished to the Company. All fees and expenses
required, to be paid under the Commitment Letters have been paid by or on behalf
of Purchaser.
24
<PAGE> 25
SECTION 5.06 Ownership of Common Shares. Except for the transactions
contemplated by the Shareholders Agreement, as of the date of this Agreement,
neither Parent, Purchaser nor any of their respective subsidiaries or
stockholders beneficially owns any Common Shares.
SECTION 5.07 Brokers. None of Parent, Purchaser, or any of their
respective subsidiaries, officers, directors or employees, has employed any
broker or finder or incurred any liability for any brokerage fees, commissions
or finder's fees in connection with the transactions contemplated by this
Agreement for or with respect to which the Company is or might be liable.
SECTION 5.08 Line of Business. Section 5.08 of the Purchaser Disclosure
Statement contains a complete and accurate list of (i) all Persons which Parent,
Purchaser and each of its shareholders controls (as such term is defined in the
HSR Act) and whose principal line of business is in the consumer products
industry and (ii) the principal products produced or manufactured by each such
Person.
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business of the Company. Except as expressly
contemplated by this Agreement, or with the prior written consent of Parent, or
as specified in the Company Disclosure Statement, 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 and the Company and
its subsidiaries shall not take any action other than in the ordinary course of
business consistent with past practice and in compliance with applicable laws
(including but not limited to Environmental Laws) and will use commercially
reasonable efforts, and will cause each of its subsidiaries to use commercially
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 present relationships of
the Company and its subsidiaries with customers, suppliers and other persons
with which the Company or any of its subsidiaries has significant business
relations. Without limiting the generality of the foregoing and except as
otherwise expressly contemplated by this Agreement or the Company Disclosure
Statement, 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 (which
will not be unreasonably withheld or delayed):
(a) adopt any amendment to its charter or by-laws or
comparable organizational documents;
(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, sell, pledge, dispose of or encumber or authorize the
issuance, reissuance, sale, pledge, disposition or
25
<PAGE> 26
encumbrance 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 or other rights of any kind to acquire any
convertible securities or capital stock or any other ownership interest
(including but not limited to stock appreciation rights or phantom
stock) of the Company or any of its subsidiaries other than the issuance
of Common Shares, in accordance with the terms of the instruments
governing such issuance on the date hereof or 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, Common Shares
outstanding on the date hereof;
(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;
(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 of
officers or employees of the Company or its subsidiaries in the ordinary
course of business and in accordance with past practice, (ii) increases
in salary, wages and benefits granted to officers and employees of the
Company or its subsidiaries in conjunction with new hires, promotions or
other changes in job status in the ordinary course of business for
officers and employees whose aggregate cash compensation is equal to or
less than $75,000 per annum or (iii) 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 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) or grant any
severance or termination pay to (except pursuant to existing agreements,
plans or policies), 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, or amend 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
Arrangement"), except in each case to the extent as required by
applicable law or regulation, provided, however, that nothing herein
will be deemed to prohibit the payment of benefits as they become
payable;
26
<PAGE> 27
(f) (i) acquire (by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership or other business
organization or division thereof or any material assets, (ii) except for
borrowings under existing lines of credit in the ordinary course of
business, incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person, or
make any loans, advances or capital contributions to, or investments in,
any other person, except for bonuses, advances, capital contributions or
investments between any wholly owned subsidiary of the Company and the
Company or another wholly owned subsidiary of the Company, (iii) except
in the ordinary course of business consistent with past practice, make
or start any bid or proposal, or enter into, renew or amend any contract
or agreement that could result in a loss or would involve aggregate
consideration in excess of $0.5 million, (iv) authorize any single
capital expenditure which is in excess of $0.5 million or capital
expenditures which are, in the aggregate, in excess of $1.0 million for
the Company and its subsidiaries taken as a whole, (v) enter into any
transaction, contract or commitment with any affiliate of the Company,
except as contemplated by this Agreement, (vi) sell, lease, license to
others or dispose of any assets outside the ordinary course of business
consistent with past practice which individually or in the aggregate are
material to the Company or (vii) enter into or amend any contract,
agreement, commitment or arrangement with respect to any of the matters
set forth in this Section 6.01(f);
(g) except as may be required as a result of a change in law or
in generally accepted accounting principles, change in any material
respect any of the accounting practices or principles used by it;
(h) make or change any Tax election, make or change any method of
accounting with respect to Taxes, file any amended Tax Return or settle
or compromise any material Tax liability;
(i) settle or compromise any pending or threatened suit, action
or claim which is material or which relates to the transactions
contemplated hereby;
(j) make any change in the key management structure of the
Company or any of its subsidiaries, including, without limitation, the
hiring of additional officers or the termination of existing officers;
(k) transfer or grant any rights under, or enter into any
settlement regarding, the breach or infringement of, any Company
Intellectual Property Rights, or modify any existing rights with respect
thereto;
(l) take any action, including but not limited to introducing a
new product, reasonably likely to expose the Company to any claim that
the Company has violated applicable laws, rules or regulations or any
rights of any other person in any material respect;
27
<PAGE> 28
(m) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its subsidiaries not
constituting an inactive subsidiary (other than the Merger);
(n) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary course of business and consistent with past practice of
liabilities reflected or reserved against in the financial statements of
the Company or incurred in the ordinary course of business and
consistent with past practice;
(o) enter into any collective bargaining agreement or any
successor collective bargaining agreement to any collective bargaining
agreement; or
(p) take, or offer or propose to take, or agree to take in
writing or otherwise, any of the actions described in Sections 6.01(a)
through 6.01(o) or any action which would make any of the
representations or warranties of the Company contained in this Agreement
untrue and incorrect as of the date when made in any material respect if
such action had then been taken, or would result in any of the
conditions set forth in Annex I not being satisfied.
SECTION 6.02 Access to Information. From the date hereof 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, provide Parent
and the Purchaser and their respective officers, employees, counsel, advisors
and representatives and financing sources (collectively, the "Parent
Representatives") reasonable 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 and
upon reasonable notice, to the offices and other facilities and to the books and
records of the Company and its subsidiaries, and will permit Parent and the
Purchaser to make inspections of such as either of them may reasonably require,
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 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 reasonably request. Unless otherwise required by law, Parent
and the Purchaser will, and will cause the Parent Representatives to, hold any
such information in confidence until such time as such information otherwise
becomes publicly available through no wrongful act of Parent, the Purchaser or
the Parent Representatives. No investigation pursuant to this Section 6.02 shall
affect any representations or warranties of the parties herein or the conditions
to the obligations of the parties hereto. In the event of termination of this
Agreement for any reason, Parent and the Purchaser will, and will cause the
Parent Representatives to, return to the Company or destroy all copies of
written information furnished by the Company or any of the Company
Representatives to Parent or the Purchaser or the Parent Representatives and
destroy all memoranda, notes and other writings prepared by Parent, the
Purchaser or the Parent Representatives based upon or including the information
furnished by the Company or any of the Company Representatives to
28
<PAGE> 29
Parent or the Purchaser or the Parent Representatives (and Parent will certify
to the Company that such destruction has occurred). In addition, Parent will
comply with the terms of the Confidentiality Agreement (as hereinafter defined).
SECTION 6.03 Efforts. (a) Subject to the terms and conditions hereof,
each party hereto shall use their reasonable best efforts to ensure that the
conditions set forth in Article VII and Annex I are satisfied and to consummate
and make effective the transactions contemplated by the Offer, the Merger and
this Agreement as promptly as practicable in accordance with this Agreement.
(b) The Company agrees to provide, and will cause its subsidiaries and
its and their respective officers, employees and advisers to provide, all
reasonable cooperation in connection with the arrangement of any financing
contemplated by the Commitment Letters to be consummated contemporaneous with
the Closing in respect of the transactions contemplated by this Agreement,
including without limitation, participation in meetings, due diligence sessions,
road shows, the preparation of offering memoranda, private placement memoranda,
prospectuses and similar documents. The Company will also provide commercially
reasonable assistance to the Purchaser in connection with the execution and
delivery of any underwriting or placement agreements, pledge and security
documents, other definitive financing documents, or other requested certificates
or documents, as may be requested by Parent or Purchaser, except (i) as
specifically provided in Section 6.16 and (ii) the Company will not be
responsible for any indemnities or expense reimbursements in connection
therewith until the Offer closes.
(c) The Company and the Purchaser will as promptly as practicable file
with the Federal Trade Commission and the Department of Justice the notification
and report forms required for the transactions contemplated hereby and any
supplemental information that may be reasonably requested in connection
therewith pursuant to the HSR Act, which notification and report forms and
supplemental information will comply in all material respects with the
requirements of the HSR Act. Purchaser shall pay all filing fees required with
respect to the notification, report and other requirements of the HSR Act.
(d) 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 parties 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.
(e) Each of the parties agrees to cooperate with each other in taking,
or causing to be taken, all actions necessary to delist the Shares from the
NASDAQ National Market; provided, that such delisting shall not be effective
until after the Effective Time. The parties also
29
<PAGE> 30
acknowledge that it is Purchaser's intent that the Shares following the Merger
will not be listed on any national securities exchange or quoted on NASDAQ/NMS.
(f) The Purchaser agrees to use reasonable best efforts to promptly
satisfy any conditions in the Commitment Letters, and not to waive or amend, or
provide any waivers, in respect of the Commitment Letters in a manner which
would adversely affect the consummation of the Merger or the Offer in accordance
with this Agreement, including its timing thereof (an "Adverse Manner"). The
Purchaser agrees to fully enforce the Commitment Letters.
(g) Other than pursuant to Section 1.01(a), the Purchaser agrees not to
delay, extend or terminate the Offer or the Merger without the prior written
approval of the Company, unless Purchaser is entitled to terminate this
Agreement pursuant to Section 8.01.
SECTION 6.04 Consents.
(a) Each of the parties will as promptly as practicable (i) make the
required filings with, and take all reasonable steps to obtain the required
authorizations, approvals, consents and other actions of, any Governmental
Entity, (ii) take all reasonable steps (not including the expenditure of money
or the payment or delivery of other consideration) to obtain the required
consents of other persons with respect to the transactions contemplated hereby
and the Shareholders Agreement and (iii) use its reasonable best efforts to
obtain waivers of any Violations that may be caused by, the consummation of the
Offer, the Merger and other transactions contemplated by the Offer and this
Agreement.
(b) Any party hereto shall promptly inform the others of any material
communication from the United States Federal Trade Commission, the Department of
Justice 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 or any other domestic or foreign
government or governmental or multinational authority in connection with the
transactions contemplated by this Agreement. The parties will use their
respective commercially reasonable best efforts to satisfy the condition in
Section 7.01(d).
SECTION 6.05 Maintenance of Insurance. Each of the Company and its
subsidiaries will continue to carry its existing insurance through the Effective
Time, and shall not allow any breach, default or cancellation (other than
expiration and replacement of policies in the ordinary cause of business) of
such insurance policies or agreements to occur or exist that would reasonably be
expected to have a Material Adverse Effect on the Company.
30
<PAGE> 31
SECTION 6.06 Public Announcements. So long as this Agreement is in
effect, Parent, the Purchaser and the Company agree 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 and shall not issue
any such press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement with any
securities exchange.
SECTION 6.07 Employment Benefit Arrangements.
(a) Parent agrees that the Company will honor and, from and after the
Effective Time, Parent will cause the Surviving Corporation to honor and
continue to maintain in full force and effect, all Employee Benefit Arrangements
to which the Company or any of its subsidiaries is presently a party, including
but not limited to the agreements existing on the date hereof between the
Company and certain executives of the Company (the "Executive Protection
Agreements") listed on the Company Disclosure Statement, provided however that
nothing herein shall restrict or limit the surviving corporation's ability to
amend or terminate any Plan.
(b) Parent will cause the Surviving Corporation to take such actions as
are necessary so that, for a period of at least one year from the Effective
Time, employees of the Company and its subsidiaries (excluding employees covered
by collective bargaining agreements) will be provided cash compensation employee
benefit and incentive compensation and similar plans and programs as will
provide compensation and benefits which in the aggregate are substantially
comparable to those provided to such employees by the Plans listed in Section
4.10 of the Company Disclosure Statement; provided, however, that neither the
Parent nor the Surviving Corporation shall have any obligation to provide
benefits substantially, comparable to any Plan providing equity awards.
(c) In any termination or layoff of (i) any employee as of the Effective
Time as a result of the transactions contemplated by this Agreement or (ii) any
employee of the Surviving Corporation as of the Effective Time (a "Hired
Employee") after the Effective Time, Parent will cause the Surviving Corporation
to comply fully, if applicable, with the Worker Adjustment and Retraining
Notification Act of 1988 ("WARN") and all other applicable foreign, Federal
state and local laws, including those prohibiting discrimination and requiring
notice to employees. The Surviving Corporation shall not, and shall cause its
subsidiaries not to, at any time prior to 60 days after the Effective Time,
effectuate a "plant closing" or "mass layoff" as those terms are defined in WARN
affecting in whole or in part any facility, site of employment, operating unit
or employee of the Company or any subsidiary without complying fully with the
requirements of WARN. Parent will bear the cost of compliance with (or failure
to comply with) any such laws.
SECTION 6.08 Indemnification.
(a) The Certificate of Incorporation and By-Laws of the Surviving
Corporation shall contain provisions no less favorable with respect to
indemnification than are set forth in the Certificate of Incorporation and
By-laws of the Company, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
31
<PAGE> 32
manner that would adversely affect the rights thereunder of individuals who at
the Effective Time were directors, officers or employees of the Company.
(b) For six years from and after the Effective Time, Parent agrees that
it will or will cause the Surviving Corporation to indemnify and hold harmless
each present and former director, officer and employee of the Company
(collectively, the "Indemnified Parties") against any costs or expenses
(including reasonable attorneys' fees), judgments, fines, losses, claims,
damages or liabilities (collectively, "Costs") (but only to the extent such
Costs are not otherwise covered by insurance and paid) incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative (collectively, "Claims"), arising out
of or pertaining to matters existing or occurring at or prior to the Effective
Time, including, in any event, in connection with the Offer, the Merger and this
Agreement, whether asserted or claimed prior to, at or after the Effective Time,
to the fullest extent permitted under applicable law (and Parent shall, or shall
cause the Surviving Corporation to, also advance expenses as incurred to the
fullest extent permitted under applicable law provided the person to whom
expenses are advanced provides an undertaking to repay such advances if it is
ultimately determined that such person is not entitled to indemnification).
(c) Parent agrees that the Company and, from and after the Effective
Time, the Surviving Corporation shall use its reasonable best efforts to cause
to be maintained in effect for not less than six years from the Effective Time
the current policies of the directors' and officers' liability insurance
maintained by the Company with respect to matters occurring prior to the
Effective Time; provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage containing terms and conditions which are
no less advantageous 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 200% 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 required by this Section 6.08(c)
it shall obtain as much comparable insurance as possible for an annual premium
equal to such maximum amount.
(d) Any Indemnified Party wishing to claim indemnification under this
Section 6.08, upon learning of any such claim, action, suit, proceeding or
investigation, shall promptly notify the Parent thereof, but the failure to so
notify shall not relieve Parent of any liability it may have to such Indemnified
Party if such failure does not materially prejudice the Parent. In the event of
any such claim, action, suit, proceeding or investigation (whether arising
before or after the Closing Date), (i) Parent or the Surviving Corporation shall
have the right to assume the defense thereof and Parent shall not be liable to
such Indemnified Parties for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Parties in connection with
the defense thereof, except that if Parent or the Surviving Corporation elects
not to assume such defense or counsel for the indemnified parties advises that
there are issues which raise conflicts of interest between Parent or the
Surviving Corporation and the Indemnified Parties, the Indemnified Parties may
retain counsel satisfactory to them, and Parent shall pay all reasonable fees
and expenses of such counsel for the Indemnified Parties promptly as statements
therefor are
32
<PAGE> 33
received; provided, however, that Parent or the Surviving Corporation shall be
obligated pursuant to this paragraph (d) to pay for only one firm of counsel for
all Indemnified Parties in any jurisdiction unless the use of one counsel for
such Indemnified Parties would present such counsel with a conflict of interest,
(ii) the Indemnified Parties will cooperate in the defense of any such matter
and (iii) Purchaser shall not be liable for any settlement effected without its
prior written consent, which will not be unreasonably withheld; and provided,
further, that Purchaser shall not have any obligation hereunder to any
Indemnified Party if and when a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable law.
(e) If the Parent or any of its successors or assigns (i) shall
consolidate with or merge into any other corporation or entity and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) shall transfer all or substantially all of its properties and
assets to any individual, corporation or other entity, then, and in each such
case, proper provisions shall be made so that the successors and assigns of the
Parent shall assume all of the obligations set forth in this Section 6.08.
(f) The provisions of this Section 6.08 are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties, their
heirs and their representatives.
SECTION 6.09 No Solicitation. The Company agrees that, prior to the
Effective Time, it shall not, and shall not authorize or permit any of its or
its subsidiaries' directors, officers, employees, agents, advisors or
representatives, directly or indirectly, to (a) solicit, initiate or encourage
or knowingly facilitate the submission of any inquiries or the making of any
proposal (a "Takeover Proposal") with respect to any acquisition or purchase of
a substantial amount of the assets of the Company and its subsidiaries, taken as
a whole, or of over 15% of any class of equity securities or convertible
securities of the Company or any of its subsidiaries, or any tender offer
(including a self tender offer) or exchange offer that if consummated would
result in any person beneficially owning 15% or more of any class of equity
securities or convertible securities of the Company or any of its subsidiaries,
or any merger, consolidation or business combination recapitalization,
reclassification, liquidation, dissolution or similar transaction involving the
Company or any of its subsidiaries other than the transactions contemplated by
this Agreement and the Shareholders Agreement or any other transaction the
consummation of which would reasonably be expected to impede, interfere with,
prevent or materially delay the Offer or Merger or which would reasonably be
expected to materially dilute the benefits to Parent and Purchaser of the
transactions contemplated hereby (each, an "Acquisition Transaction"), (b)
negotiate, explore or otherwise participate in discussions with any person
(other than Parent, Purchaser or their respective directors, officers,
employees, agents and representatives), and including any parties with which the
Company has previously engaged in discussions or negotiations with respect to
any Acquisition Transaction, or furnish to any person (other than Parent,
Purchaser or their respective directors, officers, employees, agents and
representatives) any information with respect to its business, properties or
assets or any of the foregoing, or otherwise cooperate in any way with, or
assist or participate in, facilitate or encourage, any effort or attempt by any
other
33
<PAGE> 34
person (other than Parent, Purchaser or their respective directors, officers,
employees, agents and representatives) to do or seek any of the foregoing or (c)
enter into any agreement, arrangement or understanding with respect to, or
endorse, any Takeover Proposal; provided, however, that the foregoing shall not
prohibit the Company from (i) prior to the consummation of the Offer (A)
furnishing information pursuant to a confidentiality letter (provided for
informational purposes to Parent), with terms no less favorable than the
Confidentiality Agreement, concerning the Company and its businesses, properties
or assets to a third party who has made an unsolicited bona fide written
Takeover Proposal, or (B) engaging in discussions or negotiations with such a
third party who has made an unsolicited bona fide written Takeover Proposal or
(ii) following receipt of an unsolicited bona fide written Takeover Proposal but
prior to consummation of the Offer, failing to make or withdrawing or modifying
its recommendation referred to in Section 1.02(a), but in each case referred to
in the foregoing clauses (i) and (ii) only to the extent that the Board of
Directors of the Company shall have concluded in good faith, on the basis of
advice from outside legal counsel and the Company's financial advisors, that (A)
such Takeover Proposal is more favorable to the stockholders of the Company than
the transactions contemplated by this Agreement (taking into account all legal,
financial, regulatory and other aspects of the proposal and the person making
the proposal) and (B) such action is necessary in order for the Board of
Directors to comply with its fiduciary duties to the shareholders of the Company
under applicable law; provided, further, that the Board of Directors of the
Company shall not take any of the foregoing actions referred to in clauses (i)
and (ii) until after notice to Parent and Purchaser with respect to such action
and the Board of Directors shall continue to advise Parent and Purchaser after
taking such action. Nothing herein shall prevent the Board from taking, and
disclosing to the Company's stockholders, a position contemplated by Rules 14d-9
and 14e-2 promulgated under the Exchange Act with regard to any tender offer. In
addition, if the Board of Directors of the Company receives an unsolicited
Takeover Proposal or any inquiry with respect to or which could lead to any
Takeover Proposal, then the Company shall promptly inform Parent and Purchaser
orally and in writing of the terms and conditions of such proposal and the
identity of the person making it.
SECTION 6.10 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 covenant, condition or agreement hereunder 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 nor shall it limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
SECTION 6.11 Special Meeting. The Company shall take no action unless
compelled by legal process to call a special meeting of stockholders of the
Company except in accordance
34
<PAGE> 35
with this Agreement unless and until this Agreement has been terminated in
accordance with its terms.
SECTION 6.12 Disposition of Litigation. (a) The Company agrees that it
will not settle any litigation currently pending, or commenced after the date
hereof, against the Company or any of its directors by any stockholder of the
Company relating to the Offer or this Agreement, without the prior written
consent of Parent.
(b) The Company will not voluntarily cooperate with any third party
which has sought or may hereafter seek to restrain or prohibit or otherwise
oppose the Offer or the Merger and will cooperate with Parent and Purchaser to
resist any such effort to restrain or prohibit or otherwise oppose the Offer or
the Merger.
SECTION 6.13 Restatement of Financial Advisory Agreement. The Company
has amended and restated the Financial Advisory Agreement, dated July 12, 1995,
between the Company and TJC Management Corp. (the "Financial Advisory
Agreement") in consideration of the payment of fees of not more than $2.5
million to TJC Management (the "TJC Amount") in accordance with a payment letter
acceptable to Parent (the "TJC Letter"). The parties acknowledge that the TJC
Amount is paid in consideration of services in connection with this Agreement,
as well as the transactions contemplated hereby, and such amendment and
restatement, which constitute conditions of Purchaser's willingness to enter
into this Agreement.
SECTION 6.14 Release. Except to the extent that the Released Parties are
shown in a final, unappealable determination by courts of competent jurisdiction
to have engaged in criminal, fraudulent or intentionally improper conduct,
Parent hereby irrevocably and unconditionally releases, acquits and forever
discharges on behalf of itself and any person acting by, through, or under or in
concert with Parent (including the Company) and all persons acting by, through,
under or in concert with any of them (collectively the "Releasees"), or any of
them, each of the directors and officers of the Company (collectively, the
"Released Parties") from any and all charges, complaints, claims, suits,
judgments, demands, actions, obligations or liabilities, damages, causes of
action, rights, costs, loans, debts and expenses (including attorneys' fees and
costs actually incurred) of any nature whatsoever known or unknown, emanating
from, arising out of, or in any way whatsoever arising prior to the Effective
Time or resulting from any action which the Company may have taken or failed to
take in connection with this Agreement and the transactions contemplated hereby,
including the Merger and the Offer, and Parent agrees that neither it, nor any
person acting by, through, or under, Parent shall institute or pursue any action
or actions, cause or causes of action (in law or in equity), suits, or claims in
state or federal court against or adverse to the Released Parties arising from
or attributable to the Releasees in connection with the foregoing.
SECTION 6.15 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 Offer and the Merger and the Shareholder's
Agreement, of any state or foreign takeover law.
35
<PAGE> 36
SECTION 6.16 The Debt Offer. (a) Provided that this Agreement shall not
have been terminated in accordance with Section 8.01, and subject to Section
6.16(d), the Company shall, as soon as practicable after the date hereof,
commence an offer to purchase all of the Company's outstanding 9-7/8% Series B
Senior Notes due 2005 (the "Senior Notes") on the terms set forth in Section
6.16 of the Company Disclosure Statement and such other customary terms and
conditions as are reasonably acceptable to Parent (the "Debt Offer"); provided,
that closing of the Debt Offer will be subject to closing the Offer or Merger.
The Company shall waive any of the conditions to the Debt Offer and make any
other changes in the terms and conditions of the Debt Offer as may be reasonably
requested by Parent, and the Company shall not, without Parent's prior consent,
waive any condition to the Debt Offer, make any changes to the terms and
conditions of the Debt Offer set forth in Section 6.16 of the Disclosure
Statement or make any other changes to the terms and conditions of the Debt
Offer. Notwithstanding anything in this Agreement, including the immediately
preceding sentence, to the contrary, the Company shall not be required to accept
for payment or pay for any Senior Notes prior to the closing of the Offer.
(b) Promptly following the date of this Agreement, the Company shall
prepare, subject to reasonable advice and comments of Parent, an offer to
purchase the Senior Notes (or portions thereof) and forms of the related letter
of transmittal (the "Letter of Transmittal") (collectively, the "Debt Offer to
Purchase"), as well as all other information and exhibits required in connection
therewith (collectively, the "Debt Offer Documents"). All mailings to the
holders of Senior Notes in connection with the Debt Offer shall be subject to
the prior review, comment and approval (which will not be unreasonably withheld)
of Parent. The Company will use its reasonable best efforts to cause the Debt
Offer Documents to be mailed to the holders of the Senior Notes as promptly as
practicable following commencement of the Debt Offer in accordance with Section
6.16(a).
(c) The Company covenants and agrees that, subject to the terms and
conditions of this Agreement, including but not limited to the conditions to the
Debt Offer, on the closing of the Debt Offer, the Company will accept for
payment the Senior Notes.
(d)(i) Notwithstanding the foregoing, the Company will not be obligated
to take or refrain from taking any action which it reasonably believes is
inconsistent with applicable law or the terms and conditions of the Senior Notes
or which would impede, delay or interfere with the consummation of the Offer or
the Merger in accordance with this Agreement.
(ii) The Purchaser acknowledges that the Company is making the Debt
Offer at the request and as an accommodation to the Purchaser, and that the Debt
Offer, and its terms, conditions, failure or success, or any claims or actions
relating thereto, will not be grounds for failure of a condition, termination or
delay of the Offer or the Merger, including the conditions thereof, nor
otherwise affect them.
(iii) The Purchaser will pay and reimburse the Company upon request for
all fees and expenses relating to the Debt Offer, including but not limited to
legal fees and expenses,
36
<PAGE> 37
accounting fees and expenses, and printing, mailing and filing fees and
expenses, and fees and expenses of banks, financial institutions,
representatives and advisors, and will indemnify the Company and its directors
and officers from and against all claims, lawsuits, losses, expenses and
liabilities, including legal fees and expenses incurred by any of them in
connection with the Debt Offer and this Section 6.16.
(iv) The Purchaser agrees to comply with applicable law and the terms
and conditions of the Senior Notes in connection with the Debt Offer and this
Section 6.16.
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. If required by the GCL, the
stockholders of the Company shall have duly adopted this Agreement and
approved the transactions contemplated by this Agreement, pursuant to
the requirements of the Company's certificate of incorporation and
applicable law (which the Company has represented shall be solely the
affirmative vote of a majority of the outstanding Shares).
(b) Purchase of Shares. The Purchaser shall have accepted for
payment and paid for Shares pursuant to the 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 Shares pursuant to the Offer in
violation of the terms of the 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;
provided that the party invoking this condition shall have used their
reasonable best efforts to prevent the entry of such order, judgment,
decree, injunction or ruling and to appeal as promptly as practicable
any such order, judgment, decree, injunction or ruling.
(d) Expiration of HSR Waiting Period. Any waiting period
applicable to the Merger under the HSR Act shall have terminated or
expired.
37
<PAGE> 38
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.01 Termination. This Agreement may be terminated and the Offer
and Merger contemplated hereby may be abandoned at any time prior to the
Effective Time, notwithstanding approval thereof by the stockholders of the
Company:
(a) by the mutual written consent of Parent and the Company;
(b) by Parent or the Company if there shall be any statute, law,
rule or regulation that makes consummation of the Offer or the Merger
illegal or prohibited or if any court or other Governmental Entity of
competent jurisdiction or located or having jurisdiction within the
United States or any country or economic region in which either the
Company or the Parent, directly or indirectly, has material assets or
operations shall have issued, enacted, entered, promulgated or enforced
any final order, judgment, decree, injunction, or ruling or taken any
other action restraining, enjoining or otherwise prohibiting the Offer
or the Merger and such order, judgment, decree, injunction or ruling
shall have become nonappealable;
(c) by Parent or the Company if (i) the Offer is terminated or
withdrawn pursuant to its terms without any Shares being purchased
thereunder; or (ii) if Purchaser shall have failed to pay for Common
Shares pursuant to the Offer within 55 days following the date hereof;
provided, however, that neither Parent nor the Company, as the case may
be, may terminate the Agreement pursuant to this Section 8.01(c) if
Purchaser's termination or withdrawal of the Offer or failure to pay for
Common Shares pursuant to the Offer has been caused by or results from
the failure of such party seeking to terminate the Agreement to perform
in any material respects any of its covenants or agreements contained in
this Agreement or a material breach of such party's representations and
warranties contained in this Agreement;
(d) by the Company if (i) the Offer shall not be commenced upon
the day specified in Section 1.01, provided, that the failure to so
commence has not been caused by and does not result from the failure of
the Company to perform in any material respect any of its
representations, warranties, covenants or agreements contained in this
Agreement, (ii) there shall have been a breach of any representation,
warranty, covenant or agreement (without regard to any materiality or
Material Adverse Effect qualifier) on the part of Parent or the
Purchaser contained in this Agreement which materially adversely affects
Parent's or Purchaser's ability to consummate (or materially delays
commencement or consummation of) the Offer, and, with respect to any
such breach that is reasonably capable of being cured, which shall not
have been cured prior to the earlier of (A) 10 business days following
notice of such breach and (B) two business days prior to the date on
which the Offer expires, (iii) Purchaser shall have terminated the
Offer, (iv) any of the Commitment Letters shall have been withdrawn,
terminated or modified in an
38
<PAGE> 39
Adverse Manner (unless such withdrawn, terminated or modified
Commitment Letters (which shall not include the Commitment Letter of
J.W. Childs Equity Partners II, L.P.) are promptly replaced, with
commitment letters from nationally recognized, capable financial
institutions, having substantially similar commitment, terms and
conditions, including but not limited to the funding and closing
conditions set forth therein, all of which shall be in form and
substance reasonably acceptable to the Company), or (unless with the
Company's prior written approval in accordance with this Agreement) or
(v) prior to the purchase of Shares pursuant to the Offer, any person
shall have made a bona fide Takeover Proposal (A) that the Board of
Directors of the Company determines in its good faith judgment in
consultation with its financial advisor, is more favorable to the
Company's stockholders than the Offer and the Merger (taking into
account all legal, financial, regulatory and other aspects of the
proposal and the person making the proposal) and (B) as a result of
which a majority of the Board of Directors concludes in good faith on
the advice of independent outside legal counsel to the Company that
termination of this Agreement is necessary in order for the Board to
comply with its fiduciary obligations under applicable law; provided,
that such termination under this clause (v) shall not be effective
until the Company has made payment of the full fee and expense
reimbursement required by Section 8.03(b) hereof; or
(e) By Parent prior to the purchase of Shares pursuant to the
Offer, if (i) there shall have been a breach of any representation or
warranty on the part of the Company contained in this Agreement (without
regard to any materiality or Material Adverse Effect qualifier) which
would reasonably be expected to have a Material Adverse Effect on the
Company or which would materially adversely affect (or materially delay)
the commencement or consummation of the Offer, (ii) there shall have
been a breach of any covenant or agreement on the part of the Company
contained in this Agreement (without regard to any materiality or
material Adverse Effect qualifier) which would reasonably be expected to
have a Material Adverse Effect on the Company or which would materially
adversely affect (or materially delay) the consummation of the Offer,
which, in the clause (i) or (ii), if such breach is reasonably capable
of being cured, such breach shall not have been cured prior to the
earlier of (A) 10 days following notice of such breach and (B) two
business days prior to the date on which the Offer expires, (iii) the
Company shall effect, or enter into any agreement with respect to, an
Acquisition Transaction with any person (other than Parent or Purchaser)
or the Board has resolved to do so, (iv) the Board shall have withdrawn
or modified (including by amendment of the Schedule 14D- 9) in a manner
adverse to Purchaser its approval or recommendation of the Offer, this
Agreement or the Merger or shall have recommended another offer or
transaction, or shall have resolved to effect any of the foregoing or
(v) the Minimum Condition (as defined in Annex I hereto) shall not have
been satisfied by the expiration date of the Offer and, in addition, on
or prior to such date, either (A) any person (other than Parent or
Purchaser) shall have made a public proposal, filing, announcement or
communication to the Company with respect to a Significant Acquisition
Transaction (as defined in Section 9.15 hereof) or (B) any person
(including the Company or any of its affiliates or
39
<PAGE> 40
subsidiaries), other than Parent or any of its affiliates shall have
become the beneficial owners of 25% or more of the Common Shares.
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 two sentences 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) Subject to Sections 8.03(b) and (c)
below, all Expenses (as hereinafter defined) incurred by the parties hereto
shall be borne solely and entirely by the party which has incurred such
Expenses; provided, that all Expenses related to the printing, filing and
mailing of the Offer Documents, the Debt Offer Documents and all Commission and
other regulatory filing fees incurred in connection with the Offer Documents and
Debt Offer Documents allocable to the Company and to Parent or Purchaser,
including legal fees and expenses, as the case may be, shall be paid by
Purchaser.
(b) (i) If this Agreement is terminated by the Company pursuant to
Section 8.01(d)(v) or by the Purchaser pursuant to Section 8.01(e) (iii) or
(iv); or
(ii) (A) If this Agreement is terminated by Parent pursuant to Section
8.01(e)(i), (ii) or (v), and, in addition, (B) following the date of this
Agreement and at or prior to the time of the event giving rise to such
termination there shall have existed a Significant Takeover Proposal with
respect to the Company and (C) within 12 months thereafter, either (1) the
Company enters into an agreement with respect to any Significant Acquisition
Transaction or (2) any Significant Acquisition Transaction occurs;
the Company shall pay to Parent, within one business day following the execution
and delivery of such agreement or such occurrence, as the case may be, or no
later than concurrently with any termination contemplated by Section
8.01(e)(iii) or (iv) or Section 8.01(d)(v), a fee, in cash and in immediately
available funds, of $5.5 million (the "Fee").
(c) If this Agreement is terminated pursuant to Section 8.01(d)(v) or
Section 8.01(e), then the Company shall pay to Purchaser, within one business
day after its receipt of written statements therefor, an amount equal to the
reasonable and documented Expenses set forth in such statement; provided, that
in no event will the amount of the Expenses reimbursed exceed $1 million (the
"Expenses Cap"); provided, however, that the Expenses Cap shall not apply to the
Collection Expenses. Such Expenses shall be in addition to, and not in
substitution for, the Fee paid by the Company, if any, pursuant to Section
8.03(b).
"Expenses" means all out-of-pocket fees and expenses actually incurred
by Parent or Purchaser or on their behalf, whether before or after the execution
and delivery of this Agreement, in connection with the transactions contemplated
by this Agreement, including the
40
<PAGE> 41
Merger and the Shareholders Agreement, including without limitation, fees and
reasonable expenses payable to all banks, investment banking firms and other
financial institutions, and their respective agents and counsel, all fees and
reasonable expenses of counsel, accountants, experts and consultants to Parent
or Purchaser, and, further, including without limitation fees and reasonable
expenses of, or incurred in connection with, any litigation or other proceedings
to collect the Fee or the Expenses (the "Collection Expenses").
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, Section 6.07, Section 6.08, Section 6.13, Section 6.14 and 6.16(d)
shall survive the Effective Time indefinitely (except to the extent a shorter
period of time is explicitly specified therein) and those agreements set forth
in the last two sentences of Section 6.02, Section 8.03 and Article IX shall
survive termination of this Agreement.
SECTION 9.02 Limitation on Warranties. The Company makes no
representations or warranties with respect to any projections, forecasts or
forward-looking information provided to Parent or Purchaser. There is no
assurance that any projected or forecasted results will be achieved. EXCEPT AS
TO THOSE MATTERS COVERED BY THE REPRESENTATIONS AND WARRANTIES IN ARTICLE IV,
THE COMPANY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR
IMPLIED, AS TO ANY OTHER INFORMATION OR MATTERS. Each of Parent and Purchaser
acknowledges that neither the Company, any subsidiary nor any other Person has
made any representation or
41
<PAGE> 42
warranty, express or implied, as to the accuracy or completeness of any
information which is not included in this Agreement or the Company Disclosure
Statement, and neither the Company, any subsidiary, nor any other Person will
have or be subject to any liability to Parent or Purchaser, any affiliate
thereof or any other Person resulting from the distribution of any such
information to, or use of any such information by, Parent or Purchaser, any
affiliate thereof or any of their agents, consultants, accountants, counsel or
other representatives. Without limitation of the foregoing, to the extent that
any memoranda or summaries prepared by the Company, any subsidiary or by any of
their respective advisors or representatives regarding the Company, the
subsidiaries, or their respective businesses are or have been provided to Parent
or Purchaser, Parent and Purchaser acknowledge and agree that no representation
or warranty is made to Purchaser or any affiliate thereof or any other Person as
to the completeness or accuracy of such memoranda or summaries.
SECTION 9.03 Company Disclosure Statement. Any fact or item in any
portion of the Company Disclosure Statement shall be deemed to be disclosed with
respect to any other relevant portion, whether or not an explicit
cross-reference appears. No representation or warranty hereunder shall be deemed
to be inaccurate if the actual situation is explicitly disclosed in the
specifically referenced section or cross-section of the Company Disclosure
Statement. Neither the specification of any dollar amount in any representation,
warranty or covenant contained in this Agreement nor the inclusion of any
specific item in the Company Disclosure Statement hereto is intended to imply
that such amount, or higher or lower amounts, or the item so included or other
items, are or are not material, and no party shall use the fact of the setting
forth of any such amount or the inclusion of any such item in any dispute or
controversy between the parties as to whether any obligation, item or matter not
described herein or included in the Company Disclosure Statement is or is not
material for purposes of this Agreement.
SECTION 9.04 Entire Agreement; Assignment.
(a) The Exhibits and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof. This Agreement, the
Related Agreements (including the documents and the instruments referred to
herein and the letter agreements, by and between Purchaser and the Company,
dated December 4, 1997 and January 12, 1999 (collectively, the "Confidentiality
Agreement")), constitute the entire agreement and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof.
(b) Neither this Agreement and the Related Agreements nor any of the
rights, interests or obligations hereunder or thereunder 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 and Purchaser may
assign all or any of their rights to affiliates with the permission of the
Company, which will not be unreasonably withheld; provided, that no such
assignment shall relieve the assigning party of its obligations hereunder.
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.
42
<PAGE> 43
SECTION 9.05 Binding Agreement. This Agreement and the Related
Agreements shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided, that, except as provided
in Section 9.04(b), no party may assign its rights and obligations under this
Agreement without the prior written consent of the other parties.
SECTION 9.06 Further Assurances. Upon the reasonable request of Parent,
Purchaser or the Company, each party will on and after the Effective Time
execute and deliver to the other parties such other documents, assignments and
other instruments as may be required to effectuate completely the transfer and
assignment to Purchaser of, and to vest fully in Purchaser title to, the Shares,
and to effect and evidence the provisions of this Agreement and the Related
Agreements and the transactions contemplated hereby.
SECTION 9.07 Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity of enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other situation or in any other jurisdiction. If
the final judgement of a court of competent jurisdiction declares that any term
or provision hereof is invalid or unenforceable, the Parties agree that the
court making the determination of invalidity or unenforceability shall have the
power to reduce the scope, duration, or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.
SECTION 9.08 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:
c/o J.W. Childs Associates, L.P.
One Federal Street - 21st Floor
Boston, MA 02110
Attention: Adam Suttin
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: Mario A. Ponce, Esq.
43
<PAGE> 44
If to the Company:
American Safety Razor Company
One Razor Blade Lane
Verona, Virginia 24482
Attention: Tom Kasvin
with a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019-5820
Attention: James B. Carlson, Esq.
with a copy to:
The Jordan Company
767 Fifth Avenue
New York, New York 10153
Attention: Jonathan F. Boucher
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 9.09 Governing Law; Jurisdiction. (a) This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Delaware, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
(b) In addition, each of the parties hereto (i) consents to submit
itself to the personal jurisdiction of any federal court located in the State of
New York or any New York state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (ii) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and (iii) agrees that it will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in court other than a federal or state sitting in the State
of New York.
(c) In the event of any dispute in respect of this Agreement or the
Related Agreements, then the enforcement costs (including legal fees and
expenses) of the prevailing party will be paid and reimbursed by the losing
party.
44
<PAGE> 45
SECTION 9.10 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY OR DISPUTE THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH
SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii)
EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION 9.10.
SECTION 9.11 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 9.12 Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction shall be applied against any party. Any
reference to any federal, state or local law shall be deemed also to refer to
all rules and regulations promulgated thereunder, unless the context requires
otherwise.
SECTION 9.13 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 9.14 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), 6.08, 6.13 and 6.14, 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 9.15 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
45
<PAGE> 46
or cause the direction of the management and policies of that person,
whether through the ownership of voting securities, by contract or
otherwise;
(b) the term "Knowledge" means the actual knowledge, after
reasonable inquiry, of the executive officers of the Company;
(c) the term "Significant Acquisition Transaction" shall have the
same meaning as "Acquisition Transaction" except that the references to
15% contained therein shall be deemed to be (i) 35% with respect to any
Significant Acquisition Transaction effected through a primary sale of
Common Stock (or a security convertible into Common Stock) by the
Company or a merger involving the Company or a tender or exchange offer
or any other transaction that the Board has recommended acceptance of,
and (ii) 50% with respect to any Significant Acquisition Transaction
effected through a tender or exchange offer that the Board has
recommended rejection of or other market or secondary acquisition of the
Common Stock (or a security convertible into Common Stock);
(d) the term "Significant Takeover Proposal" means a Takeover
Proposal relating to a Significant Acquisition Transaction;
(e) the term "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
(f) 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.
SECTION 9.16 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.
SECTION 9.17 Parent Guarantee. Parent hereby guarantees the due
performance of any and all obligations and liabilities of the Purchaser under or
arising out of this Agreement and the transactions contemplated hereby.
46
<PAGE> 47
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.
RSA HOLDINGS CORP. OF DELAWARE
By: /s/ Adam L. Suttin
------------------------------------
Name: Adam L. Suttin
Title:
RSA ACQUISITION CORP.
By: /s/ Adam L. Suttin
------------------------------------
Name: Adam L. Suttin
Title:
AMERICAN SAFETY RAZOR COMPANY
By: /s/ Jonathan F. Boucher
------------------------------------
Name: Jonathan F. Boucher
Title:
47
<PAGE> 48
ANNEX I
Offer Conditions
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-l(c) under the Exchange Act
(relating to Purchaser's obligation to pay for or return tendered Shares
promptly after termination or withdrawal of the Offer), pay for any Shares
tendered pursuant to the Offer, and may postpone the acceptance for payment or,
subject to the restriction referred to above, payment for any Shares tendered
pursuant to the Offer, and may amend or terminate the Offer (whether or not any
Shares have theretofore been purchased or paid for) to the extent permitted by
the Merger Agreement if, (i) at the expiration of the Offer, a number of shares
of Company Common Stock which constitutes more than 50% of the voting power
(determined on a fully-diluted basis), on the date of purchase, of all the
securities of the Company entitled to vote generally in the election of
directors or in a merger shall not have been validly tendered and not properly
withdrawn prior to the expiration of the Offer (the "Minimum Condition"), or
(ii) at any time on or after the date of this Agreement and prior to the
acceptance for payment of Shares, any of the following conditions occurs or has
occurred:
(a) there shall have been instituted or pending any action or
proceeding brought by any governmental authority before any federal or
state court, or any order or preliminary or permanent injunction entered
and continuing in any action or proceeding before any federal or state
court or governmental, administrative or regulatory authority or agency,
or any statute, rule, regulation, legislation, interpretation, judgment
or order enacted, entered, enforced, promulgated, amended, issued and
continuing and applicable to Parent, Purchaser, the Company or any
subsidiary or affiliate of Purchaser or the Company or the Offer or the
Merger, by any legislative body, court, government or governmental,
administrative or regulatory authority or agency which would reasonably
be expected to have the effect of: (i) making illegal, or otherwise
directly or indirectly restraining or prohibiting or making materially
more expensive the making of the Offer, the acceptance for payment of,
or payment for the Shares by Parent or the Purchaser or the consummation
of any of the transactions contemplated by the Merger Agreement; (ii)
prohibiting or materially limiting the ownership or operation by the
Company or any of its subsidiaries or Parent, Purchaser or any of
Parent's affiliates of all or any material portion of the business or
assets of the Company or any of its subsidiaries, taken as a whole, or
any of its affiliates or compelling Parent, Purchaser or any of Parent's
affiliates to dispose of or hold separate all or any material portion of
the business or assets of the Company or any of its subsidiaries or
Parent, or any of its affiliates, as a result of the transactions
contemplated by the Offer or the Merger Agreement; (iii) imposing or
confirming limitations on the ability of Parent, Purchaser or any of
Parent's affiliates effectively to acquire or hold or to exercise full
rights of ownership of Shares, including without limitation the right to
vote any Shares acquired or owned by Parent or Purchaser or any of its
affiliates on all matters properly presented to the stockholders of the
Company, including without limitation the adoption and approval of the
Agreement and
1
<PAGE> 49
the Merger or the right to vote any shares of capital stock of any
subsidiary directly or indirectly owned by the Company; or (iv)
requiring divestiture by Parent or Purchaser of any Shares;
(b) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the
United States, (ii) a material adverse change in or material disruption
of conditions in the market for syndicated bank credit facilities or the
financial, banking or capital markets generally, (iii) a commencement
and continuation of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United
States which would have a Material Adverse Effect on the Company or (iv)
in the case of any of the foregoing existing at the time of commencement
of the Offer, a material acceleration or worsening thereof;
(c) (i) it shall have been publicly disclosed or Purchaser shall
have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under
the Exchange Act) of more than 25% of the outstanding Shares has been
acquired by any corporation (including the Company or any of its
subsidiaries or affiliates), partnership, person or other entity or
group (as defined in Section 13(d)(3) of the Exchange Act), other than
Parent or its affiliates, or the Principal Holders or any of their
respective affiliates (but only with respect to the Common Shares that
they beneficially own on the date hereof), or (ii) (A) the Board of
Directors of the Company or any committee thereof shall have withdrawn
or modified in a manner adverse to Parent or Purchaser the approval or
recommendation of the Offer, the Merger or the Merger Agreement, or
approved or recommended any Takeover Proposal or any other acquisition
of Shares other than the Offer and the Merger, (B) any such corporation,
partnership, person or other entity or group shall have entered into a
definitive agreement or an agreement in principle with the Company with
respect to an Acquisition Transaction, or (C) the Board of Directors of
the Company or any committee thereof shall have resolved to do any of
the foregoing;
(d) any of the representations and warranties of the Company set
forth in the Merger Agreement that are qualified as to materiality or
Material Adverse Effect shall not be true and correct, or any such
representations and warranties that are not so qualified shall not be
true and correct in any material respect, in each case as if such
representations and warranties were made at the time of such
determination;
(e) the Company shall have failed to perform in any material
respect any obligation or to comply in any material respect with any
agreement or covenant of the Company to be performed or complied with by
it under the Merger Agreement;
(f) the Merger Agreement shall have been terminated in accordance
with its terms or the Offer shall have been terminated with the consent
of the Company; or
2
<PAGE> 50
(g) any waiting periods under the HSR Act applicable to the
purchase of Shares pursuant to the Offer shall not have expired or been
terminated, or any material approval, permit, authorization or consent
of any domestic or foreign governmental, administrative or regulatory
agency (federal, state, local, provincial or otherwise) shall not have
been obtained on terms satisfactory to the Parent in its reasonable
discretion;
and, in addition, which, in the case of (a) through (g), in the reasonable, good
faith judgement of Parent or the Purchaser, and regardless of the circumstances
(including any action or inaction by Parent or Purchaser or any of its
affiliates) giving rise to any such conditions, makes it inadvisable to proceed
with the Offer and/or with such acceptance for payment of or payment for Shares
or to proceed with the Merger.
The foregoing conditions are for the sole 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 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 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 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.
3
<PAGE> 1
EXHIBIT 11(C)(2)
SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT (this "Agreement"), dated as of February 12,
1999, by and among RSA Holdings Corp. of Delaware, a Delaware corporation
("Parent"), RSA Acquisition Corp., a Delware corporation ("Purchaser"), and the
other parties signatory hereto (each, a "Stockholder").
RECITALS
Concurrently herewith, Parent, Purchaser and American Safety Razor
Company, a Delaware corporation (the "Company"), are entering into an Agreement
and Plan of Merger, dated as of the date hereof (the "Merger Agreement";
capitalized terms used but not defined herein shall have the meanings set forth
in the Merger Agreement), pursuant to which Purchaser agrees to make an offer
(the "Offer") for all outstanding shares of Common Stock, par value $0.01 per
share (the "Common Stock"), of the Company, at a price of $14.125 per share, net
to the Stockholder in cash, to be followed by a merger (the "Merger") of
Purchaser with and into the Company.
As a condition to its willingness to enter into the Merger Agreement
and make the Offer, Parent and Purchaser have required that each Stockholder
agree, and each Stockholder has agreed, among other things, to tender into the
Offer and to grant an irrevocable proxy with respect to the number of shares of
Common Stock of such Stockholder set forth on Annex A hereto, together with any
additional shares when and if they are acquired, including, without limitation,
pursuant to Section 5.5 hereof (such shares, and any additional shares when and
if they are acquired, being referred to herein as the "Shares"), on the terms
and conditions provided for herein.
In consideration of this Agreement, Purchaser has entered into the
Merger Agreement and agreed to have the Company pay the TJC Amount, as a
condition to the Merger Agreement.
The Board of Directors of the Company has approved this Agreement, the
Merger Agreement and the transactions contemplated hereby and thereby so as to
render inapplicable Section 203 of the Delaware General Corporation Law ("DGCL")
to the transactions contemplated hereby and thereby.
AGREEMENT
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
1. Agreement to Tender. Each Stockholder hereby agrees to validly
tender (or cause the record owner of such shares to validly tender), pursuant to
and in accordance with the terms of the Offer, as soon as practicable after
commencement of the Offer but in no event later than 15 business days after the
date of commencement of the Offer, all of such Stockholder's Shares by physical
delivery of the certificates therefor (or by book entry or appropriate
instructions to brokers or custodians thereof, as the case may be) and to not
withdraw such Shares, except following termination of this Agreement pursuant to
Section 7 hereof. Each Stockholder hereby
<PAGE> 2
acknowledges and agrees that Parent's and the Purchaser's obligation to accept
for payment and pay for the Shares is subject to the terms and conditions of the
Offer. Stockholder hereby permits Parent and the Purchaser to publish and
disclose in the Offer Documents and, if approval of the Company's stockholders
is required under applicable law, the Proxy Statement (including all documents
and schedules filed with the Securities and Exchange Commission) his identity
and ownership of the Shares and the nature of his commitments, arrangements and
understandings under this Agreement.
2. Irrevocable Proxy. Each Stockholder hereby irrevocably appoints
Purchaser or any designee of Purchaser the lawful agent, attorney and proxy of
such Stockholder, during the term of this Agreement at any meeting of the
Stockholders of the Company, however called, or in connection with any written
consent of the Stockholders of the Company, to vote (or cause to be voted) the
Shares held of record or beneficially by such Stockholder (i) in favor of the
Merger, the execution and delivery by the Company of the Merger Agreement and
the approval of the terms thereof and each of the other actions contemplated by
the Merger Agreement, this Agreement and any actions required in furtherance
hereof and thereof; (ii) against any action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or this Agreement; and (iii)
except as specifically requested in writing by Purchaser in advance, against the
following actions (other than the Offer, Merger and the transactions
contemplated by the Merger Agreement): (1) any extraordinary corporate
transaction, such as a merger, consolidation or other business combination
involving the Company or its subsidiaries; (2) a sale, lease or transfer of a
material amount of assets of the Company or its subsidiaries or a
reorganization, recapitalization, dissolution or liquidation of the Company or
its subsidiaries; (3) (a) any change in the majority of the Board of Directors
of the Company; (b) any material change in the present capitalization of the
Company or any amendment of the Company's certificate of incorporation; (c) any
other material change in the Company's corporate structure or business; or (d)
any other action which, is intended, or could reasonably be expected, to impede,
interfere with, delay, postpone, discourage or materially adversely affect the
Offer, Merger or the transactions contemplated by the Merger Agreement or this
Agreement or the contemplated economic benefits of any of the foregoing. Each
Stockholder intends this proxy to be irrevocable and coupled with an interest
and will take such further action or execute such other instruments as may be
necessary to effectuate the intent of this proxy and hereby revokes any proxy
previously granted by it with respect to the Shares. Each Stockholder shall not
hereafter, unless and until this Agreement terminates pursuant to Section 7.6
hereof, purport to vote (or execute a consent with respect to) such Shares
(other than through this irrevocable proxy) or grant any other proxy or power of
attorney with respect to any Shares, deposit any Shares into a voting trust or
enter into any agreement (other than this Agreement), arrangement or
understanding with any person, directly or indirectly, to vote, grant any proxy
or give instructions with respect to the voting of such Shares.
-2-
<PAGE> 3
3. Representations and Warranties.
3.1. Representations and Warranties of Purchaser. Each of Parent and
Purchaser hereby represents and warrants to each Stockholder as follows:
(a) Due Authorization. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by the Board of Directors of
Purchaser and Parent, as the case may be, and no other corporate
proceedings on the part of Parent or Purchaser, as the case may be, are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed
and delivered by Parent and Purchaser, as the case may be, and
constitutes a valid and binding agreement of Parent and Purchaser, as
the case may be, enforceable against each 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
enforcement of creditors' rights generally and (ii) is subject to
general principles of equity.
(b) No Conflicts. Except for (i) filings under the HSR Act, if
applicable, (ii) the applicable requirements of the Exchange Act, and
the Securities Act of 1933, as amended (the "Securities Act"), (iii)
the applicable requirements of state securities, takeover or Blue Sky
laws and (iv) such notifications, filings, authorizing actions, orders
and approvals as may be required under other laws, (A) no filing with,
and no permit, authorization, consent or approval of, any state,
federal or foreign public body or authority is necessary for the
execution of this Agreement by Purchaser or Parent, as the case may be,
and the consummation by each of the transactions contemplated hereby
and (B) neither the execution and delivery of this Agreement by
Purchaser or Parent, as the case may be, nor the consummation by it of
the transactions contemplated hereby nor compliance by it with any of
the provisions hereof shall (1) conflict with or result in any breach
of any provision of its certificate of incorporation or by-laws (or
similar documents), (2) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default
(or give rise to any third party right of termination, cancellation,
material modification or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
license, contract, agreement or other instrument or obligation to which
it is a party or by which it or any of its properties or assets may be
bound or (3) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to it or any of its properties or assets,
except in the case of (2) or (3) for violations, breaches or defaults
which would not in the aggregate materially impair the ability of
Purchaser or Parent, as the case may be, to perform its obligations
hereunder.
(c) Good Standing. Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under
the laws of Delaware and has all requisite corporate power and
authority to execute and deliver this Agreement.
-3-
<PAGE> 4
3.2. Representations and Warranties of Stockholder. Each Stockholder
hereby severally represents and warrants to Parent and Purchaser as follows:
(a) Ownership of Shares and Options. Subject to Section 4.3,
Stockholder (or accounts or trusts controlled or beneficially owned by
Stockholder) is the owner of the Shares and options to acquire Shares
("Stock Options") set forth on Annex A hereto and has the power to vote
and dispose of such Shares. To Stockholder's knowledge, such Shares
are, or upon issuance will be, validly issued, fully paid and
nonassessable, with no personal liability attaching to the ownership
thereof. Stockholder has, or upon issuance will have, good title to the
Shares, free and clear of any agreements, liens, adverse claims or
encumbrances whatsoever with respect to the ownership of or the right
to vote such Shares.
(b) Power; Binding Agreement. Stockholder has the legal
capacity, power and authority to enter into and perform all of its
obligations under this Agreement. The execution, delivery and
performance of this Agreement by Stockholder will not violate any other
agreement to which Stockholder is a party including, without
limitation, any voting agreement, stockholders agreement or voting
trust. This Agreement has been duly and validly authorized, executed
and delivered by Stockholder and constitutes a valid and binding
agreement of Stockholder, enforceable against Stockholder 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 enforcement of creditors' rights generally and (ii) is
subject to general principles of equity.
(c) No Conflicts. Except for (i) filings under the HSR Act, if
applicable, (ii) the applicable requirements of the Exchange Act and
the Securities Act, (iii) the applicable requirements of state
securities, takeover or Blue Sky laws, (iv) such notifications,
filings, authorizing actions, orders and approvals as may be required
under other laws, (A) no filing with, and no permit, authorization,
consent or approval of, any state, federal or foreign public body or
authority is necessary for the execution of this Agreement by
Stockholder and the consummation by Stockholder of the transactions
contemplated hereby and (B) neither the execution and delivery of this
Agreement by Stockholder nor the consummation by Stockholder of the
transactions contemplated hereby nor compliance by Stockholder with any
of the provisions hereof shall (1) conflict with or result in any
breach of any provision of the certificate of incorporation, by-laws,
trust or charitable instruments (or similar documents) of Stockholder,
(2) result in a violation or breach of, or constitute (with or without
notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, contract, agreement or other
instrument or obligation to which Stockholder is a party or by which he
or it or any of his or its properties or assets may be bound or (3)
violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Stockholder or any of his or its properties or
assets, except in the case of (2)
-4-
<PAGE> 5
or (3) for violations, breaches or defaults which would not in the
aggregate materially impair the ability of Stockholder to perform his
or its obligations hereunder.
4. Certain Covenants of Stockholder. Each Stockholder hereby severally
covenants and agrees as follows:
4.1. No Solicitation. Neither Stockholder nor any officer, director,
employee, representative or agent of Stockholder shall, directly or indirectly,
solicit, facilitate, participate in or initiate any inquiries or the making of
any proposal by any person or entity (other than Purchaser or any affiliate of
Purchaser) which constitutes, or may reasonably be expected to lead to, (a) any
sale of the Shares or (b) any Takeover Proposal or Acquisition Transaction. If
Stockholder, or any officer, director, employee, representative or agent of
Stockholder, receives an inquiry or proposal with respect to the sale of Shares,
then Stockholder shall promptly inform Purchaser of the terms and conditions, if
any, of such inquiry or proposal and the identity of the person making it.
Stockholder shall, and shall cause its officers, directors, employees,
representatives and agents to, immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. This Section 4.1 will not bind
or apply to any person in their capacity as director of the Company.
4.2. Restriction on Transfer, Proxies and NonInterference. Stockholder
hereby agrees, while this Agreement is in effect, and except as contemplated
hereby, not to (a) sell, transfer, pledge, encumber, assign or otherwise dispose
of, or enter into any contract, option or other arrangement or understanding
with respect to the sale, transfer, pledge, encumbrance, assignment or other
disposition of, any of the Shares or Stock Options or (b) grant any proxies,
deposit any Shares into a voting trust or enter into a voting agreement with
respect to any Shares or (c) take any action that would make any representation
or warranty of such Stockholder contained herein untrue or incorrect or have the
effect of preventing or disabling such Stockholder from performing his
obligations under this Agreement.
4.3. Legending of Certificates; Nominees Shares. If requested by
Purchaser, Stockholder agrees to submit to Purchaser contemporaneously with or
promptly following execution of this Agreement all certificates representing the
Shares so that Purchaser may note thereon a legend referring to the proxy and
other rights granted to it by this Agreement. If any of the Shares beneficially
owned by Stockholder are held of record by a brokerage firm in "street name"or
in the name of any other nominee (a "Nominee", and, as to such Shares, "Nominee
Shares"), Stockholder agrees that, upon written notice by Purchaser requesting
it, Stockholder will within five days of the giving of such notice execute and
deliver to Purchaser a limited power of attorney in such form as shall be
reasonably satisfactory to Purchaser enabling Purchaser to require the Nominee
to (i) grant to Purchaser an irrevocable proxy to the same effect as Section 1
and 2 hereof with respect to the Nominee Shares held by such Nominee, (ii)
tender such Nominee Shares in the Offer pursuant to Section 1 hereof, and (iii)
submit to Purchaser the certificates representing such Nominee Shares for
notation of the above-referenced legend thereon.
-5-
<PAGE> 6
4.4. Stop Transfer Order. In furtherance of this Agreement,
concurrently herewith, Stockholder shall and hereby does authorize the Company's
counsel to notify the Company's transfer agent that there is a stop transfer
order with respect to all of the Shares (and that this Agreement places limits
on the voting and transfer of such shares).
4.5. Stock Options. Each Stockholder that owns any Stock Options hereby
agrees not to take any action that would affect the full vesting or free
exercisability of such Stock Options. Each Stockholder that owns any Stock
Options hereby agrees with Purchaser that, if requested by Purchaser at any time
during the period from and including the Exercise Date to the Expiration Date
when Purchaser desires to exercise the Option with respect to any Shares
underlying any Stock Options, the Stockholder will exercise such number of fully
vested and freely exercisable Stock Options (including any such Stock Options
that may become fully vested and freely exercisable at any subsequent time
between the Exercise Date and the Expiration Date) as may be necessary to enable
Purchaser to acquire such Shares.
5. Further Assurances. From time to time, at the other party's request
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Purchaser good title to any Shares
purchased hereunder.
6. Adjustments to Prevent Dilution, Etc. In the event of a stock
dividend or distribution, or any change in the Company's Common Stock by reason
of any stock dividend, split-up, reclassification, recapitalization, combination
or the exchange of shares, the term "Shares" shall be deemed to refer to and
include the Shares as well as all such stock dividends and distributions and any
shares into which or for which any or all of the Shares may be changed or
exchanged. In such event, the amount to be paid per share by Purchaser shall be
proportionately adjusted.
7. Miscellaneous.
7.1. Entire Agreement; Assignment. This Agreement (i) constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and (ii) shall not
be assigned by operation of law or otherwise, provided that Purchaser may assign
its rights and obligations hereunder to any direct or indirect wholly owned
parent company or subsidiary of Purchaser, but no such assignment shall relieve
Purchaser of its obligations hereunder if such assignee does not perform such
obligations.
7.2. Amendments. This Agreement may not be modified, amended, altered
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
7.3. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received
-6-
<PAGE> 7
if so given) by hand delivery, telegram, telex or telecopy, or by mail
(registered or certified mail, postage prepaid, return receipt requested) or by
any courier service, such as Federal Express, providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
following addresses:
If to Stockholder: At such Stockholder's address set forth
on Annex A hereto
If to Parent or Purchaser: RSA Holdings Corp. of Delaware
c/o J.W. Childs Associates, L.P.
One Federal Street, 21st Floor
Boston, MA 02110
Facsimile No.: (617) 753-1101
Attention: Adam Suttin
copy to: Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Facsimile No.: (212) 455-2502
Attention: Mario Ponce, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
7.4. 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.
7.5. Cooperation as to Regulatory Matters. If so requested by
Purchaser, promptly after the date hereof, Stockholder will use its reasonable
best efforts to cause it and the Company (if required) to make all filings which
are required under the HSR Act and applicable requirements and to seek all
regulatory approvals required in connection with the transactions contemplated
hereby. The parties shall furnish to each other such necessary information and
reasonable assistance as may be requested in connection with the preparation of
filings and submissions to any governmental agency, including, without
limitation, filings under the provisions of the HSR Act. Stockholder shall also
use its reasonable best efforts to cause the Company to supply Purchaser with
copies of all correspondence, filings or communications (or memoranda setting
forth the substance thereof) between the Company and its representatives and the
Federal Trade Commission, the Department of Justice and any other governmental
agency or authority and members of their respective staffs with respect to this
Agreement and the transactions contemplated hereby.
7.6. Termination. This Agreement shall terminate on the earlier of (i)
the Effective Time or (ii) the termination of the Merger Agreement in accordance
with its terms, provided, that such termination will not terminate or affect
Section 3 thereof.
-7-
<PAGE> 8
7.7. Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore, each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
7.8. Counterparts. This Agreement may be executed in two counterparts,
each of which shall be deemed to be an original, but both of which shall
constitute one and the same Agreement.
7.9. Descriptive Headings. The descriptive headings used 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.
7.10. Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
-8-
<PAGE> 9
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
each of the parties hereto, all as of the date first above written.
RSA HOLDINGS CORP. OF DELAWARE
By: /s/ Adam L. Suttin
--------------------------------------
Name: Adam L. Suttin
Title:
RSA ACQUISITION CORP.
By: /s/ Adam L. Suttin
--------------------------------------
Name: Adam L. Suttin
Title:
<PAGE> 10
JOHN W. JORDAN
By: /s/ John W. Jordan
--------------------------------------
DAVID W. ZALAZNICK
By: /s/ David W. Zalaznick
--------------------------------------
JONATHAN F. BOUCHER
By: /s/ Jonathan F. Boucher
--------------------------------------
JOHN R. LOWDEN
By: /s/ John R. Lowden
--------------------------------------
THOMAS H. QUINN
By: /s/ Thomas H. Quinn
--------------------------------------
ADAM MAX
By: /s/ Adam Max
--------------------------------------
<PAGE> 11
LEUCADIA NATIONAL CORP.
By: /s/ Joseph A. Orlando
-------------------------------------
Name: Joseph A. Orlando
Title: Vice President and CEO
JZ Equity Partners PLC
By: /s/ James E. Jordon
-------------------------------------
Name:
Title:
WILLIAM C. WEATHERSBY
By: /s/ William C. Weathersby
-------------------------------------
THOMAS G. KASVIN
By: /s/ Thomas G. Kasvin
-------------------------------------
<PAGE> 12
ANNEX A
<TABLE>
<CAPTION>
Number of Shares of
Number of Shares Common Stock Underlying
Stockholder Name of Common Stock Stock Options
- ---------------- --------------- -------------
<S> <C> <C>
John W. Jordan II 332,140 0
c/o The Jordan Company
767 Fifth Avenue
New York, NY 10153
David W. Zalaznick 303,140 0
c/o The Jordan Company
767 Fifth Avenue
New York, NY 10153
Jonathan F. Boucher 360,639 0
c/o The Jordan Company
767 Fifth Avenue
New York, NY 10153
John R. Lowden 184,860 0
c/o The Jordan Company
767 Fifth Avenue
New York, NY 10153
Thomas H. Quinn 175,200 0
c/o The Jordan Company
767 Fifth Avenue
New York, NY 10153
Adam Max 94,346 0
c/o The Jordan Company
767 Fifth Avenue
New York, NY 10153
Leucadia National Corp. 419,233 0
c/o The Jordan Company
767 Fifth Avenue
New York, NY 10153
</TABLE>
<PAGE> 13
<TABLE>
<CAPTION>
Number of Shares of
Number of Shares Common Stock Underlying
Stockholder Name of Common Stock Stock Options
- ---------------- --------------- -------------
<S> <C> <C>
MCIT PLC 245,496 0
c/o The Jordan Company
767 Fifth Avenue
New York, NY 10153
William C. Weathersby 169,000 60,000
c/o American Safety Razor Company
One Razor Blade Lane
Verona, VA 24482
Thomas G. Kasvin 27,600 65,000
c/o American Safety Razor Company
One Razor Blade Lane
Verona, VA 244820
</TABLE>
