<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
OUTBOARD MARINE CORPORATION
(Name of Subject Company)
GREENMARINE ACQUISITION CORP.
A Wholly-Owned Subsidiary of
GREENMARINE HOLDINGS LLC
(Bidders)
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
<TABLE>
<CAPTION>
<S> <C> <C>
Greenlake Holdings LLC Greenhouse Partners, L.P. Greenhut Overseas, L.L.C.
Greenway Partners, L.P. Greenhut, LLC Alfred D. Kingsley
Greentree Partners, L.P. Greenbelt Corp. Gary K. Duberstein
Greensea Offshore, L.P.
and
</TABLE>
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Initial Filing)
<TABLE>
<CAPTION>
<S> <C> <C>
Greenmarine Holdings LLC QIH Management Investor, L.P. Stanley F. Drunkenmiller
Greenmarine Acquisition Corp. QIH Management Inc. Quasar International Fund N.V.
Quantum Industrial Holdings Ltd. Soros Fund Management LLC Quasar International Partners C.V.
Quantum Industrial Partners LDC George Soros Quaser Strategic Partners LDC
</TABLE>
Common Stock, $.15 Par Value
----------------------------
(Title of Class of Securities)
690020102
-------------------------------------
(CUSIP Number of Class of Securities)
Gary K. Duberstein, Esq.
GREENMARINE ACQUISITION CORP.
277 Park Avenue, 27th Floor
New York, New York 10172
(212) 350-5100
---------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications on Behalf of Bidder)
Copies to:
David E. Zeltner, Esq. Patrick J. Dooley, Esq.
WEIL, GOTSHAL & MANGES LLP AKIN, GUMP, STRAUSS, HAUER & FELD LLP
767 Fifth Avenue 590 Madison Avenue
New York, New York 10153 New York, New York 10022
(212) 310-8000 (212) 872-1000
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
Transaction
Valuation 327,995,352* Amount of Filing Fee 65,600**
- --------------------------------------------------------------------------------
/ / 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: None Filing Party: N/A
-------------- ----------------
Form or registration no.: N/A Date filed: N/A
------------ ----------------
- ------------
* Pursuant to, and as provided by, Rule 0-11(d), and for the purpose of
calculating filing fees only, this amount assumes the purchase at $18.00
cash per share of 18,221,964 shares of the common stock of the Subject
Company, par value $0.15 per share ("Shares"), which is equal to the total
number of Shares outstanding as reported in the Quarterly Report on Form
10-Q of Outboard Marine Corporation for the quarter ended June 30, 1997,
less 2,000,000 Shares owned beneficially by Bidders and their affiliates.
** 1/50 of 1% of Transaction Valuation.
================================================================================
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS GREENLAKE HOLDINGS LLC
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 2,000,000
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 2,000,000
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 2,000,000
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 9.9%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON OO
- --------------------------------------------------------------------------------
2
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS GREENWAY PARTNERS, L.P.
S.S. OR I.R.S. IDENTIFICATION 13-3714238
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS N/A
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON PN
- --------------------------------------------------------------------------------
3
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS GREENTREE PARTNERS, L.P.
S.S. OR I.R.S. IDENTIFICATION 13-3752875
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS N/A
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON PN
- --------------------------------------------------------------------------------
4
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS GREENHOUSE PARTNERS, L.P.
S.S. OR I.R.S. IDENTIFICATION 13-3793447
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS N/A
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON PN
- --------------------------------------------------------------------------------
5
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS GREENHUT, L.L.C.
S.S. OR I.R.S. IDENTIFICATION 13-3793450
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS N/A
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON OO
- --------------------------------------------------------------------------------
6
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS GREENBELT CORP.
S.S. OR I.R.S. IDENTIFICATION 13-3791931
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS N/A
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO
- --------------------------------------------------------------------------------
7
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS GREENSEA OFFSHORE, L.P.
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS N/A
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON PN
- --------------------------------------------------------------------------------
8
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS GREENHUT OVERSEAS, L.L.C.
S.S. OR I.R.S. IDENTIFICATION 13-3868906
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS N/A
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES /X/
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON OO
- --------------------------------------------------------------------------------
9
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS ALFRED D. KINGSLEY
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION United States
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 2,000,000
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 2,000,000
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 2,000,000
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 9.9%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON IN
- --------------------------------------------------------------------------------
10
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS GARY K. DUBERSTEIN
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION United States
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 2,000,000
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 2,000,000
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 2,000,000
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 9.9%
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON IN
- --------------------------------------------------------------------------------
11
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS GREENMARINE HOLDING LLC
S.S. OR I.R.S. IDENTIFICATION 13-3960749
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON OO
- --------------------------------------------------------------------------------
12
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS GREENMARINE ACQUISITION CORP.
S.S. OR I.R.S. IDENTIFICATION 13-3960743
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) /X/
(b) / /
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS OO,BF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO
- --------------------------------------------------------------------------------
13
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS QUANTUM INDUSTRIAL HOLDINGS LTD.
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION British Virgin Islands
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO
- --------------------------------------------------------------------------------
14
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS QUANTUM INDUSTRIAL PARTNERS LDC
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS WC
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON OO; IV
- --------------------------------------------------------------------------------
15
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS QIH MANAGEMENT INVESTOR, L.P.
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON PN; IA
- --------------------------------------------------------------------------------
16
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS QIH MANAGEMENT, INC.
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO
- --------------------------------------------------------------------------------
17
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS SOROS FUND MANAGEMENT, LLC
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON OO; IA
- --------------------------------------------------------------------------------
18
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS MR. GEORGE SOROS
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION United States
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON IA
- --------------------------------------------------------------------------------
19
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS MR. STANLEY F. DRUCKENMILLER
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON IA
- --------------------------------------------------------------------------------
20
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS QUASAR INTERNATIONAL FUND N.V.
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON CO
- --------------------------------------------------------------------------------
21
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS QUASAR INTERNATIONAL PARTNERS, C.V.
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS OO
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Netherlands Antilles
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON PN
- --------------------------------------------------------------------------------
22
<PAGE>
- ------------------------ ------------------------
CUSIP No. 690020102 14D-1 Page_____ of _____ Pages
- ------------------------ ------------------------
- --------------------------------------------------------------------------------
1. NAME OF REPORTING PERSONS QUASAR STRATEGIC PARTNERS LDC
S.S. OR I.R.S. IDENTIFICATION
NO. OF ABOVE PERSONS
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) /X/
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(E) OR 2(F) / /
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands
- --------------------------------------------------------------------------------
7. SOLE VOTING POWER 0
NUMBER OF
SHARES --------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER 0
OWNED BY
EACH --------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER 0
PERSON
WITH --------------------------------------------------------------
10. SHARED DISPOSITIVE POWER 0
- --------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON 0
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN
ROW (11) 0
- --------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON OO; IV
- --------------------------------------------------------------------------------
23
<PAGE>
This Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1")
relates to the offer by Greenmarine Acquisition Corp., a Delaware corporation
(the "Purchaser") and a wholly owned subsidiary of Greenmarine Holdings LLC, a
Delaware limited liability company ("Parent"), the members of which are Quasar
Strategic Partners LDC, a Cayman Islands limited duration company ("QSP"),
Quantum Industrial Partners LDC, a Cayman Islands limited duration company
("QIP"), and Greenlake Holdings LLC, a Delaware limited liability company
("Greenlake"), to purchase all outstanding shares of common stock, $0.15 par
value per share (the "Shares") of Outboard Marine Corporation, a Delaware
corporation (the "Company"), including the associated preferred stock purchase
rights (the "Rights") issued pursuant to the Rights Agreement, dated as of
April 24, 1996 (as amended, the "Rights Agreement"), by and between the Company
and First Chicago Trust Company of New York, as Rights Agent, at $18 per Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated August 8, 1997 (the "Offer to Purchase")
and in the related Letter of Transmittal (which together constitute the
"Offer"). The Purchaser, the Parent, QSP, QIP, and Greenlake are referred to
collectively herein as the "Reporting Persons". This Schedule 14D-1 also
constitutes Amendment No. 3 to the Statement on Schedule 13D previously filed
by Greenway Partners, L.P., a Delaware limited partnership, Greentree Partners,
L.P., a Delaware limited partnership, Greenhouse Partners, L.P., a Delaware
limited partnership, Greenhut, LLC, a Delaware limited liability company,
Greenbelt Corp., a Delaware corporation, Greensea Offshore, L.P., a Cayman
Islands limited partnership, Greenhut Overseas, L.L.C., a Delaware limited
liability company (collectively, the "Transferors"), Alfred D. Kingsley and
Gary K. Duberstein. The Transferors, as indicated in Item 6(b) below,
transferred beneficial ownership of all of their Shares, which in the aggregate
constitutes 2,000,000 Shares (and, as described in Item 6(a) below, represents
9.9% of the issued and outstanding Shares), to Greenlake, which may be deemed
to be beneficially owned by Messrs. Kingsley and Duberstein and may be deemed
to be part of a group with Messrs. Kingsley and Duberstein (the "Greenlake
Group"). In addition, this Schedule 14D-1 constitutes the initial filing of a
statement on Schedule 13D by Parent, Purchaser, QSP, QIP, Quantum Industrial
Holdings Ltd., a British Virgin Islands corporation, QIH Management Investor,
L.P., a Delaware limited partnership, QIH Management Inc., a Delaware
corporation, Soros Fund Management LLC, a Delaware limited liability company,
Quasar International Fund N.V., a Netherlands Antilles limited liability
company, Quasar International Partners C.V., a Netherlands Antilles limited
partnership, George Soros and Stanley F. Druckenmiller, who may be deemed to be
part of a group, for purposes of Schedule 13D, with the Greenlake Group by
virtue of the contractual arrangements relating to the formation of Parent and
Purchaser and the Offer, as more fully described or incorporated by reference
into this Schedule 14D-1; however, none of such persons affirms the existence
of any such group. The item numbers and responses thereto below are in
accordance with the requirements of Schedule 14D-1.
Information relating to members of the Greenlake Group in this Schedule
14D-1 and the related Offer to Purchase has been provided by Greenlake Holdings
LLC. Information relating to persons other than the Greenlake Group in this
Schedule 14D-1 and the related Offer to Purchase has been provided individually
by such person.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Outboard Marine Corporation. The
address of the principal executive offices of the Company is set forth in
Section 8 ("Certain Information Concerning the Company") of the Offer to
Purchase and is incorporated herein by reference.
(b) The exact title of the class of equity securities being sought in the
Offer is the Common Stock, par value $0.15 per share, of the Company. The
information set forth in the Introduction to 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) through (d), and (g): The information set forth in the Introduction
and Section 9 ("Certain Information Concerning the Purchaser and the Parent")
of the Offer to Purchase, and in Schedule I thereto, is incorporated herein by
reference.
24
<PAGE>
(e) and (f): None of the Purchaser or Parent, nor, to the best of their
knowledge, any of the persons listed in Schedule I of the Offer to Purchase,
has during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to
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) None.
(b) The information set forth in Section 9 ("Certain Information
Concerning the Purchaser and the Parent") Section 10 ("Background of the Offer;
Contacts with the Company") of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b): The information set forth in Section 12 ("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) through (e): The information set forth in the Introduction, Section 10
("Background of the Offer; Contacts with the Company") and Section 11 ("Purpose
of the Offer and the Merger; Plans for the Company") of the Offer to Purchase
is incorporated herein by reference. Except as set forth in the Introduction,
Section 10, and Section 11 of the Offer to Purchase, neither the Purchaser nor
the Parent has any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation or sale or transfer of a material amount of assets involving the
Company, or any other material changes in the Company's capitalization,
dividend policy, corporate structure or business or composition of its
management or personnel.
(f) and (g): The information set forth in Section 7 ("Effect of the Offer
on the Market for the Shares; Stock Exchange Listing, Exchange Act
Registration; Margin Regulations") of the Offer to Purchase is incorporated
herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) As of the date of this Schedule 14D-1, the Reporting Persons
beneficially owned in the aggregate 2,000,000 Shares constituting 9.9% of
outstanding Shares (the percentage of Shares owned being based upon 20,221,964
Shares outstanding as of July 31, 1997 as set forth in the Quarterly Report on
Form 10-Q of the Company for the quarter ended June 30, 1997. The information
set forth in Section 9 ("Certain Information Concerning the Purchaser and the
Parent") of the Offer to Purchase is incorporated herein by reference.
(b) The information set forth in Schedule II ("Transaction in Shares
within 60 days prior to the Offer") 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 and Section 9 ("Certain
Information Concerning the Purchaser and the Parent") 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 in Section 16 ("Certain
Fees and Expenses") of the Offer to Purchase is incorporated herein by
reference.
25
<PAGE>
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information Concerning
the Purchaser and the Parent") of the Offer to Purchase is incorporated herein
by reference.
The incorporation by reference herein of the above-mentioned financial
information does not constitute an admission that such information is material
to a decision by a security holder of the Company as whether to sell, tender or
hold securities being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) None.
(b) and (c): The information set forth in Section 15 ("Certain Regulatory
and Legal Matters") of the Offer to Purchase is incorporated herein by
reference.
(d) The information set forth in Section 7 ("Effect of the Offer on the
Market for the Shares; Stock Exchange Listing; Exchange Act Registration;
Margin Regulations") and Section 15 ("Certain Regulatory and Legal Matters") of
the Offer to Purchase is incorporated herein by reference.
(e) The information set forth in the Introduction and Section 11 ("Purpose
of the Offer and the Merger; Plans for the Company") of the Offer to Purchase
is incorporated herein by reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in their entirety.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated August 8, 1997.
(a)(2) Letter of Transmittal.
(a)(3) Letter from Greenmarine Acquisition Corp., to Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(4) Letter from Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees to Clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Announcement, dated August 8, 1997.
(a)(8) Press Release issued by the Purchaser on August 7, 1997.
(b)(1) Financing Commitment Letter, dated August 7, 1997, among Purchaser
and American Financial Group, Inc.
(c)(1) Operating Agreement of Greenmarine Holdings LLC dated August 7,
1997 by and among the members signatory thereto.
(d) None.
(e) Not applicable.
(f) Not applicable.
26
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: August 8, 1997 GREENLAKE HOLDINGS LLC
By: /s/ Gary K. Duberstein
-------------------------------
Gary K. Duberstein
Member
GREENWAY PARTNERS, L.P.
By: Greenhouse Partners, L.P.,
its general partner
By: /s/ Gary K. Duberstein
-------------------------------
Gary K. Duberstein
General Partner
GREENTREE PARTNERS, L.P.
By: Greenhut, L.L.C.,
its general partner
By: /s/ Gary K. Duberstein
-------------------------------
Gary K. Duberstein
Member
GREENHOUSE PARTNERS, L.P.
By: /s/ Gary K. Duberstein
-------------------------------
Gary K. Duberstein
General Partner
GREENHUT, L.L.C.
By: /s/ Gary K. Duberstein
-------------------------------
Gary K. Duberstein
Member
GREENBELT CORP.
By: /s/ Alfred D. Kingsley
-------------------------------
Alfred D. Kingsley
President
27
<PAGE>
GREENSEA OFFSHORE, L.P.
By: Greenhut Overseas, L.L.C.,
its investment general partner
By: /s/ Gary K. Duberstein
-------------------------------
Gary K. Duberstein
Member
GREENHUT OVERSEAS, L.L.C.
By: /s/ Gary K. Duberstein
-------------------------------
Gary K. Duberstein
Member
By: /s/ Alfred D. Kingsley
-------------------------------
Alfred D. Kingsley
By: /s/ Gary K. Duberstein
-------------------------------
Gary K. Duberstein
GREENMARINE HOLDINGS LLC
By: /s/ Gary K. Duberstein
-------------------------------
Gary K. Duberstein
Title: Member
GREENMARINE ACQUISITION CORP.
By: /s/ Gary K. Duberstein
-------------------------------
Gary K. Duberstein
Title: Vice-President
QUANTUM INDUSTRIAL HOLDINGS LTD.
By: /s/ Michael C. Neus
-------------------------------
Michael C. Neus
Attorney-in-Fact
QUANTUM INDUSTRIAL PARTNERS LDC
By: /s/ Michael C. Neus
-------------------------------
Michael C. Neus
Attorney-in-Fact
28
<PAGE>
QIH MANAGEMENT INVESTOR, L.P.
By: QIH Management, Inc.,
its General Partner
By: /s/ Michael C. Neus
-------------------------------
Michael C. Neus
Vice President
QIH MANAGEMENT, INC.
By: /s/ Michael C. Neus
-------------------------------
Michael C. Neus
Vice President
SOROS FUND MANAGEMENT LLC
By: /s/ Michael C. Neus
-------------------------------
Michael C. Neus
Assistant General Counsel
GEORGE SOROS
By: /s/ Michael C. Neus
-------------------------------
Michael C. Neus
Attorney-in-Fact
STANLEY F. DRUCKENMILLER
By: /s/ Michael C. Neus
-------------------------------
Michael C. Neus
Attorney-in-Fact
QUASAR INTERNATIONAL FUND N.V.
By: /s/ Michael C. Neus
-------------------------------
Michael C. Neus
Attorney-in-Fact
QUASAR INTERNATIONAL PARTNERS C.V.
By: /s/ Michael C. Neus
-------------------------------
Michael C. Neus
Attorney-in-Fact
29
<PAGE>
QUASAR STRATEGIC PARTNERS LDC
By: /s/ Michael C. Neus
-------------------------------
Michael C. Neus
Attorney-in-Fact
30
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description Page No.
- ------- ----------- --------
<S> <C> <C>
(a)(1) Offer to Purchase, dated August 8, 1997. --
(a)(2) Letter of Transmittal --
(a)(3) Letter from Greenmarine Acquisition Corp. to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees --
(a)(4) Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
to Clients --
(a)(5) Notice of Guaranteed Delivery --
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. --
(a)(7) Summary Announcement, dated August 8, 1997 --
(a)(8) Press Release issued by Purchaser on August 7, 1997. --
(b)(1) Financing Commitment Letter, dated August 7, 1997, among Purchaser and American
Financial Group, Inc. --
(c)(1) Operating Agreement of Greenmarine Holdings LLC dated August 7, 1997 by and
among the Members signatory thereto. --
(d) None. --
(e) Not applicable. --
(f) Not applicable. --
</TABLE>
<PAGE>
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
OUTBOARD MARINE CORPORATION
at
$18.00 Net Per Share
by
GREENMARINE ACQUISITION CORP.
a wholly-owned subsidiary of
GREENMARINE HOLDINGS LLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, SEPTEMBER 8, 1997,
UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF
SHARES THAT, WHEN ADDED TO THE NUMBER OF SHARES BENEFICIALLY OWNED BY THE
PURCHASER AND THE PARENT, WOULD REPRESENT 90% OF ALL OUTSTANDING SHARES ON THE
DATE OF PURCHASE AND, AS A RESULT THEREOF, THE PURCHASER BEING SATISFIED, IN
ITS SOLE DISCRETION, THAT ON THE DATE OF PURCHASE IT WILL BE ABLE TO CONSUMMATE
THE PROPOSED SECOND-STEP MERGER AS A "SHORT-FORM MERGER" PURSUANT TO THE
PROVISIONS OF SECTION 253 OF THE DELAWARE GENERAL CORPORATION LAW IMMEDIATELY
AFTER CONSUMMATION OF THE OFFER, (2) THE COMPANY'S PREFERRED STOCK PURCHASE
RIGHTS BEING REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY OR THE PURCHASER
BEING SATISFIED, IN ITS SOLE DISCRETION, THAT SUCH RIGHTS HAVE BEEN INVALIDATED
OR ARE OTHERWISE INAPPLICABLE TO THIS OFFER AND THE PROPOSED MERGER DESCRIBED
HEREIN, (3) THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE
PROPOSED MERGER CAN BE CONSUMMATED WITHOUT THE NEED FOR A SUPERMAJORITY VOTE OF
THE COMPANY'S STOCKHOLDERS PURSUANT TO ARTICLE EIGHTEENTH OF THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION, (4) THE PURCHASER SHALL HAVE RECEIVED
THE LOAN PROCEEDS COMMITTED TO BE PROVIDED BY AMERICAN FINANCIAL GROUP, INC.
("AFG") IN ACCORDANCE WITH THE COMMITMENT LETTER ISSUED BY AFG TO THE
PURCHASER, DATED AUGUST 7, 1997, (5) THE PURCHASER BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT, UPON CONSUMMATION OF THE OFFER AND THE MERGER, THE COMPANY
WILL NOT BE IN DEFAULT UNDER ANY INSTRUMENT EVIDENCING THE COMPANY'S THEN
OUTSTANDING INDEBTEDNESS, OR, IF IN DEFAULT, THE PURCHASER AND THE PARENT
HAVING OBTAINED, PRIOR TO THE EXPIRATION DATE, ON TERMS REASONABLY ACCEPTABLE
TO THE PARENT, SUFFICIENT FINANCING TO ENABLE THE COMPANY TO REFINANCE OR
REDEEM ANY SUCH INDEBTEDNESS UPON CONSUMMATION OF THE OFFER AND THE MERGER, AND
(6) THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE PREVIOUSLY
ANNOUNCED AGREEMENT AND PLAN OF MERGER BETWEEN THE COMPANY AND DETROIT DIESEL
CORPORATION HAS BEEN TERMINATED IN ACCORDANCE WITH ITS TERMS. THE OFFER IS ALSO
SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE
THE INTRODUCTION AND SECTIONS 1, 12, 14 AND 15.
<PAGE>
---------------------
IMPORTANT
THE PARENT INTENDS TO SEEK TO NEGOTIATE WITH THE COMPANY WITH RESPECT TO
THE ACQUISITION OF THE COMPANY BY THE PARENT OR THE PURCHASER. THERE CAN BE NO
ASSURANCE, HOWEVER, THAT THE PARENT'S EFFORTS WILL RESULT IN AN AGREEMENT WITH
THE COMPANY. THE PURCHASER AND THE PARENT RESERVE THE RIGHT TO AMEND THE OFFER,
INCLUDING, BUT NOT LIMITED TO, UPON ENTERING INTO A MERGER AGREEMENT WITH THE
COMPANY. ACCORDINGLY, SUCH NEGOTIATIONS COULD RESULT IN, AMONG OTHER THINGS,
TERMINATION OF THE OFFER AND SUBMISSION OF A DIFFERENT ACQUISITION PROPOSAL TO
THE COMPANY'S STOCKHOLDERS FOR THEIR APPROVAL.
Any stockholder desiring to tender all or any portion of such
stockholder's Shares (and the associated Rights) should either (a) complete and
sign the Letter of Transmittal (or a facsimile thereof) in accordance with the
instructions in the Letter of Transmittal, have such stockholder's signature
thereon guaranteed if required by Instruction 1 to the Letter of Transmittal,
mail or deliver the Letter of Transmittal (or such facsimile), or, in the case
of a book-entry transfer effected pursuant to the procedure set forth in
Section 3, an Agent's Message (as defined herein), and any other required
documents to the Depositary and either deliver the certificates for such Shares
and, if separate, the certificate(s) representing the associated Rights to the
Depositary along with the Letter of Transmittal (or facsimile thereof) or
deliver such Shares (and Rights, if applicable) pursuant to the procedure for
book-entry transfer set forth in Section 3, or (b) request such stockholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. A stockholder whose Shares and, if
applicable, Rights are registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact such broker, dealer,
commercial bank, trust company or other nominee if such stockholder desires to
tender such Shares and, if applicable, Rights. If a Distribution Date (as
defined in Section 11) occurs, stockholders will be required to tender one
Right for each Share tendered in order to effect a valid tender of such Share.
A stockholder who desires to tender such stockholder's Shares (and Rights,
if applicable) and whose certificates representing such Shares (and Rights, if
applicable) are not immediately available or who cannot comply with the
procedures for book-entry transfer on a timely basis may tender such Shares
(and Rights, if applicable) by following the procedures for guaranteed delivery
set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and other related materials may
be obtained from the Information Agent.
---------------------
August 8, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION ............................................................................ 1
THE TENDER OFFER ......................................................................... 6
1. Terms of the Offer; Expiration Date ................................................ 6
2. Acceptance for Payment and Payment ................................................ 8
3. Procedures for Accepting the Offer and Tendering Shares and Rights .................. 9
4. Withdrawal Rights .................................................................. 12
5. Certain Federal Income Tax Consequences ............................................. 12
6. Price Range of the Shares; Dividends ................................................ 13
7. Effect of the Offer on the Market for the Shares; Stock Exchange Listing; Exchange Act
Registration; Margin Regulations ................................................... 14
8. Certain Information Concerning the Company .......................................... 15
9. Certain Information Concerning the Purchaser and the Parent ........................ 16
10. Background of the Offer; Contacts with the Company .................................. 21
11. Purpose of the Offer and the Merger ................................................. 22
12. Source and Amount of Funds .......................................................... 29
13. Dividends and Distributions ....................................................... 31
14. Certain Conditions of the Offer .................................................... 32
15. Certain Regulatory and Legal Matters .............................................. 33
16. Certain Fees and Expenses .......................................................... 34
17. Miscellaneous ...................................................................... 35
Schedule I -- DIRECTORS, EXECUTIVE OFFICERS OR CONTROLLING PERSONS OF
THE ACQUIRORS ................................................................... 36
Schedule II -- TRANSACTIONS IN SHARES WITHIN 60 DAYS PRIOR TO THE OFFER ................... 41
</TABLE>
<PAGE>
To: All Holders of Shares of Common Stock
(Including the Associated Preferred Stock
Purchase Rights) of Outboard Marine Corporation
INTRODUCTION
Greenmarine Acquisition Corp., a Delaware corporation (the "Purchaser")
and a wholly-owned subsidiary of Greenmarine Holdings LLC, a Delaware limited
liability company (the "Parent"), hereby offers to purchase all outstanding
shares of common stock, par value $0.15 per share (the "Shares"), of Outboard
Marine Corporation, a Delaware corporation (the "Company"), together with
(unless and until the Purchaser declares that the Rights Condition (as defined
below) is satisfied) the associated preferred stock purchase rights (the
"Rights") issued pursuant to the Rights Agreement, dated as of April 24, 1996
(as amended, the "Rights Agreement"), by and between the Company and First
Chicago Trust Company of New York, as Rights Agent, at a price of $18.00 per
Share (and associated Right), net to the seller in cash, without interest
thereon (the "Offer Price"), upon the terms and subject to the conditions set
forth in this Offer to Purchase and in the related Letter of Transmittal
(which, together with any amendments or supplements hereto or thereto,
collectively constitute the "Offer"). Unless the context otherwise requires,
all references to Shares shall include the Rights and all references to the
Rights shall include all benefits that may inure to holders of the Rights
pursuant to the Rights Agreement.
The members of the Parent are Greenlake Holdings LLC, a Delaware limited
liability company ("Greenlake"), Quasar Strategic Partners LDC, a Cayman
Islands limited duration company ("QSP"), and Quantum Industrial Partners LDC,
a Cayman Islands limited duration company ("QIP"). Each of Greenlake, QSP and
QIP has approximately a 30.5%, 34.75% and 34.75% interest in the Parent,
respectively. Greenlake is controlled by Mr. Alfred D. Kingsley and Mr. Gary K.
Duberstein, each of whom are principals of Greenway Partners, L.P. The
principal business of Greenway Partners, L.P. is investing in securities. See
Section 9. QSP is an indirect subsidiary of Quasar International Fund N.V., a
Netherlands Antilles limited liability company ("Quasar"). QIP is the principal
operating subsidiary of Quantum Industrial Holdings Ltd., a British Virgin
Islands corporation ("QIH"). Quasar and QIH are investment funds which have as
their principal investment advisors Soros Fund Management LLC ("SFM LLC"), of
which Mr. George Soros serves as Chairman.
The Purchaser, the Parent, QSP, QIP and Greenlake are sometimes
collectively referred to herein as, the "Acquirors."
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, transfer taxes on the purchase of Shares pursuant to the Offer.
The Purchaser will pay all fees and expenses of Marine Midland Bank, which is
acting as the Depositary (the "Depositary"), and Georgeson & Company Inc.,
which is acting as Information Agent (the "Information Agent"), incurred in
connection with the Offer. See Section 16.
On July 9, 1997, the Company and Detroit Diesel Corporation, a Delaware
corporation ("DDC"), announced that they and OMC Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of DDC ("OMC Acquisition"), had
entered into an Agreement and Plan of Merger dated as of July 8, 1997 (the "DDC
Merger Agreement"). In accordance with the DDC Merger Agreement and pursuant to
OMC Acquisition's Offer to Purchase, dated July 15, 1997 (the "DDC Offer to
Purchase"), a copy of which is filed as Exhibit (a)(1) to the Tender Offer
Statement on Schedule 14D-1, dated July 15, 1997, with respect to the DDC Offer
(as defined below) (as amended, the "DDC Schedule 14D-1"), filed by DDC and OMC
Acquisition with the Securities and Exchange Commission (the "Commission"), OMC
Acquisition is currently offering (the "DDC Offer") to purchase 13,842,619
Shares at a purchase price of $16.00 per Share (if validly tendered and not
withdrawn prior to August 11, 1997, the "DDC Minimum Condition"), net to the
seller in cash, without interest, upon the terms and subject to the conditions
set forth in full therein.
According to the DDC Offer to Purchase, in the event the DDC Offer is
consummated, the DDC Merger Agreement provides that, subject to the
satisfaction or waiver of certain conditions set forth therein, OMC Acquisition
will merge with and into the Company (the "DDC Merger"), with the Company as
the surviving corporation of the DDC Merger.
According to the DDC Offer to Purchase, pursuant to the DDC Merger
Agreement, at the effective time of the DDC Merger (the "DDC Effective Time"),
each then issued and outstanding Share (other than Shares held
<PAGE>
by the Company as treasury stock, Shares owned by OMC Acquisition or DDC or
Shares held by shareholders who perfect their appraisal rights under the
Delaware General Corporation Law, as amended (the "DGCL") (the "Exchanged
Shares"), will be converted into and represent the right to receive (a) a
fractional share of the common stock of DDC equal to 4,000,000 divided by the
number of Exchanged Shares (the "Exchange Ratio"), plus (b) a cash payment
equal to (i) $16.00 minus (ii) the product of the Exchange Ratio times $25.00,
plus (c) in the event the average closing price of common stock of DDC on the
New York Stock Exchange ("NYSE") prior to the closing date of the DDC Merger
(the "DDC Closing Date Market Price") is less than $25.00, then an additional
cash payment equal to the product of the Exchange Ratio multiplied by the
lesser of (i) $25.00 minus the DDC Closing Date Market Price or (ii) $6.00.
According to the DDC Offer to Purchase, the DDC Merger Agreement may be
terminated and the DDC Merger abandoned under certain circumstances described
in the DDC Merger Agreement, including, but not limited to, (i) by the Company,
at any time prior to the acceptance for payment of Shares by OMC Acquisition
pursuant to the DDC Offer, if there is an Alternative Proposal (as defined in
the DDC Merger Agreement) which the Company's Board of Directors in good faith
determines represents a superior transaction for the shareholders of the
Company as compared to the DDC Offer and the DDC Merger, and the Company's
Board of Directors determines, after consultation with outside counsel and its
financial advisor, that it is required by its fiduciary duties to the Company's
shareholders imposed by law to terminate the DDC Merger Agreement and the
Company pays to DDC the DDC Termination Fee (as defined below); provided,
however, that the right to terminate the DDC Merger Agreement under this
circumstance shall not be available (a) if such Alternative Proposal results
from a breach in any material respect of the Company's "non-solicitation"
covenant under the DDC Merger Agreement or (b) if the Company has not provided
DDC and OMC Acquisition with at least two business days' prior written notice
of its intent to so terminate the DDC Merger Agreement together with a summary
of the material terms and conditions of the Alternative Proposal, or (ii) by
DDC, if the Company's Board of Directors shall have failed to recommend, or
shall have withdrawn, modified or amended in any manner adverse to DDC or OMC
Acquisition its approval or recommendation of the DDC Offer or the DDC Merger,
or shall have recommended acceptance of any Alternative Proposal.
According to the DDC Offer to Purchase, the Company has agreed in the DDC
Merger Agreement that, in the event that (i) the Company's Board of Directors
shall publicly modify or amend its recommendation of the DDC Offer or the DDC
Merger in a manner adverse to DDC or shall withdraw its recommendation of the
DDC Offer or shall recommend any Alternative Proposal, or shall resolve to do
any of the foregoing, or (ii) at any time prior to the termination of the DDC
Merger Agreement any person (other than DDC or any of its affiliates) shall
publicly announce any Alternative Proposal and, at any time on or prior to one
year after the date of the DDC Merger Agreement, shall become the beneficial
owner of 33% or more of the outstanding Shares or shall consummate an
Alternative Proposal, then in any such event the Company shall promptly, but in
no event later than two business days after the first of such events to occur,
pay DDC an amount equal to $15,750,000 (the "DDC Termination Fee"), which shall
be in lieu of any and all damages, costs, and expenses, for breach of the DDC
Merger Agreement by the Company.
The foregoing description of the DDC Merger Agreement is qualified in its
entirety by reference to the full text thereof, a copy of which has been filed
by OMC Acquisition and DDC as an exhibit to the DDC Schedule 14D-1 and may be
obtained in the manner described in Section 8 (except that copies may not be
available at regional offices of the Commission).
By tendering Shares to the Purchaser in the Offer, the Company's
stockholders effectively will be given the opportunity to express to the
Company's Board of Directors that they wish to be able to accept the
Purchaser's Offer and to approve the proposed Merger (as defined below).
Merger And Plans
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. The Offer, as the first step in the acquisition of
the Company, is intended to facilitate the acquisition of all outstanding
Shares. The Parent currently intends, immediately following consummation of the
Offer, to seek to have the Company consummate a merger or similar business
combination with the Purchaser or another direct or indirect wholly-owned
subsidiary of the Purchaser (the "Merger"), pursuant to which each then
outstanding Share (other
2
<PAGE>
than Shares held by the Purchaser, the Parent or any of their respective
wholly-owned subsidiaries, treasury shares and Shares held by shareholders who
properly exercise appraisal rights available to them under Section 262 of the
DGCL) would be converted into the right to receive in cash the price per Share
paid by the Purchaser pursuant to the Offer.
Although the Purchaser will seek to have the Company consummate the Merger
immediately after consummation of the Offer, if the Board of Directors of the
Company opposes the Offer and the Merger, certain terms of the Rights, and
certain provisions of the DGCL and the Company's Restated Certificate of
Incorporation (as amended, the "Charter") and By-Laws (as amended, the
"By-Laws"), may affect the ability of the Purchaser to obtain control of the
Company and to effect the Merger. Accordingly, the timing and details of the
Merger will depend on a variety of factors and legal requirements, the actions
of the Board of Directors of the Company, the number of Shares (if any)
acquired by the Purchaser pursuant to the Offer, and whether the Minimum
Condition, the Rights Condition, the Funding Condition, the Supermajority
Condition, the OMC Indebtedness Condition and the DDC Termination Condition
(each as defined below), and the other conditions set forth in Section 14 are
satisfied or waived. If the Purchaser and the Parent collectively own at least
90% of the outstanding Shares following the consummation of the Offer or
otherwise, the Purchaser intends to attempt to effect the Merger pursuant to
the "short-form merger" provisions of Section 253 of the DGCL immediately
following the purchase of Shares in the Offer. There can be no assurance that
the Purchaser will be able to consummate the Offer or, if the Offer is
consummated, will in fact effectuate the Merger. See below and see Sections 10
and 11.
The Parent intends to seek to negotiate with the Company with respect to
the acquisition of the Company by the Parent or the Purchaser. There can be no
assurance, however, that the Parent's efforts will result in an agreement with
the Company. The Purchaser and the Parent reserve the right to amend the Offer,
including, but not limited to, upon entering into a merger agreement with the
Company. Accordingly, such negotiations could result in, among other things,
termination of the Offer and submission of a different acquisition proposal to
the Company's stockholders for their approval. See Section 1 and Section 14. In
addition, the Purchaser reserves the right to acquire additional Shares after
consummation of the Offer in open market purchases, through a tender offer, in
privately negotiated transactions or otherwise, in order to obtain a sufficient
number of Shares to approve the transactions contemplated hereby.
Certain Conditions to the Offer
The Offer is subject to the fulfillment of certain conditions, including
the following:
Minimum Condition. Consummation of the Offer is conditioned upon there
being validly tendered and not withdrawn prior to the Expiration Date (as
defined in Section 1) that number of Shares (the "Minimum Number of Shares")
that, when added to the 2,000,000 Shares beneficially owned by the Purchaser
and the Parent, would represent 90% of all outstanding Shares on the date of
purchase and, as a result thereof, the Purchaser being satisfied, in its sole
discretion, that on the date of purchase it will be able to consummate the
Merger as a "short-form merger" pursuant to the provisions of Section 253 of
the DGCL immediately after consummation of the Offer (the "Minimum Condition").
SUBJECT TO THE APPLICABLE RULES AND REGULATIONS OF THE COMMISSION, THE
PURCHASER RESERVES THE RIGHT, WHICH IT PRESENTLY HAS NO INTENTION OF
EXERCISING, TO WAIVE OR REDUCE THE MINIMUM CONDITION AND TO ELECT TO PURCHASE,
PURSUANT TO THE OFFER, FEWER THAN THE MINIMUM NUMBER OF SHARES. SEE SECTION 1.
Upon the terms and subject to the conditions of the Offer, if more than
the Minimum Number of Shares are validly tendered on or prior to the Expiration
Date and not withdrawn in accordance with Section 4 of this Offer to Purchase,
the Purchaser will accept for payment and pay for such Shares.
According to the Company's Form 10-Q for the quarterly period ended June
30, 1997 (the "June 1997 Form 10-Q"), there were 20,221,964 Shares issued and
outstanding as of July 31, 1997. According to the DDC Offer to Purchase, the
Company advised DDC that there were, as of June 30, 1997, options outstanding
to purchase 1,430,000 Shares. Further, according to the DDC Offer to Purchase,
there are outstanding convertible debt instruments of the Company convertible
into approximately 3,360,000 Shares, at a conversion price of $22.25 per Share
(the "Company Debentures"). Based on the foregoing and assuming that there
would be 20,221,964 Shares outstanding on the date of purchase, the Minimum
Number of Shares would be 16,199,768, which number excludes the 2,000,000
Shares to be beneficially owned by the Parent upon consummation of the Offer.
3
<PAGE>
However, the actual Minimum Number of Shares will depend on the facts as they
exist on the date of purchase. Greenlake beneficially owns 2,000,000 Shares
(approximately 9.9% of the outstanding Shares). Greenlake acquired beneficial
ownership of such Shares from Greenway Partners, L.P., Greentree Partners,
L.P., Greenbelt Corp. and Greensea Offshore, L.P. Prior to the consummation of
the Offer, Greenlake has agreed, among other things, to transfer such Shares to
the Parent as a capital contribution. See Section 9.
The Company's Charter and By-laws contain numerous provisions which may
delay or ultimately preclude a change in control of the Company following the
purchase of Shares by the Purchaser upon consummation of the Offer. These
provisions include, but are not limited to, the following: (i) a classified
board of directors consisting of three classes of directors; (ii) the inability
to remove a director except for cause and with approval of the holders of 80%
of the voting stock of the Company; (iii) a prohibition against the taking of
stockholder action by written consent; (iv) the ability of only the Chairman of
the Board, the Chief Executive Officer or three-quarters of the entire Board of
Directors to call special meetings of the Company's stockholders; (v) the
requirement that the holders of two-thirds of the voting stock of the Company
approve amendments to certain by-laws, including those relating to special
meetings of stockholders and the number and nomination of directors; and (vi)
the supermajority vote and "fair price" requirements (as discussed and defined
in Section 11) applicable to certain business combinations such as the Merger.
As a result of these provisions, the Purchaser may be unable to consummate the
Merger or the consummation of the Merger may be substantially delayed.
In general, pursuant to the DGCL, the approval of both the stockholders
and the board of directors of a corporation is required to effect the merger of
that corporation with or into another corporation. In addition, the Purchaser's
ability to consummate the Merger may be further impeded by the provisions of
Section 203 of the DGCL. Section 203 of the DGCL, in general, prevents an
"Interested Stockholder" (defined generally as a person owning 15% or more of a
corporation's outstanding voting stock) from engaging in a "Business
Combination" (defined to include a variety of transactions including a merger)
with a Delaware corporation for three years following the date on which such
person became an Interested Stockholder. The prohibition contained in Section
203 of the DGCL would not apply to the Merger if the Board of Directors of the
Company approved the Offer and the Merger prior to consummation of the Offer,
or if, after consummation of the Offer, the Purchaser owned at least 85% of the
total voting stock of the Company outstanding at the time the Offer commenced
(excluding Shares owned by persons who are directors and also officers of the
Company and possibly excluding Shares held in certain employee stock plans).
See Section 11 for a more detailed discussion of Section 203 of the DGCL.
As a result of the aforementioned impediments to a change in control of
the Company, assuming the Minimum Condition and the other conditions to the
Offer set forth below and in Section 14 are satisfied, the Purchaser and the
Parent intend to attempt to effect the Merger immediately after the Offer is
consummated pursuant to the "short-form merger" provisions of Section 253 of
the DGCL. Section 253 of the DGCL, in general, provides that if a parent
corporation owns at least 90% of each class of the outstanding shares of
capital stock of a subsidiary corporation, the parent corporation may merge
with or into the subsidiary corporation without any action or vote on the part
of the board of directors or the other stockholders of the subsidiary
corporation. No assurance, however, can be given that the Merger will be
consummated pursuant to the "short-form merger" provisions of Section 253 of
the DGCL or otherwise.
See Section 11 for a more complete description of the foregoing potential
restrictions on the ability of the Parent to obtain control of the Company and
consummate transactions subsequent to the Offer.
Rights Condition. Consummation of the Offer is conditioned upon the Rights
having been redeemed by the Board of Directors of the Company, or the Purchaser
being satisfied, in its sole discretion, that the Rights have been invalidated
or are otherwise inapplicable to the Offer and to the Merger (the "Rights
Condition"). The Rights are described in the Company's Report on Form 8-A dated
June 14, 1996. The Rights Agreement is appended as an exhibit thereto, and
amended by Amendment No. 1 to the Rights Agreement, dated July 8, 1997. This
amendment is appended to the Company's Form 8-A12B/A, dated July 10, 1997
(together with the Form 8-A, dated June 14, 1996, referenced above, the
"Company 8-A"). See Section 11 for a more detailed discussion of the Rights
Agreement.
4
<PAGE>
According to the Company 8-A, at any time prior to the earlier of (i) 10
days following the initial public announcement that a person or group of
affiliated persons has become an "Acquiring Person" (as defined in Section 11),
or (ii) the expiration of the Rights, the Company may redeem the then
outstanding Rights in whole, but not in part, at a price of $.01 per Right. The
Board of Directors of the Company may not redeem any Rights after it has
determined any person to be an "Adverse Person" (as defined in Section 11).
According to the Company 8-A, until the earliest to occur of (i) 10 days
following the first date of public announcement that a person or group of
affiliated persons has become an Acquiring Person, (ii) 10 business days (or
such later date as may be determined by action of the Board of Directors)
following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer the consummation of which would result in any
person becoming, or after the consummation of which any person would be, the
beneficial owner of 15% or more of the outstanding Shares, or (iii) 10 days
following the date on which the Company's Board of Directors has determined
that an entity has become an Adverse Person (the earliest of such dates being
called the "Distribution Date"), the Rights will be evidenced, with respect to
any of the certificates representing Shares (the "Share Certificates")
outstanding as of the Record Date (as defined in Section 11), by such Share
Certificate. From and after the Distribution Date, the Rights will separate
from the Shares and the Shares Certificates.
Based on publicly available information, the Purchaser believes that
certificates representing the Rights (the "Rights Certificates") have not been
issued and the Rights are evidenced by the Share Certificates. The Purchaser
believes that as a result of the commencement of the Offer, the Distribution
Date will be 10 days following such commencement, or announcement of the Offer,
unless prior to the Distribution Date the Company's Board of Directors redeems
the Rights within such 10-day period or takes action to delay the Distribution
Date. See Section 11. According to the Company's Form 8-A12B/A, dated July 10,
1997, the Company has amended the Rights Agreement so that the execution,
delivery and performance of the DDC Merger Agreement will not (1) cause any
Rights to become exercisable, (2) cause DDC, OMC Acquisition or any of their
affiliates to become an Acquiring Person or (3) give rise to a Distribution
Date or a "Triggering Date" (as defined in Section 11).
IF A DISTRIBUTION DATE OCCURS, STOCKHOLDERS WILL BE REQUIRED TO TENDER ONE
RIGHT FOR EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF SHARES IN
ACCORDANCE WITH THE PROCEDURES SET FORTH IN SECTION 3. UNLESS THE DISTRIBUTION
DATE OCCURS, A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF RIGHTS.
The Purchaser and the Parent believe that under the circumstances of the
Offer, and under applicable law, the Board of Directors of the Company has a
fiduciary obligation to redeem the Rights (or amend the Rights Agreement to
make the Rights inapplicable to the Offer and the proposed Merger), and the
Purchaser and the Parent have and are hereby again requesting that the
Company's Board of Directors do so. However, there can be no assurance that the
Board will redeem the Rights (or amend the Rights Agreement). The Purchaser has
commenced litigation in the Court of Chancery for the State of Delaware
seeking, among other things, an order compelling the Company's Board of
Directors to redeem the Rights or to amend the Rights Agreement to make the
Rights inapplicable to the Offer and the proposed Merger on the grounds that
failure to do so would constitute a breach of fiduciary duty to the Company's
stockholders. There can be no assurance that such an order will be obtained.
Funding Condition. Consummation of the Offer is conditioned upon the
Purchaser receiving the loan proceeds committed to be provided by AFG in
accordance with the Commitment Letter (the "Commitment Letter") issued by AFG
to the Purchaser, dated August 7, 1997 (the "Funding Condition").
The total amount of funds required by the Purchaser to consummate the
Offer and the Merger (assuming the outstanding Company options are not
exercised and the Company Debentures are not converted) is expected to be
approximately $328 million, which excludes related fees and expenses. QSP, QIP
and Greenlake have committed to contribute at least $241 million and 2,000,000
Shares to the Parent for the purpose of effecting the Offer and the Merger. The
Purchaser has received the Committment Letter from AFG pursuant to which, upon
the terms and subject to the conditions therein, AFG has agreed to lend to the
Purchaser up to $150 million to be used to effect the Offer and the Merger. See
Section 12.
Supermajority Condition. Consummation of the Offer is conditioned upon the
Purchaser being satisfied, in its sole discretion, that the proposed Merger can
be consummated without the need for a supermajority vote of the Company's
stockholders pursuant to Article Eighteenth of the Company's Charter (the
"Supermajority Condition").
5
<PAGE>
Article Eighteenth of the Charter provides that the affirmative vote of
the holders of at least 75% of the voting shares of the Company held by
stockholders other than a "Related Person" (as defined in Section 11 below) is
required for the approval or authorization of a "Business Combination," which
includes a merger involving the Company, between the Company and any Related
Person (the "75% Voting Requirement"). However, the 75% Voting Requirement does
not apply under the following circumstances: (i) approval of the proposed
business combination by at least a majority of the directors whose tenure began
prior to the Related Person's attaining Related Person status (the "Continuing
Directors"), or (ii) the determination by a majority of the Continuing
Directors that the cash or the fair market value of any other consideration to
be received by holders of the Company's stock pursuant to the business
combination is not less in amount than the "Highest Per Share Price" (as
defined in Section 11) or the "Highest Equivalent Price" (as defined in Section
11 below) paid by the Related Person in acquiring any of its holdings of the
Company's stock. The Purchaser believes that it and the Parent collectively
will be deemed to be a Related Person for purposes of Article Eighteenth of the
Charter upon consummation of the Offer.
The foregoing summary of Article Eighteenth of the Charter is qualified by
reference to the text thereof as filed by the Company with the Commission and
which can be examined or copies thereof obtained as set forth in Section 8
(except that copies thereof may not be available at the regional offices of the
Commission).
OMC Indebtedness Condition. Consummation of the Offer is conditioned upon
the Purchaser being satisfied, in its sole discretion, that, upon consummation
of the Offer and the Merger, the Company will not be in default under any
instrument evidencing the Company's then outstanding indebtedness, or, if in
default, the Purchaser and the Parent having obtained, prior to the Expiration
Date, on terms reasonably acceptable to the Parent, sufficient financing to
enable the Company to refinance or redeem any such indebtedness upon
consummation of the Offer and the Merger.
According to publicly available information regarding the Company, it is
possible that consummation of the Offer may result in a default under
instruments pursuant to which approximately $300 million of the Company's
indebtedness was issued. While the Parent will seek to obtain the requisite
consents under such instruments prior to the Expiration Date, in the event that
such consents are not obtained, the Parent will seek to arrange for additional
financing so that upon obtaining control of the Company, the Parent will be
able to cause the Company to refinance or redeem such indebtedness.
DDC Termination Condition. Consummation of the Offer is conditioned upon
the Purchaser being satisfied, in its sole discretion, that the DDC Merger
Agreement has been terminated in accordance with its terms (the "DDC
Termination Condition"). The Purchaser does not intend to consummate the Offer
if at the time of such consummation the Company would be obligated to
consummate the proposed DDC Merger.
Certain other conditions to the consummation of the Offer are described in
Section 14. Subject to the rules and regulations of the Commission, the
Purchaser expressly reserves the right to waive any one or more of the
conditions to the Offer. See Sections 1, 14 and 15.
This Offer to Purchase and the Letter of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
THE TENDER OFFER
1. Terms of the Offer; Expiration Date. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the Purchaser will
accept for payment and thereby purchase all Shares validly tendered and not
withdrawn in accordance with the procedures set forth in Section 4 on or prior
to the Expiration Date (as hereinafter defined). The term "Expiration Date"
means 5:00 p.m., New York City time, on Monday, September 8, 1997, unless and
until the Purchaser, in its sole discretion, shall have extended the period of
time for which the Offer is open, in which event the term "Expiration Date"
shall mean the time and date at which the Offer, as so extended by the
Purchaser, shall expire.
THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM CONDITION, THE
RIGHTS CONDITION, THE FUNDING CONDITION, THE SUPERMAJORITY CONDITION, THE OMC
INDEBTEDNESS CONDITION AND THE DDC TERMINATION CONDITION, AND THE SATISFACTION
OF THE OTHER CONDITIONS SET FORTH IN SECTION 14.
6
<PAGE>
Subject to the applicable rules and regulations of the Commission, the
Purchaser expressly reserves the right, in its sole discretion, at any time and
from time to time, to extend the period during which the Offer is open for any
reason, including the occurrence of any of the conditions specified in Section
14, by giving oral or written notice of such extension to the Depositary.
During any such extension, all Shares and Rights previously tendered and not
withdrawn will remain subject to the Offer and subject to the right of a
tendering stockholder to withdraw such stockholder's Shares and Rights. UNDER
NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED
SHARES, WHETHER OR NOT THE PURCHASER EXERCISES ITS RIGHTS TO EXTEND THE OFFER.
See Section 4.
Subject to the applicable rules and regulations of the Commission, the
Purchaser also expressly reserves the right, in its sole discretion, at any
time and from time to time, to (i) delay acceptance for payment of or,
regardless of whether such Shares or Rights were theretofore accepted for
payment, payment for any Shares or Rights pending receipt of any regulatory or
governmental approvals specified in Section 15, (ii) terminate the Offer
(whether or not any Shares or Rights have theretofore been accepted for
payment) if any of the conditions referred to in Section 14 has not been
satisfied or upon the occurrence of any of the events specified in Section 14
and (iii) waive any condition or otherwise amend the Offer in any respect, in
each case, by giving oral or written notice of such delay, termination, waiver
or amendment to the Depositary and by making a public announcement thereof. The
Purchaser acknowledges that (i) Rule 14e-1(c) under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), requires the Purchaser to pay the
consideration offered or return the Shares and Rights tendered promptly after
the termination or withdrawal of the Offer and (ii) the Purchaser may not delay
acceptance for payment of, or payment for (except as provided in clause (i) of
the preceding sentence), any Shares or Rights upon the occurrence of any of the
conditions specified in Section 14 without extending the period of time during
which the Offer is open.
Any such extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof, and such
announcement in the case of an extension will be made no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Without limiting the manner in which the Purchaser may choose
to make any public announcement, subject to applicable law (including Rules
14d-4(c) and 14d-6(d) under the Exchange Act, which require that material
changes be promptly disseminated to 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 to the Offer, the Purchaser will extend the
Offer and disseminate additional tender offer materials to the extent required
by Rules 14d-4(c) and 14d-6(d) 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 percentage of
securities sought or a change in any dealer's soliciting fee, 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 or a change in any dealer's soliciting fee,
a minimum ten business day period from the date of such change is generally
required to allow for adequate dissemination to stockholders. Accordingly, if
on or prior to the Expiration Date, the Purchaser increases (other than
increases of not more than two percent of the outstanding Shares) or decreases
the number of Shares being sought, or increases or decreases the consideration
offered pursuant to the Offer, and if the Offer is scheduled to expire at any
time earlier than the period ending on the tenth business day from the date
that notice of such increase or decrease is first published, sent or given to
holders of Shares, the Offer will be extended at least until the expiration of
such ten business day period. For purposes of the Offer, a "business day" means
any day other than a Saturday, Sunday or a federal holiday and consists of the
time period from 12:01 a.m. through 12:00 midnight, New York City time.
If a Distribution Date occurs, stockholders will be required to tender one
Right for each Share tendered to effect a valid tender of such Share. See
Sections 3 and 11.
A request is being made to the Company pursuant to Rule 14d-5 under the
Exchange Act and Section 220 of the DGCL for the use of the Company's
stockholder list, its list of holders of Rights, if any, and security
7
<PAGE>
position listings for the purpose of disseminating the Offer to holders of
Shares. Upon compliance by the Company with such request, this Offer to
Purchase and the related Letter of Transmittal and, if required, other relevant
materials will be mailed to record holders of Shares and Rights, if any, and
will be furnished to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
stockholder list and list of holders of Rights, if applicable, or who are
listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Shares and Rights.
2. Acceptance for Payment and Payment. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of the Offer as so extended or amended), the Purchaser
will purchase, by accepting for payment, and will pay for, all Shares validly
tendered and not withdrawn (as permitted by Section 4) on or prior to the
Expiration Date, promptly after the later to occur of (i) the Expiration Date
and (ii) the satisfaction or waiver of the conditions to the Offer set forth in
Section 14. In addition, subject to the applicable rules and regulations of the
Commission, the Purchaser expressly reserves the right to delay acceptance for
payment of, or payment for, Shares pending receipt of any regulatory or
governmental approvals specified in Section 15.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) Share Certificates for
such Shares and, if applicable, Rights Certificates for the associated Rights,
or timely confirmation (a "Book-Entry Confirmation") of the book-entry transfer
of such Shares and, if applicable, Rights into the Depositary's account at The
Depository Trust Company, Midwest Securities Trust Company or Philadelphia
Depository Trust Company (each, a "Book-Entry Transfer Facility" and
collectively, the "Book-Entry Transfer Facilities"), 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 a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares and, if applicable, Rights which are the
subject of such Book-Entry Confirmation, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not withdrawn
as, if and when the Purchaser gives oral or written notice to the Depositary of
the Purchaser's acceptance of such Shares for payment pursuant to the Offer. In
all cases, upon the terms and subject to the conditions of the Offer, payment
for Shares purchased 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 purposes of receiving payment from the Purchaser
and transmitting payment to validly tendering stockholders. Under no
circumstances will interest on the purchase price for Shares or Rights be paid
by the Purchaser by reason of any delay in making such payment.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if Share Certificates are submitted representing more Shares than
are tendered, Share Certificates representing unpurchased or untendered Shares
will be returned, without expense to the tendering stockholder (or, in the case
of Shares delivered by book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3,
such Shares will be credited to an account maintained within such Book-Entry
Transfer Facility), as promptly as practicable following the expiration,
termination or withdrawal of the Offer. In the event separate Rights
Certificates are issued, similar action will be taken with respect to
unpurchased and untendered Rights.
If, on or prior to the Expiration Date, the Purchaser shall increase the
consideration offered to holders of Shares pursuant to the Offer, such
increased consideration shall be paid to all holders of Shares that are
purchased pursuant to the Offer, whether or not such Shares were tendered prior
to such increase in consideration.
8
<PAGE>
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to one or more of the Purchaser's subsidiaries or
affiliates the right to purchase all or any portion of the Shares and Rights
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve the Purchaser of its obligations under the Offer or prejudice the
rights of tendering stockholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.
3. Procedures for Accepting the Offer and Tendering Shares and Rights.
Valid Tender of Shares and Rights
Except as set forth below, in order for Shares and (prior to the
Distribution Date) Rights 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 (prior to the Distribution Date) Rights, and any
other documents required by the Letter of Transmittal must be received by the
Depositary at its address set forth on the back cover of this Offer to Purchase
on or prior to the Expiration Date and either (i) Share Certificates and Rights
Certificates, if applicable, representing tendered Shares and Rights must be
received by the Depositary, or such Shares and Rights must be tendered pursuant
to the procedure for book-entry transfer set forth 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 set forth below
must be complied with.
If the Purchaser declares that the Rights Condition is satisfied, the
Purchaser will not require delivery of Rights. If a Distribution Date occurs,
holders of Shares will be required to tender one Right for each Share tendered
in order to effect a valid tender of such Share.
The method of delivery of Share Certificates, Rights Certificates (if
applicable), the Letter of Transmittal and all other required documents is at
the option and sole risk of the tendering stockholder, and the delivery will be
deemed made only when actually received by the Depositary. If delivery is by
mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
Separate Delivery of Rights Certificates
If the Distribution Date does not occur prior to the Expiration Date, a
tender of Shares will also constitute a tender of the associated Rights. If the
Distribution Date occurs and Rights Certificates are distributed by the Company
to holders of Shares prior to the time a holder's Shares are tendered pursuant
to the Offer, in order for Rights (and the corresponding Shares) to be validly
tendered, Rights Certificates representing a number of Rights equal to the
number of Shares tendered must be delivered to the Depositary or, if available,
a Book-Entry Confirmation received by the Depositary with respect thereto. If
the Distribution Date occurs and Rights Certificates are not distributed prior
to the time Shares are tendered pursuant to the Offer, Rights may be tendered
prior to a stockholder receiving Rights Certificates by use of the guaranteed
delivery procedure described below. In any case, a tender of Shares constitutes
an agreement by the tendering stockholder to deliver Rights Certificates
representing a number of Rights equal to the number of Shares tendered pursuant
to the Offer to the Depositary within five business days after the date Rights
Certificates are distributed. The Purchaser reserves the right to require that
the Depositary receive Rights Certificates, or a Book-Entry Confirmation, if
available, with respect to such Rights, prior to accepting the related Shares
for payment pursuant to the Offer, if the Distribution Date occurs prior to the
Expiration Date.
Book-Entry Transfer
The Depositary will make a request to establish accounts with respect to
the Shares at each of the Book-
Entry Transfer Facilities 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 any Book-Entry Transfer Facility may make
book-entry delivery of Shares by causing such Book-Entry Transfer Facility to
transfer such Shares into the Depositary's account at such Book-Entry Transfer
Facility in accordance with such Book-Entry Transfer Facility's procedures for
such transfer. However, although delivery of Shares may be effected through
book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility, the Letter of Transmittal (or facsimile thereof), 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 required
documents must, in any case, be transmitted to and received by the Depositary
at its address set forth on the back cover of this Offer to Purchase on or
prior to the Expiration Date, or the guaranteed delivery procedures set forth
below must be complied with.
9
<PAGE>
If the Distribution Date occurs, the Depositary will also make a request
to establish an account with respect to the Rights at each of the Book-Entry
Transfer Facilities, but no assurance can be given that book-entry delivery of
Rights will be available. If book-entry delivery of Rights is available, the
foregoing book-entry transfer procedures will also apply to Rights. Otherwise,
if Rights Certificates have been issued, a tendering stockholder will be
required to tender Rights by means of physical delivery to the Depositary of
Rights Certificates (in which event references in this Offer to Purchase to
Book-Entry Confirmations with respect to Rights will be inapplicable) or
pursuant to the guaranteed delivery procedures set forth below.
Delivery of documents to a Book-Entry Transfer Facility in accordance with
such Book-Entry Transfer Facility's procedures does not constitute delivery to
the Depositary.
Signature Guarantees
Signatures on all Letters of Transmittal must be guaranteed by a firm that
is a bank, broker, dealer, credit union, savings association or other entity
which is a member in good standing of the Securities Transfer Agent's Medallion
Program (an "Eligible Institution"), unless the Shares and Rights tendered
thereby are tendered (i) by a registered holder of Shares and Rights 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 Instruction 1 of the Letter of
Transmittal.
If the Share Certificates or Rights Certificates are registered in the
name of a person other than the signer of the Letter of Transmittal, or if
payment is to be made to, or Share Certificates or Rights Certificates for
unpurchased Shares or Rights are to be issued or returned to, a person other
than the registered holder, then the tendered certificates must be endorsed or
accompanied by appropriate stock powers, signed exactly as the name or names of
the registered holder or holders appear on the certificates, with the
signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions 1 and 5
of the Letter of Transmittal.
If the Share Certificates and Rights Certificates are forwarded separately
to the Depositary, a properly completed and duly executed Letter of Transmittal
(or facsimile thereof) must accompany each such delivery.
Guaranteed Delivery
If a stockholder desires to tender Shares and Rights pursuant to the Offer
and such stockholder's Share Certificates or, if applicable, Rights
Certificates are not immediately available (including, if the Distribution Date
has occurred and Rights Certificates have not yet been distributed by the
Company) or time will not permit all required documents to reach the Depositary
on or prior to the Expiration Date, or the procedures for book-entry transfer
cannot be completed on a timely basis, such Shares or Rights may nevertheless
be tendered if all of the following guaranteed delivery procedures are duly
complied with:
(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 Rights Certificates (or a Book-Entry
Confirmation) representing all tendered Shares or Rights, in proper form
for transfer together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), 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 (x) in the case of Shares, five NYSE trading days after
the date of execution of such Notice of Guaranteed Delivery or (y) in the
case of Rights, a period ending on the later of (1) five NYSE trading days
after the date of execution of such Notice of Guaranteed Delivery and (2)
five business days after the date Rights Certificates are distributed to
stockholders.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery.
10
<PAGE>
Notwithstanding any other provision hereof, payment for Shares and Rights
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, and if the Distribution Date has
occurred, Rights Certificates for, or a Book-Entry Confirmation, if available,
with respect to, the associated Rights (unless the Purchaser elects, in its
sole discretion, to make payment for such Shares pending receipt of the Rights
Certificates for, or a Book-Entry Confirmation with respect to, such Rights), a
properly completed and duly executed Letter of Transmittal (or 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 Rights Certificates) or Book-Entry Confirmations of such
Shares (or Rights, if available) are received into the Depositary's account at
a Book-Entry Transfer Facility.
If the Rights Condition is satisfied, the guaranteed delivery procedures
with respect to Rights Certificates and the requirement for the tender of
Rights will no longer apply.
Backup Federal Tax Withholding
Under the federal income tax laws, the Depositary will be required to
withhold 31% of the amount of any payments made to certain stockholders
pursuant to the Offer. To prevent backup federal income tax withholding on
payments made to certain stockholders with respect to the purchase price of
Shares purchased pursuant to the Offer, each such stockholder must provide the
Depositary with his correct taxpayer identification number and certify that he
is not subject to backup federal income tax withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal. See Instruction 8 of
the Letter of Transmittal.
Appointment as Proxy
By executing the Letter of Transmittal, a tendering stockholder
irrevocably appoints Gary K. Duberstein and Alfred D. Kingsley or any other
designees of the Purchaser, and each of them, as such stockholder's
attorneys-in-fact and proxies, 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 and, if applicable, Rights
tendered by such stockholder and accepted for payment and paid for by the
Purchaser and with respect to any and all other Shares or Rights and other
securities or rights issued or issuable in respect of such Shares and Rights on
or after the date of this Offer to Purchase. All such powers of attorney and
proxies shall be considered irrevocable and coupled with an interest in the
tendered Shares and Rights. Such appointment will be effective when, and only
to the extent that, the Purchaser pays for such Shares and Rights by depositing
the purchase price therefor with the Depositary. Upon such payment, all powers
of attorney and proxies given by such stockholder with respect to such Shares,
Rights and such other securities or rights prior to such payment will be
revoked, without further action, and no subsequent powers of attorney and
proxies may be given by such stockholder (and, if given, will not be deemed
effective). The designees of the Purchaser will, with respect to the Shares and
Rights 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. The Purchaser reserves the right to
require that, in order for Shares and Rights to be deemed validly tendered,
immediately upon the payment for such Shares and Rights, the Purchaser or its
designee must be able to exercise full voting rights with respect to such
Shares, Rights and other securities, including voting at any meeting of
stockholders.
Determination of Validity
All questions as to the form of documents and validity, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
or Rights 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 or all tenders determined by it not to be in
proper form or the acceptance of or payment for which may, in the opinion of
the Purchaser's 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 or Rights of any particular stockholder whether or not
similar defects or irregularities are waived in the case of other stockholders.
11
<PAGE>
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. No tender of Shares will be deemed to have been validly made
until all defects and irregularities with respect to such tender have been
cured or waived. None of the Purchaser, Parent or any of their affiliates or
assigns, if any, the Depositary, the Information Agent or any other person will
be under any duty to give any notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.
The Purchaser's acceptance for payment of Shares and, if applicable,
Rights 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.
4. Withdrawal Rights. Except as otherwise provided in this Section 4,
tenders of Shares and Rights made pursuant to the Offer are irrevocable. Shares
and Rights tendered pursuant to the Offer may be withdrawn at any time on or
prior to the Expiration Date and, unless theretofore accepted for payment as
provided herein, may also be withdrawn at any time after October 8, 1997 (or
such later date as may apply in case the Offer is extended). A withdrawal of
Shares will also constitute a withdrawal of the associated Rights. Rights may
not be withdrawn unless the associated Shares are also withdrawn.
If, for any reason whatsoever, acceptance for payment of any Shares and
Rights tendered pursuant to the Offer is delayed, or the Purchaser is unable to
accept for payment or pay for Shares and Rights 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, retain tendered
Shares and Rights and such Shares and Rights may not be withdrawn except to the
extent that the tendering stockholder is entitled to and duly exercises
withdrawal rights as described in this Section 4. Any such delay will be by an
extension of the Offer to the extent required by law.
In order for a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
its address set forth on the back cover of this Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the
Shares and Rights to be withdrawn, the number of Shares and Rights to be
withdrawn, and (if Share Certificates and Rights Certificates have been
tendered) the name of the registered holder of the Shares and Rights as set
forth in the Share Certificate and Rights Certificate, if different from that
of the person who tendered such Shares and Rights. If Share Certificates and
Rights Certificates have been delivered or otherwise identified to the
Depositary, then prior to the physical release of such certificates, the
tendering stockholder must submit the serial numbers shown on the particular
certificates evidencing the Shares and Rights to be withdrawn and the signature
on the notice of withdrawal must be guaranteed by an Eligible Institution,
except in the case of Shares and Rights tendered for the account of the
Eligible Institution. If Shares and Rights have been tendered pursuant to the
procedures for book-entry transfer set forth in Section 3, the notice of
withdrawal must specify the name and number of the account at the appropriate
Book-Entry Transfer Facility to be credited with the withdrawn Shares and
Rights, 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. Withdrawals of tenders of Shares and Rights may not be
rescinded. Any Shares and Rights properly withdrawn will be deemed not validly
tendered for purposes of the Offer, but may be retendered at any subsequent
time on or prior to the Expiration Date by following any of the procedures
described in Section 3.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination shall be final and binding. None of the
Purchaser, the Parent or any of their affiliates or assigns, if any, the
Depositary, the Information Agent or any other person will be under any duty to
give any notification of any defects or irregularities in any notice of
withdrawal or incur any liability for failure to give any such notification.
5. Certain Federal Income Tax Consequences.
Sales or conversions of Shares pursuant to the Offer or the Merger, as the
case may be, will be taxable transactions for federal income tax purposes and
may also be taxable transactions under applicable state, local and other tax
laws. Generally, for federal income tax purposes, a stockholder will recognize
gain or loss equal to the difference, if any, between the amount of cash
received by the stockholder pursuant to the Offer or the
12
<PAGE>
Merger and such stockholder's tax basis in the Shares tendered by the
stockholder and purchased pursuant to the Offer or converted in the Merger, as
the case may be. Such gain or loss will be capital gain or loss (assuming the
Shares are held as a capital asset) and any such capital gain or loss will be
long term if, as of the date of sale, the Shares were held for more than one
year or will be short term if, as of such date, the Shares were held for one
year or less. In addition, any gain on the sale of Shares by an individual may
be taxed at the maximum rate of 20%, if, as of the date of sale, the Shares
were held for more than 18 months.
The foregoing discussion may not be applicable to certain types of
stockholders, including stockholders who acquired Shares pursuant to the
exercise of employee stock options or otherwise as compensation, individuals
who are not citizens or residents of the United States and foreign
corporations, or entities that are otherwise subject to special tax treatment
under the Internal Revenue Code of 1986, as amended (such as insurance
companies, other financial institutions, regulated investment companies), and
tax-exempt entities.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY. STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE OFFER AND MERGER, INCLUDING THE
EFFECTS OF FEDERAL, STATE AND LOCAL TAX CONSEQUENCES THEREOF.
6. Price Range of the Shares; Dividends. According to the DDC Offer to
Purchase, the Shares are listed and traded principally on the NYSE. The Shares
are traded on the NYSE under the symbol "OM." The following table sets forth,
for the periods indicated, the reported high and low sale prices for the Shares
on the NYSE Composite Tape and the amount of cash dividends paid per Share.
<TABLE>
<CAPTION>
Dividends
High Low Paid
-------- -------- ----------
<S> <C> <C> <C>
FISCAL 1995:
First Quarter ................................. $24.88 $17.50 $.10
Second Quarter .............................. 22.00 19.50 .10
Third Quarter ................................. 22.88 18.88 .10
Fourth Quarter .............................. 22.63 18.00 .10
FISCAL 1996:
First Quarter ................................. $22.38 $19.75 $.10
Second Quarter .............................. 21.88 18.88 .10
Third Quarter ................................. 20.25 18.13 .10
Fourth Quarter .............................. 18.50 14.38 .10
FISCAL 1997:
First Quarter ................................. $16.88 $15.25 $.10
Second Quarter .............................. 17.50 12.13 .10
Third Quarter ................................. 17.75 10.88 --
Fourth Quarter (through August 7, 1997) ...... 19.50 15.75 --
</TABLE>
According to the DDC Offer to Purchase, on July 8, 1997, the last full day
of trading prior to the public announcement of the execution of the DDC Merger
Agreement, the closing price per Share as reported on the NYSE was $19.50, and
on July 14, 1997, the last full day of trading prior to the commencement of the
DDC Offer, the closing price per Share as reported on the NYSE was $15.94. On
August 7, 1997, the last full day of trading prior to the commencement of this
Offer, the closing price per Share as reported on the NYSE was $16.3125.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
The Purchaser believes, based upon publicly available information, that as
of the date of this Offer to Purchase, the Rights are listed on the NYSE, are
attached to the Shares and are not traded separately. As a result, the sale
prices per Share set forth above are also the high and low sale prices per
Share and associated Right
13
<PAGE>
during such periods. Upon the occurrence of the Distribution Date, the Rights
are to detach, and may trade separately, from the Shares. See Section 11. As a
result of the commencement of the Offer by the Purchaser, the Distribution Date
will be August 22, 1997, unless, prior to such date the Company's Board of
Directors redeems the Rights or takes action to delay the Distribution Date. If
the Distribution Date occurs and the Rights begin to trade separately from the
Shares, stockholders are also urged to obtain a current market quotation for
the Rights.
7. Effect of the Offer on the Market for the Shares; Stock Exchange
Listing; Exchange Act Registration; Margin Regulations.
Effect of the Offer on the Market for the Shares
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and could adversely affect the
liquidity and market value of the remaining Shares held by the public. The
purchase of Shares pursuant to the Offer can also be expected to reduce the
number of holders of Shares.
Stock Exchange Listing
According to the NYSE's published guidelines, the NYSE would consider
delisting the Shares if, among other things, the number of record holders of at
least 100 Shares should fall below 1,200, the number of publicly held Shares
(exclusive of holdings of officers, directors, their immediate families and
other concentrated holdings of 10% or more ("NYSE Excluded Holdings")) should
fall below 600,000 or the aggregate market value of publicly held Shares
(exclusive of NYSE Excluded Holdings) should fall below $5,000,000.
Depending upon the number of Shares acquired pursuant to the Offer, the
Shares may no longer meet the requirements for continued listing on the NYSE or
any other exchanges upon which the Shares are listed. According to the DDC
Offer to Purchase, as of July 8, 1997, there were approximately 3,950 holders
of record of Shares and approximately 15,400 beneficial owners of the Shares.
If, however, as a result of the purchase of Shares pursuant to the Offer or
otherwise, the Shares no longer meet the requirements of the NYSE for continued
listing and/or trading and such trading of the Shares were discontinued, the
market for the Shares could be adversely affected.
In the event that the Shares were no longer listed or traded on the NYSE,
it is possible that the Shares would trade on another securities exchange or in
the over-the-counter market and that price quotations would be reported by such
exchange or over-the-counter market or other sources. Such trading and the
availability of such quotations would, however, depend upon the number of
stockholders and/or the aggregate market value of the Shares remaining at such
time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration of the Shares under
the Exchange Act as described below and other factors.
Exchange Act Registration
The Shares and Company Debentures are currently registered under the
Exchange Act. The purchase of the 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 by the Company to
the Commission if the Shares are not listed on a "national securities exchange"
and there are fewer than 300 record holders of Shares. Termination of
registration of the Shares under the Exchange Act would substantially reduce
the information required to be furnished by the Company to its stockholders and
the Commission and would make certain provisions of the Exchange Act, such as
the short-swing profit recovery provisions of Section 16(b) of the Exchange Act
and the requirements of furnishing a proxy statement in connection with
stockholders' meetings pursuant to Section 14(a) of the Exchange Act, no longer
applicable to the Company. If the Shares are no longer registered under the
Exchange Act, the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions would no longer be applicable to the
Company. Furthermore, the ability of "affiliates" of the Company and persons
holding "restricted securities" of the Company to dispose of such securities
pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended,
may be impaired or eliminated. However, so long as any the Company Debentures
remain registered under the Exchange Act, the Company may remain subject to the
requirements of the Exchange Act with respect to the filing with the Commission
of publicly available annual, periodic and certain other reports. If, as a
result of the purchase of Shares pursuant to the Offer or the Merger, the
Company is no longer required to maintain registration of the Shares under the
Exchange Act, the Purchaser intends to cause the Company to apply for
termination of such registration.
14
<PAGE>
Based upon publicly available information, the Purchaser believes that, as
of the date of this Offer to Purchase, the Rights are registered under the
Exchange Act and are listed on the NYSE, but are attached to the Shares and are
not separately transferable. As a result of the commencement of the Offer by
the Purchaser, the Distribution Date will be August 22, 1997 unless, prior to
such date, the Company's Board of Directors redeems the Rights or delays such
Distribution Date. See Section 11. According to the Company 8-A, as soon as
practicable after the occurrence of the Distribution Date, Rights Certificates
will be sent to all holders of Rights and the Rights will become transferable
apart from the Shares. See Section 11. If the Distribution Date occurs and the
Rights separate from the Shares, the foregoing discussion with respect to the
effect of the Offer on the market for the Shares, stock exchange listings and
Exchange Act registration would apply to the Rights in a similar manner.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will be delisted from all stock exchanges and the registration of
the Shares under the Exchange Act will be terminated following the consummation
of the Merger.
Margin Regulations
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which have 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 such as the number of
record holders of the Shares and the number and market value of publicly held
Shares, following the purchase of Shares pursuant to the Offer, the Shares may
no longer constitute "margin securities" for purposes of the Federal Reserve
Board's margin regulations and, therefore, could no longer be used as
collateral for Purpose Loans made by brokers. In addition, if registration of
the Shares under the Exchange Act were terminated, the Shares would no longer
constitute "margin securities."
8. Certain Information Concerning the Company.
The Company is a Delaware corporation with its principal executive offices
located at 100 Sea Horse Drive, Waukegan, Illinois 60085.
According to the Company's Annual Report on Form 10-K for the year ended
September 30, 1996 (the "Company 10-K"), the Company is engaged principally in
the manufacturing and marketing of marine engines, boats and marine parts and
accessories principally for recreational use. Most of the Company's principal
products are sold throughout the world.
The following selected consolidated financial data of the Company and its
subsidiaries for the three fiscal years ended September 30, 1996 have been
taken or derived from the audited financial statements contained in the Company
10-K, and the consolidated financial data for the nine months ended June 30,
1997 and the nine months ended June 30, 1996 have been taken or derived from
the unaudited financial statements contained in the June 1997 Form 10-Q. More
comprehensive financial information for such period is included in the Company
10-K and the June 1997 Form 10-Q, and the financial data set forth below is
qualified in its entirety by reference to such reports, including the financial
statements contained therein. Such reports may be examined and copies may be
obtained from the offices of the Commission in the manner set forth below.
15
<PAGE>
Outboard Marine Corporation
Selected Consolidated Financial Data
(in millions except per Share amounts)
<TABLE>
<CAPTION>
Nine Months Ended Fiscal Year Ended
June 30, September 30,
--------------------------- -------------------------------------------
1997 1996 1996 1995 1994
------------ ------------ -------------- ------------ -----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales .................................... $ 709.9 $ 808.6 $ 1,121.5 $ 1,229.2 $ 1,078.4
Net earnings (Loss) ........................... (26.7 ) (14.9 ) (7.3) 51.4 48.5
Primary net earnings (loss) per Share ......... (1.32) (0.74) (.36) 2.56 2.42
Fully diluted earnings (loss) per Share ...... (1.32) (0.74) (.36) 2.33 2.22
Dividends declared per Share .................. .20 .30 .40 .40 .40
</TABLE>
<TABLE>
<CAPTION>
At At
June 30, September 30,
1997 1996 1995
------------ --------- --------
(Unaudited)
<S> <C> <C> <C>
Balance Sheet Data:
Total assets ................................. $ 825.1 $ 873.7 $ 907.0
Total current assets ........................ 439.8 467.5 502.2
Total current liabilities ..................... 241.0 253.3 248.8
Long-term debt .............................. 172.6 177.6 177.4
Total shareholders' investment ............... 203.2 237.6 255.8
</TABLE>
The information concerning the Company contained herein has been taken
from or is based upon reports and other documents on file with the Commission
or otherwise publicly available. Although the Purchaser does not have any
knowledge that would indicate that any statements contained herein based upon
such reports and documents are untrue, the Purchaser does not take any
responsibility for the accuracy or completeness of the information contained in
such reports and other documents 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 that are unknown to the Acquirors.
The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files 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, stock options granted to
them, the principal holders of the Company's securities and any material
interests of such persons in transactions with the Company. Such reports, proxy
statements and other information may be inspected at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and are also available for inspection and copying
at the regional offices of the Commission in New York (Seven World Trade
Center, Suite 1300, New York, New York 10048) and Chicago (Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511). Copies of such
material can also be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. Such material may also be accessed electronically by means
of the Commission's home page on the World Wide Web (www.sec.gov). In addition,
information about the Company can be inspected at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York, 10005. All of the
information with respect to the Company, the DDC Offer and the DDC Merger
Agreement set forth in this Offer to Purchase has been derived from publicly
available information.
9. Certain Information Concerning the Purchaser, the Parent and
Others. The Purchaser, a Delaware corporation, was recently incorporated and
has not engaged in any business since its incorporation other than that
incident to its organization and in connection with the Offer. All of the
outstanding capital stock of the Purchaser is owned by the Parent. The Parent,
a Delaware limited liability company, was recently organized pursuant to an
operating agreement (the "Parent LLC Agreement") and has not engaged in any
business since its
16
<PAGE>
organization other than that incident to its organization and in connection
with the Offer. Neither the Purchaser nor the Parent is expected to engage in
any business other than in connection with its respective organization, the
Offer and the Merger.
The members of the Parent are Greenlake, QSP and QIP. Each of Greenlake,
QSP and QIP has approximately a 30.5%, 34.75% and 34.75% interest in the
Parent, respectively. Greenlake is controlled by Messrs. Alfred D. Kingsley and
Gary K. Duberstein, each of whom are principals of Greenway Partners, L.P. QSP
is an indirect subsidiary of Quasar International Fund N.V. QIP is the
principal operating subsidiary of Quantum Industrial Holdings Ltd. Quasar and
QIH are investment funds which have as their principal investment advisors
Soros Fund Management LLC, of which Mr. George Soros serves as Chairman.
The principal executive offices of the Purchaser and the Parent are
located at c/o Greenway Partners, L.P., 277 Park Avenue, 27th Floor, New York,
New York 10172.
QIH and QIP. QIH is a British Virgin Islands corporation, organized in
1994, which makes investments under the general supervision of SFM LLC, a
Delaware limited liability company, its principal investment advisor. QIH has
its principal office at Kaya Flamboyan 9, Willemstad, Curacao, Netherlands
Antilles. QIH engages in its investment program principally through its
consolidated subsidiary, QIP. QIP's principal address is Kaya Flamboyan 9,
Willemstad, Curacao, Netherlands Antilles. Current information concerning the
directors and executive officers of QIH and QIP is set forth on Schedule I
hereto.
QIH Management Investor, L.P. ("QIHMI"), an investment advisory firm
organized as a Delaware limited partnership, is a minority shareholder of, and
has investment discretion with respect to the portfolio assets held for the
account of, QIP. The principal business of QIHMI is to provide management and
advisory services to, and to invest in, QIP and related entities, including
QSP. QIH Management, Inc. ("QIH Management"), a Delaware corporation of which
Mr. Soros is the sole shareholder, is the sole general partner of QIHMI. The
principal business of QIH Management is to serve as the sole general partner of
QIHMI. The name, business address, citizenship, present principal occupation or
employment, five year employment history and citizenship of each director and
executive officer of QIH Management is set forth on Schedule I hereto. QIHMI
and QIH Management have their principal offices at 888 Seventh Avenue, 33rd
Floor, New York, New York 10106.
Mr. Soros has agreed with SFM LLC that he will, among other things, use
his best efforts to cause QIH Management, as the general partner of QIHMI, to
act at the direction of SFM LLC, which agreement to so act shall terminate upon
the earlier of (a) the assignment to SFM LLC of the legal and beneficial
ownership interest in QIH Management and (b) the assignment to SFM LLC of the
general partnership interest in QIHMI.
The business of SFM LLC is managed through a Management Committee (the
"SFM Management Committee") comprised of Mr. Soros, Mr. Stanley F.
Druckenmiller and Mr. Gary Gladstein. SFM LLC has its principal office at 888
Seventh Avenue, 33rd Floor, New York, New York 10106. Its principal business is
to serve, pursuant to contract, as the principal investment manager to several
foreign investment companies, including QIH (the "SFM Clients"). Mr. Soros, as
Chairman of SFM LLC, has the ability to direct the investment decisions of SFM
LLC and as such may be deemed to have investment discretion over the securities
held for the accounts of the SFM Clients. Mr. Druckenmiller, as Lead Portfolio
Manager of SFM LLC, has the ability to direct the investment decisions of SFM
LLC and as such may be deemed to have investment discretion over the securities
held for the accounts of the SFM Clients. The name, business address, present
principal occupation or employment, five year employment history and
citizenship of each managing director of SFM LLC are set forth in Schedule I
hereto.
The principal occupation of Mr. Soros, a United States citizen, is his
direction of the activities of SFM LLC, which is carried out in his capacity as
Chairman of SFM LLC at SFM LLC's principal office, a position he has held since
January 1997. From 1987 through January of 1997 Mr. Soros was the sole
proprietor of Soros Fund Management, the predecessor of SFM LLC. The principal
occupation of Mr. Druckenmiller, a United States citizen, is his position as
Lead Portfolio Manager and a Member of the SFM Management Committee, which is
carried out at SFM LLC's principal office.
QIH is not subject to the informational reporting requirements of the
Exchange Act, and, accordingly, does not file reports or other information with
the Commission relating to its business, financial condition and other matters.
Set forth below is certain selected historical consolidated financial data of
QIH (which includes QIP). Balance sheet and income statement components of
portfolio companies are not consolidated.
17
<PAGE>
QUANTUM INDUSTRIAL HOLDINGS LTD.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN U.S. DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1996 1995 1994
---------------- ----------------- ----------------
<S> <C> <C> <C>
Earnings Data
Total investment income .................................... $ 276,689,174 $ 49,091,649 $ 9,614,222
Total expenses ............................................. 183,027,218 189,926,682 48,971,622
Net investment income .................................... 93,661,956 (140,835,033) (39,357,400)
Net increase in net assets resulting from operations ...... 357,057,390 653,441,119 81,309,699
Balance Sheet Data
Total assets ............................................. $5,803,224,397 $5,720,376,316 $ 602,218,890
Total liabilities .......................................... 3,312,783,028 3,566,344,418 423,231,700
Net assets applicable to outstanding shares ............... 2,490,441,369 2,154,031,898 1,476,562,644
</TABLE>
- ------------
The consolidated financial statements are generally in accordance with
accounting principles generally accepted in the United States, except for QIH's
valuation policies regarding a portion of its strategic investments. Securities
traded on securities exchanges (including The Nasdaq Stock Market) are valued
at the last sales price reported on the valuation date, and marketable
securities traded in an over-the-counter market for which last sales prices are
not reported are valued at the last reported bid price for securities held long
or the last reported ask price for securities sold short. Investments in
certain other funds advised by SFM LLC or its predecessor are valued at the
estimated net asset value issued by the respective funds. Investments in other
open-end investment companies are valued at the last reported net asset value
provided by such investment companies.
A significant portion of QIH's investments are non-marketable equity or
equity-related investments which are restricted and/or illiquid ("strategic
investments") and are carried at cost, including capitalized expenses such as
legal fees and other professional expenses. QIH's general policy is to mark
such investments up in value only when: (i) there is a definitive agreement to
dispose of the investment; or (ii) the class of securities held by QIH becomes
publicly traded (or when a class of securities held by QIH is freely
convertible into publicly traded securities); or (iii) an independent
corroboration of value with respect to a private equity investment occurs
through an "arm's length" purchase or sale of the same type of security as that
owned by QIH, whether or not QIH is involved in the transaction. Investments
will be written down below cost when QIH, in consultation with SFM LLC,
believes developments of a significant nature result in a diminution in value
that is other than temporary.
Quasar, Quasar Partner and QSP. Quasar is an open-end investment fund
organized in 1991 as a limited liability company under the laws of the
Netherlands Antilles to enable investors to participate in a diversified
investment portfolio under the general supervision of SFM LLC, its principal
asset manager. Quasar has its principal office at Kaya Flamboyan 9, Willemstad,
Curacao, Netherlands Antilles. Quasar invests all of its assets in Quasar
International Partners C.V., a Netherlands Antilles limited partnership
("Quasar Partners"), which is Quasar's operating unit. Quasar Partners is
making an investment in the Parent through its consolidated subsidiary, QSP.
Each of Quasar Partners and QSP has its principal office at Kaya Flamboyan 9,
Willemstad, Curacao, Netherlands Antilles. Current information concerning the
directors and executive officers of Quasar, Quasar Partners and QSP is set
forth on Schedule I hereto.
QIHMI is a minority shareholder, and has investment discretion with
respect to the portfolio assets held for the account of, QSP. Mr. Soros has
agreed with SFM LLC that he will, among other things, use his best efforts to
cause QIH Management, as the general partner of QIHMI, to act at the direction
of SFM LLC, which agreement to so act shall terminate upon the earlier of (a)
the assignment to SFM LLC of the legal and beneficial ownership interest in QIH
Management and (b) the assignment to SFM LLC of the general partnership
interest in QIHMI. Current information concerning the directors and executive
officers of QIH Management is set forth on Schedule I hereto.
Mr. Soros, as Chairman of SFM LLC, has the ability to direct the
investment decisions of SFM LLC and as such may be deemed to have investment
discretion over the securities held for the account of Quasar Partners. Mr.
Druckenmiller, as Lead Portfolio Manager of SFM LLC, has the ability to direct
the investment decisions of SFM LLC and as such may be deemed to have
investment discretion over the securities held for the account of Quasar
Partners. The name, business address, present principal occupation or
employment, five year employment history and citizenship of each managing
director of SFM LLC are set forth on Schedule I hereto.
18
<PAGE>
Quasar Partners is not subject to the informational reporting requirements
of the Exchange Act, and, accordingly, does not file reports or other
information with the Commission relating to its business, financial condition
and other matters. Set forth below is certain selected historical consolidated
financial data of Quasar Partners.
QUASAR INTERNATIONAL PARTNERS C.V.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN U.S. DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED JANUARY 31,
-------------------------------------------------------
1997 1996 1995
---------------- ----------------- ----------------
<S> <C> <C> <C>
Earnings Data
Total investment income .............................. $ 308,262,079 $ 220,085,825 $ 296,685,094
Total expenses ....................................... 293,372,427 410,318,825 202,971,972
Net investment income ................................. 14,889,652 (190,233,000) 93,713,122
Net increase/(decrease) in net assets/partner's capital
resulting from operations ........................... 124,058,875 934,585,985 (28,067,500)
Balance Sheet Data
Total assets .......................................... $8,816,290,024 $6,789,994,524 $3,087,125,402
Total liabilities .................................... 6,718,351,586 4,623,266,389 1,564,250,491
Partners' capital .................................... 2,097,938,438 2,166,728,135 1,522,874,911
</TABLE>
- ------------
The consolidated financial statements are in accordance with accounting
principles generally accepted in the United States. Securities traded on
securities exchanges (including The Nasdaq Stock Market) are valued at the last
sales price reported on the valuation date, and marketable securities traded in
an over-the-counter market for which last sales prices are not reported are
valued at the last reported bid price for securities held long or the last
reported ask price for securities sold short. Investments in certain other
funds advised by SFM LLC are valued at the estimated net asset value issued by
the respective funds. In the absence of quoted values or when quoted values are
not deemed by SFM LLC to be representative of market values for the
Partnership's positions, securities are valued at fair value as determined by
the Partnership's Managing Director in consultation with SFM LLC.
Greenlake. Greenlake Holdings LLC, a Delaware limited liability company,
was recently organized pursuant to an operating agreement (the "Greenlake LLC
Agreement"), and has not conducted any business other than incident to its
organization and the organization of the Parent for the purpose of commencing
the Offer. The principal business of Greenlake is to hold cash and Shares
contributed by its members that, prior to the consummation of the Offer, it has
agreed to transfer to Parent as a capital contribution. Greenlake is operated
and managed under the full and exclusive control of Mr. Kingsley and Mr.
Duberstein. The members of Greenlake include Greenway Partners, L.P., Greentree
Partners, L.P., Greenbelt Corp. on behalf of certain accounts managed by it,
and Greensea Offshore, L.P., all of which are managed by Messrs. Kingsley and
Duberstein (collectively, the "Greenway Entities") and certain other investors.
The Directors of the Purchaser are Mr. Kingsley, Mr. Duberstein and Mr.
Richard Katz. Mr. Kingsley is the Chief Executive Officer and President of the
Purchaser, and Mr. Duberstein is the Purchaser's Vice President, Secretary and
Treasurer. The principal office of Greenlake is located at 277 Park Avenue,
27th Floor, New York, New York 10172. See Schedule I hereto for additional
information concerning Messrs. Kingsley, Duberstein and Katz.
The Parent. The members of the Parent are QIP, QSP (collectively, the
"Group A Members") and Greenlake. The Parent is controlled by a Management
Committee comprised of up to a total of four Managers. Pursuant to the terms of
the Parent LLC Agreement, Greenlake has the right to appoint two designees to
the Parent's Management Committee and the holders of a majority of the Parent's
interests held by the Group A Members have the right to appoint two members to
the Parent's Management Committee. The Parent's Management Committee is
currently comprised of Messrs. Kingsley, Duberstein and Katz. From and after
the date that is twelve months after the Initial Capital Contribution Date (as
defined below), the holders of a majority of the Parent's interests held by the
Group A Members may elect to increase the size of the Parent's Management
19
<PAGE>
Committee to five members, three of whom will be designated by the holders of a
majority of the Parent's interest held by the Group A Members and two of whom
will be designated by Greenlake. The vote of three of the members of the
Parent's Management Committee is required for action by the Management
Committee. The Parent LLC Agreement also provides that the board of directors
(or similar governing body) of any subsidiary of the Parent, including the
Purchaser, will be persons approved by the Parent's Management Committee;
provided, however, that Greenlake will have the right to designate one member
of any such board of directors (or similar governing body).
Under the Parent LLC Agreement, the "Initial Capital Contribution Date" is
the earlier to occur of (i) one day prior to the date on which any subsidiary
of the Parent is required to accept Shares for payment pursuant to a tender
offer commenced by such subsidiary for Shares under the Exchange Act or (ii)
such date as may be determined by the Parent's Management Committee upon not
less than three business days' notice to the members of the Parent of such
date.
Pursuant to the Parent LLC Agreement, on the Initial Capital Contribution
Date, each of QSP and QIP has agreed to contribute $96,250,000 to the capital
to the Parent and Greenlake has agreed to contribute $48,500,000 and 2,000,000
Shares to the capital of the Parent. The members of Greenlake have
substantially completed the making of capital contributions to Greenlake that
will be sufficient to enable it to fulfill its commitment to make capital
contributions to the Parent. Pursuant to the Greenlake LLC Agreement, the
Greenway Entities contributed their beneficial ownership of the 2,000,000
Shares to Greenlake. The Greenway Entities acquired the 2,000,000 Shares in
open market transactions as described in the Schedule 13D (as amended, the
"Greenway Schedule 13D") of Greenway Partners, L.P., Greentree Partners, L.P.,
Greenhouse Partners, L.P., Greenhut, L.L.C., Greenbelt Corp., Greensea
Offshore, L.P., Greenhut Overseas, L.L.C., Alfred D. Kingsley and Gary K.
Duberstein, The Greenway Schedule 13D may be examined or copies thereof may be
obtained in the same manner as described in Section 8.
Pursuant to the Parent LLC Agreement, in the event that the Offer and the
Merger are not consummated and the Parent sells Shares contributed to it by
Greenlake that exceeds $16.00 per Share or the Parent receives cash or other
consideration for such Shares as a result of a merger or other business
combination of the Company that exceeds $16.00 per Share, the aggregate amount
of such excess price or consideration shall be applied as follows: (i) first,
to the payment of certain expenses incurred in connection with the formation of
the Parent and the Purchaser, obtaining financing in connection with the Offer
and the Merger, preparation of documentation in connection with the Offer and
the Merger, printing expenses, any fees and disbursements of attorneys,
accountants and other advisors, and any indemnity obligations of the Parent
under the Parent LLC Agreement; and (ii) the balance, if any, shall be
distributed as follows: (a) 80% to Greenlake and (b) 20% to Greenlake, QSP and
QIP on a pro rata basis based upon the respective amounts of cash contributed
by them as initial capital contributions to the Parent.
The foregoing summary of the Parent LLC Agreement is qualified in its
entirety by reference to the text of the Parent LLC Agreement, a copy of which
has been filed as Exhibit (a)(1) to the Tender Offer Statement on Schedule
14D-1 relating to the Offer (the "Purchaser Schedule 14D-1"). The Purchaser
Schedule 14D-1 may be inspected and copies of which may be obtained at the same
places and in the same manner as set forth in Section 8.
The name, citizenship, business address and present principal occupation
of each of the directors, executive officers or controlling persons of the
Acquirors are set forth in Schedule I to this Offer to Purchase.
Except as set forth elsewhere in this Offer to Purchase: (i) none of the
Acquirors nor, to the knowledge of the Acquirors, any of the persons listed on
Schedule I hereto or any affiliate, associate or majority-owned subsidiary of
the Parent or any of the persons so listed, beneficially owns or has a right to
acquire any Shares or any other equity securities of the Company; (ii) none of
the Acquirors nor to the knowledge of the Acquirors, any of the persons or
entities referred to in clause (i) above or any of their executive officers,
directors or subsidiaries has effected any transaction in the Shares or any
other equity securities of the Company during the past 60 days; (iii) none of
the Acquirors nor, to the knowledge of the Acquirors, any of the persons listed
in Schedule I hereto, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, the transfer or voting thereof, joint
ventures, loan
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or option arrangements, puts or calls, guarantees of loans, guarantees against
loss or the giving or withholding of proxies, consents or authorizations; (iv)
since October 1, 1993, there have been no transactions which would require
reporting under the rules and regulations of the Commission between any of the
Acquirors or any of their respective subsidiaries or affiliates or, to the best
knowledge of the Acquirors, any of the persons listed in Schedule I hereto, on
the one hand, and the Company or any of its executive officers, directors or
affiliates, on the other hand; (v) there have been no contracts, negotiations
or transactions between any of the Acquirors or any of their respective
subsidiaries or affiliates or, to the best knowledge of the Acquirors, any of
the persons listed in Schedule I hereto, on the one hand, and the Company or
its subsidiaries or affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets of the Company; (vi) none of the Acquirors nor to the knowledge of the
Acquirors, any of the persons listed on Schedule I hereto has, during the last
five years, (a) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), or (b) been 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.
10. Background of the Offer; Contacts with the Company.
On August 21, 1996, the Greenway Entities initially filed with the
Commission the Greenway Schedule 13D disclosing, among other things, the
Greenway Entities' beneficial ownership of 1,710,000 Shares (approximately 8.5%
of the Shares outstanding at such time).
On October 1, 1996, the Greenway Entities filed with the Commission
Amendment No. 1 to the Greenway Schedule 13D disclosing, among other things,
the Greenway Entities' beneficial ownership of 2,000,000 Shares (approximately
9.9% of the Shares outstanding at such time).
On August 1, 1997, the Greenway Entities filed with the Commission
Amendment No. 2 to the Greenway Schedule 13D disclosing, among other things,
that:
The [Greenway Entities] are actively exploring the possibility of making an
offer to the Company and/or its stockholders that would represent a
superior transaction for the shareholders of the Company as compared with
the transaction set forth in the Agreement and Plan of Merger, dated as of
July 8, 1997, among Detroit Diesel Corporation, OMC Acquisition Corp. and
the Company. There can be no assurance that the [Greenway Entities] will
determine to proceed with a competing offer.
On August 8, 1997, the Acquirors filed with the Commission a Tender Offer
Statement on Schedule 14D-1 commencing the Offer. Such Schedule 14D-1 also
constituted Amendment No. 3 to the Greenway Schedule 13D.
On August 8, 1997, the Purchaser commenced litigation in the Court of
Chancery for the State of Delaware seeking, among other things, an order
compelling the Company's Board of Directors to redeem the Rights or to amend
the Rights Agreement inapplicable to the Offer and the proposed Merger on the
grounds that failure to do so would constitute a breach of fiduciary duty to
the Company's stockholders.
On August 8, 1997, the Purchaser sent the following letter to the Board of
Directors of the Company:
The Board of Directors
Outboard Marine Corporation
100 Sea Horse Drive
Waukegan, Illinois 60085
Dear Sirs:
Greenmarine Acquisition Corp. ("Purchaser"), a wholly-owned subsidiary of
Greenmarine Holdings LLC ("Parent"), has today commenced an all cash tender
offer for all outstanding shares of common stock of Outboard Marine Corporation
(the "Company" or "Outboard Marine") at a price of $18.00 per share. Shares not
purchased in the tender would be acquired in a second-step merger at a price of
$18.00 per share cash. The
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investors in the Parent include an entity affiliated with Messrs. Alfred D.
Kingsley and Gary K. Duberstein of Greenway Partners, L.P. and two entities
associated with Soros Fund Management LLC. Entities affiliated with the Parent
currently hold 9.9% of the Company's outstanding stock.
The $18.00 per share consideration exceeds the consideration offered by
Detroit Diesel Corporation ("DDC") and its subsidiary, OMC Acquisition Corp.,
pursuant to the July 8, 1997 merger agreement (the "DDC Merger Agreement").
DDC's economically inferior offer is also inherently coercive because it is a
two-tier offer with an all cash payment in the first tier only, i.e., a tender
at $16 per share cash for 66 2/3% of the Company's shares to be followed by a
second-step merger in which stockholders will receive a combination of DDC
stock and cash. In light of the superior value offered in our tender, we
request that the Board of Directors of Outboard Marine recommend our proposal
to the Company's shareholders and withdraw its prior recommendation of the DDC
offer.
We are prepared to sit down immediately with you and your advisors to
negotiate and sign a merger agreement substantially in the form of the DDC
Merger Agreement. If you decline to negotiate a merger agreement with us, we
hope you will nevertheless agree that, in the context of the ongoing sale of
the Company, the shareholders of the Company have the right to choose between
competing offers. Accordingly, we request that the Board (a) immediately exempt
our tender from the operation of the Company's Rights Plan, as you have done
with respect to the economically inferior (and coercive) DDC offer, and (b)
take all other necessary action to render the sale of the Company impediments
in your charter inapplicable to our offer.
Thank you for your consideration and we look forward to meeting with you
and your representatives.
Very truly yours,
/s/ Alfred D. Kingsley
---------------------
Alfred D. Kingsley
Chief Executive Officer
and President
Except as described in this Offer to Purchase, there have been no
contacts, negotiations or transactions between any of the Acquirors, any of
their respective affiliates or subsidiaries or, to the best of any Acquiror's
knowledge, any of the persons listed on Schedule I, on the one hand, and the
Company or any of its affiliates, on the other hand, concerning a merger,
consolidation or acquisition, a tender offer or other acquisition of
securities, an election of directors, or sale or other transfer of a material
amount of assets.
11. Purpose of the Offer and the Merger.
Purpose of the Offer and the Merger
The purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. The purpose of the Merger is to acquire all
outstanding Shares not acquired pursuant to the Offer or otherwise. The Parent
and the Purchaser reserve the right to acquire additional Shares after
consummation of the Offer in open market purchases, through a tender offer, in
privately negotiated transactions or otherwise, in order to obtain a sufficient
number of Shares to approve the transactions contemplated hereby.
The Merger
The Parent currently intends, immediately following completion of the
Offer, to seek to consummate the Merger. The Parent intends that in the Merger,
each then outstanding Share (other than Shares owned by Parent, Purchaser or
any of their wholly owned subsidiaries, Shares held in the treasury of the
Company, and, if stockholder appraisal rights are available with respect to
Shares, Shares held by stockholders who perfect any available appraisal rights
under the DGCL) would be converted into the right to receive in cash the price
per Share paid by the Purchaser pursuant to the Offer.
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In general, pursuant to the DGCL the approval of both the stockholders and
the board of directors of a corporation is required to effect the merger of
that corporation with or into another corporation. Section 253 of the DGCL
provides, however, that if a parent corporation owns at least 90% of each class
of the outstanding shares of capital stock of a subsidiary corporation, the
parent corporation may merge with or into the subsidiary corporation without
any action or vote on the part of the board of directors or the other
stockholders of the subsidiary corporation. A merger effected under this law is
referred to herein as a "short-form merger."
Although the Parent intends to seek consummation of the Merger immediately
following the consummation of the Offer, subject to its ability to cause the
Purchaser to effect a "short-form merger" with the Company pursuant to Section
253 of the DGCL, certain terms of the Charter, the By-laws and Section 203 of
the DGCL may affect the ability of the Parent to obtain control of the Company
and to cause the Purchaser to consummate the Merger. Accordingly, the Parent
can give no assurance that the Merger will be consummated or as to the timing
of the Merger if it is consummated.
Classified Board. Unless the Merger is consummated pursuant to a
"short-form merger", the approval the Company's Board of Directors will be
required under the DGCL to effect the Merger. If the Board of Directors of the
Company in office at the time of the consummation of the Offer were to refuse
to approve the Merger (or any transaction or corporate action proposed by the
Purchaser that required the approval of the Board of Directors), the Purchaser,
in order to consummate such transaction or cause the Company to take such
action, would have to replace at least a majority of the Board of Directors
with its own designees. Certain provisions of the Charter and By-laws could
prevent the Purchaser from replacing or electing a majority of the Board of
Directors for up to two years. Pursuant to Article Fourteenth of the Charter,
the Board of Directors is divided into three classes with each class elected
for a term of three years and one class elected at the Company's annual meeting
of stockholders each year (the "Classified Board Provision"). Pursuant to
Article III, Section 3 of the By-laws, the number of directors can be no less
than nine and no more than 12 and can only be established by a resolution of
the Board of Directors (the "Director Number Provision"). Pursuant to Article
III, Section 6 of the By-laws, directors can be removed from the Board of
Directors only for cause and only by the affirmative vote of holders
representing 80% or more of all the shares of stock of the Company entitled to
vote for the election of directors (the "Director Removal Provision"). Article
III, Section 9 of the By-laws provides that nominations of persons for election
to the Company's Board of Directors may be made by stockholders' notice if such
notice is delivered to the Secretary of the Company at its principal executive
offices not less than 60 nor more than 90 days prior to the date one year from
the date of the immediately preceding annual meeting of stockholders. According
to publicly available information, the last annual meeting of the Company's
stockholders was held on January 16, 1997. As a result of these provisions, at
least two annual meetings of the Company's stockholders, absent the directors'
removal in accordance with the Director Removal Provision or their
resignations, would be required to elect new directors comprising a majority of
the Board of Directors who could approve the Merger (or any similar transaction
requiring the approval of the Board of Directors). According to the Charter,
amending the Classified Board Provision requires the affirmative vote of the
holders of two-thirds ( 2/3) of all shares of the outstanding stock of the
Company entitled to vote thereon. According to the By-laws, the Director Number
Provision can only be amended by action of two-thirds ( 2/3) of the
stockholders or by two-thirds ( 2/3) of the then current Board of Directors.
However, the Director Removal Provision can be amended by action of either a
majority of the stockholders or a majority of the Board of Directors.
Stockholder Meetings. To the extent that a special stockholders meeting is
necessary to effect the Merger and gain control of the Company, certain By-law
provisions relating thereto could further impede any such change of control.
Article II, Section 4 provides that special meetings of stockholders can be
called only by the Chairman of the Board, the Chief Executive Officer or
three-quarters ( 3/4) of the entire Board of Directors. At such meetings, the
election of directors cannot take place. Amending Article II, Section 4
requires action by two-thirds ( 2/3) of either the stockholders or the then
current Board of Director. In addition, Article II, Section 9 of the By-laws
provides that any action required or permitted to be taken by the stockholders
of the Company must be effected at a duly called annual or special meeting of
the stockholders and may not be effected by any consent in writing by the
stockholders. The Purchaser will seek to have either the Chairman of the Board,
the Chief Executive Officer or three-quarters of the Board of Directors call a
special meeting if it becomes necessary to effect the Merger. There can be no
assurance, however, that such a meeting will be so called.
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The Offer does not constitute a solicitation of proxies for any meeting of
the Company's stockholders. Any such solicitation which the Purchaser might
make would be made only pursuant to separate proxy materials complying with the
requirements of Section 14(A) of the Exchange Act.
Supermajority and "Fair Price" Clauses. Article Seventeenth of the Charter
requires the approval of the holders of two-thirds ( 2/3) of the outstanding
voting stock of the Company in all cases in which a vote of stockholders is
taken with respect to (a) the proposed adoption of any merger of the Company
with or into another corporation or the consolidation of the Company with
another corporation, (b) the authorization of any sale, lease or exchange of
all or substantially all of the assets of the Company or (c) a proposed
dissolution of the Company (the "Two-Thirds Voting Requirement"). Amending the
two-thirds voting requirement requires the affirmative vote or consent of the
holders of two-thirds ( 2/3) of all shares of the outstanding stock of the
Company entitled to vote thereon.
Article Eighteenth of the Charter requires the affirmative vote of the
holders of not less than 75% of the outstanding voting shares of the Company
held by stockholders other than a "Related Person" (defined below) to approve a
"Business Combination" (defined below), unless: (i) the "Continuing Directors"
(defined below) of the Company by at least a majority vote of such Continuing
Directors have expressly approved such Business Combination either in advance
of or subsequent to such Related Person's having become a Related Person; or
(ii) the cash or fair market value (as determined by at least a majority of the
Continuing Directors) of the property, securities or other consideration to be
received per share by holders of voting shares of the capital stock of the
Company in the Business Combination is not less than the "Highest Equivalent
Price" paid by the Related Person in acquiring any of its holdings of the
Company's voting stock (the "75% Voting Requirement" and together with the
Two-Thirds Voting Requirement, the "Supermajority Vote Requirements"). Amending
the 75% Voting Requirement requires the affirmative vote of the holders of the
75% of the combined voting power of the outstanding of voting shares held by
stockholders other than any Related Person or its "Affiliates" (defined below)
or its "Associates" (defined below).
The term "Business Combination" means (i) any merger or consolidation of
the Company or a subsidiary of the Company with or into a Related Person, (ii)
any sale, lease, exchange, transfer or other disposition, of all or any
"Substantial Part" of the assets either of the Company or of a subsidiary of
the Company to a Related Person, (iii) the adoption of any plan or proposal for
the liquidation or dissolution of the Company proposed by or on behalf of any
Related Persons, (iv) any sale, lease, exchange, transfer or other disposition,
of all or any Substantial Part of the assets of a Related Person to the Company
or a subsidiary of the Company, (v) the issuance of any securities of the
Company or a subsidiary of the Company to a Related Person other than the
issuance on a pro rata basis to all holders of stock of the same class pursuant
to a stock split or stock dividend, (vi) any reclassification of securities,
recapitalization of the Company, or any merger or consolidation of the Company
with any of its subsidiaries or any other transaction that would have the
effect directly or indirectly of increasing the voting power of a Related
Person, and (vii) any agreement, contract or other arrangement providing for
any of the transactions described in this definition of Business Combination.
The term "Related Person" means (a) any person which, together with its
Affiliates and Associates, becomes the "Beneficial Owner" of an aggregate of
20% or more of the outstanding voting stock of the Company, and (b) any
Affiliate or Associate of any such persons. "Related Person" does not include
(1) a person whose acquisition of such aggregate percentage of voting shares
was approved in advance by at least a majority of the Continuing Directors or
(2) any trustee or fiduciary when acting in such capacity with respect to any
person and any other person with whom such person or any Affiliate or Associate
thereof has any agreement, arrangement or understanding, directly or
indirectly, for the purpose of acquiring, holding, voting or disposing of
voting shares.
The term "Substantial Part" means an amount equal to 10% or more of the
fair market value, as determined by at least a majority of the Continuing
Directors, of the total consolidated assets of the Company and its subsidiaries
as of the end of its most recent fiscal year prior to the time the
determination is being made.
The term "Beneficial Owner" means any person who beneficially owns any
voting stock of the Company within the meaning ascribed in Rule 13d-3 under the
Exchange Act or who has the right to acquire any such beneficial ownership
(whether or not such right is exercisable immediately) pursuant to any
agreement, contract, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise.
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The term "Continuing Director" means a director of the Company who is not
an Affiliate or Associate of the Related Person involved in the relevant
Business Combination and (i) who was a member of the Board of Directors of the
Company immediately prior to the time that such Related Person became a Related
Person or (ii) whose initial election as a director of the Company recommended
by the affirmative vote of a majority of the Continuing Directors then in
office, provided that, in either such case, such Continuing Director has
continued in office after becoming a Continuing Director.
A Related Person is deemed to have acquired voting shares at the time when
such Related Person became the Beneficial Owner thereof. The price deemed to
have been paid by a Related Person for voting shares of which an Affiliate or
Associate is the Beneficial Owner is the price, as determined by vote of at
least a majority of the Continuing Directors, which is the highest of (i) the
price paid upon the acquisition thereof by the relevant Affiliate or Associate
(if any, and whether or not such Affiliate or Associate was an Affiliate or
Associate at the time of such acquisition), (ii) the highest market price of
such voting shares at the time when the Related Person became the Beneficial
Owner thereof and (iii) the highest price previously paid by such Related
Person or an Affiliate or Associate thereof for such voting shares.
The terms "Highest Per Share Price" and "Highest Equivalent Price" means
(a) if there is only one class of capital stock of the Company issued and
outstanding, the Highest Per Share Price means the higher of (i) the highest
price that can be determined, by a majority of the continuing Directors, to
have been paid at any time by the Related Person for any share or shares of the
class of capital stock and (ii) the fair market value per share of such capital
stock, as determined by a majority of the Continuing Directors, immediately
prior to the time the relevant Business Combination is first publicly
announced, and (b) if there is more than one class of capital stock of the
Company issued and outstanding, with respect to each class and series of
capital stock of the Company, the amount determined by a majority of the
Continuing Directors, on whatever basis they believe is appropriate, to be the
higher of (i) the highest per share price equivalent of the highest price that
can be determined to have been paid at any time by the Related Person for any
share or shares or any class or series of capital stock of the Company and (ii)
the equivalent fair market value per share of such capital stock, as determined
by a majority of the Continuing Directors, immediately prior to the time the
relevant Business Combination is first publicly announced. In determining the
Highest Per Share Price and Highest Equivalent Price, (a) all purchases by the
Related Person are to be taken into account regardless of whether the shares
were purchased before or after the Related Person became a Related Person and
(b) the Highest Per Share Price and the Highest Equivalent Price is to include
any brokerage commissions, transfer taxes and soliciting dealers' fees or other
value paid in connection with such purchases. In the case of any Business
Combination with a Related Person, the Continuing Directors will determine the
Highest Equivalent Price for each outstanding class and series of the capital
stock of the Company.
The terms "Affiliate" and "Associate" have the same meaning as in Rule
12b-2 under the Exchange Act.
The Purchaser believes that it and the Parent collectively will be deemed
to be a Related Person for purposes of Article Eighteenth the Charter upon
consummation of the Offer.
The foregoing summary of certain provisions of the Charter and the By-laws
are qualified by reference to the text thereof as filed by the Company with the
Commission and which can be examined or copies obtained as set forth in Section
8.
Delaware Business Combination Law. Section 203 of the DGCL provides that a
Delaware corporation such as the Company may not engage in any Business
Combination (defined to include a variety of transactions, including a merger)
with any Interested Stockholder (defined generally as any person that, directly
or indirectly, beneficially owns 15% or more of the outstanding voting stock of
the corporation), or any affiliate of an Interested Stockholder, for three
years after the date on which the Interested Stockholder became an Interested
Stockholder. The three-year prohibition on Business Combinations with
Interested Stockholders (the "Business Combination Prohibition") does not apply
if certain conditions, described below, are satisfied. Section 203 of the DGCL
provides that a "beneficial owner" of voting stock includes any person who,
individually or together with any of its affiliates or associates, has (i) the
right to acquire voting stock (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding or upon
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the exercise of conversion rights, exchange rights, warrants or options or
otherwise, (ii) the right to vote such stock pursuant to any agreement,
arrangement or understanding, or (iii) any agreement, arrangement or
understanding for the purposes of acquiring, holding, voting or disposing of
such stock with any other person that beneficially owns, directly or
indirectly, such stock.
The Business Combination Prohibition does not apply to a particular
Business Combination between a corporation and a particular Interested
Stockholder if (i) prior to the date such Interested Stockholder became an
Interested Stockholder, the board of directors of such corporation approves
either the Business Combination or the transaction which resulted in the
stockholder becoming an Interested Stockholder, or (ii) upon consummation of
the transaction which resulted in the stockholder becoming an Interested
Stockholder, the Interested Stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced, excluding
for purposes of determining the number of shares outstanding those shares owned
by (x) persons who are directors and also officers and (y) employee stock plans
in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in a
tender or exchange offer, or (iii) on or subsequent to the date the stockholder
becomes an Interested Stockholder, the Business Combination is approved by the
board of directors of such corporation and authorized at an annual or special
meeting of stockholders, and not by written consent, by the affirmative vote of
at least 66 2/3% of the outstanding voting stock which is not owned by the
Interested Stockholder.
The foregoing summary of Section 203 of the DGCL does not purport to be
complete and is qualified in its entirety by reference to the provisions of
Section 203 of the DGCL
If the Minimum Condition is satisfied, the Business Combination
Prohibition would not apply to the Merger by virtue of the Purchaser owning at
least 85% of the voting stock of the Company at the time the Merger would be
commenced. Alternatively, the prohibition contained in Section 203 would not
apply to the Merger if the Company's Board of Directors adopt a resolution
approving the Offer and the Merger prior to consummation of the Offer the for
purposes of Section 203. There can be no assurance that the Company's Board
will adopt such a resolution.
The Rights. According to the Company 8-A, on April 24, 1996, the Board of
Directors of the Company declared a dividend distribution of one Right for each
outstanding Share. The dividend is payable to the stockholders of record on
June 23, 1996 (the "Record Date"), and with respect to Shares issued thereafter
until the Distribution Date and, in certain circumstances, with respect to
Shares issued after the Distribution Date. Except as set forth below, each
Right, when it becomes exercisable, entitles the registered holder to purchase
from the Company one one-thousandth (1/1000th) of a share of Series A Junior
Participating Preferred Stock, $10.00 par value per share (the "Preferred
Shares"), of the Company at a price of $115.00 per one one-thousandth
(1/1000th) of a Preferred Share (the "Purchase Price"), subject to adjustment.
According to the Company 8-A, initially, the Rights will be attached to
all Share Certificates then outstanding, and no separate Right Certificates
will be distributed. The Rights will separate from the Shares upon the earliest
to occur of (i) a person or group of affiliated or associated persons having
acquired beneficial ownership of 15% or more of the outstanding Shares, (ii) 10
days (or such later date as the Board may determine) following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer,
the consummation of which would result in a person or group of affiliated or
associated persons becoming an Acquiring Person (as hereinafter defined), or
(iii) 10 days after the Board of Directors determines that a person or group of
affiliated or associated persons has become an Adverse Person (as hereinafter
defined) (the "Distribution Date"). A person or group whose acquisitions of
Shares cause a Distribution Date pursuant to clause (i) above is an "Acquiring
Person," (it being deemed, however, that DDC and OMC Acquisition are not
Acquiring Persons under the Rights Agreement) with certain exceptions as set
forth in the Rights Agreement. The date that a person or group is first
publicly announced to have become such by the Company or such Acquiring Person
is the "Stock Acquisition Date." A person or group is an "Adverse Person" when
the Board of Directors of the Company determines that (x) such person or group
has acquired beneficial ownership of a substantial number of Shares (which in
no event will represent less than 10% of all outstanding Shares), and (y) such
ownership is intended to cause the Company to repurchase the Shares held by
such person or group, or such ownership is causing or is reasonably likely to
cause a material adverse impact on the business or prospects of the Company.
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According to the Company 8-A, until the Distribution Date, the Rights will
be transferred with and only with the Shares. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new Share Certificates issued
after the Record Date upon transfer or new issuance of Shares will contain a
notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any Share Certificates outstanding as of the Record
Date, even without such notation or a copy of the Summary of Rights contained
in the Company Form 8-A being attached thereto, will also constitute the
transfer of the Rights associated with the Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
Rights Certificates will be mailed to the holders of record of the Shares as of
the close of business on the Distribution Date (and to each initial record
holder of certain Shares issued after the Distribution Date), and such separate
Right Certificates alone will evidence the Rights.
According to the Company 8-A, the Rights are not exercisable until the
Distribution Date and will expire at the close of business on June 23, 2006
unless, earlier, there is (i) a redemption by the Company, (ii) an exchange by
the Company of one Share for each Right, or (iii) the consummation of
transactions contemplated by the DDC Merger Agreement.
According to the Company 8-A, in the event that any person becomes an
Acquiring Person (except (i) pursuant to an offer which is for all outstanding
Shares at a price and on terms which the independent directors determine to be
fair and otherwise in the best interests of the Company and its stockholders
and (ii) for certain persons who report their ownership on Schedule 13G under
the Exchange Act or on Schedule 13D under the Exchange Act, provided that they
do not state any intention to, or reserve the right to, control or influence
the Company and such persons certify that they became an Acquiring Person
inadvertently and they agree that they will not acquire any additional Shares
or an Adverse Person (each, a "Triggering Event"), then the Rights will
"flip-in" and entitle each holder of a Right (the "Flip-In Right") to receive
upon its exercise the number of Shares having a value (immediately prior to
such Triggering Event) equal to two times the exercise price of the Right.
Notwithstanding the foregoing, following the occurrence of the event described
above, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person, Adverse
Person, or any affiliate or associate thereof will be null and void.
According to the Company 8-A, in the event that, at any time following a
Triggering Event, (i) the Company is acquired in a merger or other business
combination transaction in which its common stock does not remain outstanding
or is changed, or (ii) more than 50% of the Company's assets or earning power
is sold or transferred, then each holder of a Right (except Rights which
previously have been voided as set forth above) shall thereafter have the right
(the "Flip-Over Right") to receive, upon exercise common shares of the
acquiring company having a value equal to two times the exercise price of the
Right.
According to the Company 8-A, Preferred Shares purchasable upon exercise
of the Rights will not be redeemable. Each Preferred Share will be entitled to
a preferential quarterly dividend payment of the greater of (i) $0.01 per share
and (ii) an aggregate dividend per share of 1,000 times the dividend declared
per Share. In the event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation payment per share in an
amount equal to the greater of 1,000 times $115.00 or 1,000 times the payment
made per Share plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"); thereafter, and after the holders of
the Shares receive a liquidation payment of an amount equal to the quotient
obtained by dividing the Series A Liquidation Preference by 1,000 (subject to
certain adjustments for stock splits, stock dividends and recapitalizations
with respect to the Shares), the holders of the Preferred Shares and the
holders of the Shares will share the remaining assets in the ratio of 1,000 to
1 (as adjusted) for each Preferred Share and Share so held, respectively.
Finally, in the event of any merger, consolidation or other transaction in
which Shares are exchanged, each Preferred Share will be entitled to receive
1,000 times the amount received per Share. These rights are protected by
customary antidilution provisions. Each Preferred Share entitles its holder to
1,000 votes (subject to certain adjustments) on all matters submitted to a vote
of the Company's stockholders. In the event that the amount of accrued and
unpaid dividends on the Preferred Shares is equivalent to six full quarterly
dividends or more, the holders of the Preferred Shares shall have the right,
voting as a class, to elect two directors in addition to the directors elected
by the holders of the Shares until all cumulative dividends on the Preferred
Shares have been paid through the last quarterly dividend payment date.
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According to the Company 8-A, with certain exceptions, no adjustment in
the Purchase Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional Preferred
Shares will be issued (other than fractions which are one one-thousandth
(1/1000th) or integral multiples of one one-thousandth (1/1000th) of a
Preferred Share) and in lieu thereof, an adjustment in cash will be made based
on the market price of the Preferred Shares on the last trading day prior to
the date of exercise.
According to the Company 8-A, at any time prior to the earlier of (i) 10
days following the Stock Acquisition Date, or (ii) the expiration of the
Rights, the Company may redeem the then outstanding Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price") (payable in cash
or, at the Company's election, in Shares), which redemption shall be effective
upon the action of the Board. The Board of Directors of the Company may not
redeem any Rights after it has determined any person to be an Adverse Person.
According to the Company 8-A, until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
The foregoing summary of the Rights Agreement does not purport to be
complete and is qualified in its entirety by reference to the Company 8-A and
the text of the Rights Agreement as set forth as an exhibit thereto, filed by
the Company with the Commission, copies of which may be obtained in the manner
set forth in Section 8 (except that copies thereof may not be available at the
regional offices of the Commission).
The Purchaser and the Parent believe that under the circumstances of the
Offer, and under applicable law, the Board of Directors of the Company has a
fiduciary obligation to redeem the Rights (or amend the Rights Agreement to
make the Rights inapplicable to the Offer and the proposed Merger), and the
Purchaser and the Parent are hereby requesting that the Company's Board of
Directors do so. However, there can be no assurance that the Board will redeem
the Rights (or amend the Rights Agreement). The Purchaser and the Parent have
commenced litigation in the Court of Chancery for the State of Delaware
seeking, among other things, an order compelling the Company's Board of
Directors to redeem the Rights or to amend the Rights Agreement to make the
Rights inapplicable to the Offer and the proposed Merger on the grounds that
failure to do so would constitute a breach of fiduciary duty to the Company's
stockholders. There can be no assurance that such an order will be obtained.
If the Rights Condition is not satisfied and Purchaser elects, in its sole
discretion, to waive the Rights Condition and consummate the Offer, if there
are outstanding Rights which have not been acquired by Purchaser, Purchaser
will evaluate its alternatives. Such alternatives could include purchasing
additional Rights in the open market, in privately negotiated transactions, in
another tender or exchange offer or otherwise. Any such additional purchase of
Rights could be for cash or other consideration. Under such circumstances, the
Merger might be delayed or abandoned as impracticable. The form and amount of
consideration to be received by the holders of Shares in the Merger, if
consummated, might be subject to adjustment to compensate Purchaser for, among
other things, the costs of acquiring Rights and a portion of the potential
dilution cost to Purchaser of Rights not owned by Purchaser and its wholly
owned subsidiaries at the time of the Merger. In such event, the value of the
consideration to be exchanged for Shares in the Merger could be substantially
less than the consideration paid in the Offer. In addition, Purchaser may elect
under such circumstances not to consummate the Merger.
Unless the Rights are redeemed, stockholders will be required to tender
one Right for each Share tendered in order to effect a valid tender of such
Share in accordance with the procedures set forth in Section 3. If separate
certificates for the Rights are not issued, a tender of Shares will also
constitute a tender of the associated Rights. If a Distribution Date occurs,
stockholders will be required to tender one Right for each Share tendered in
order to effect a valid tender of Shares. See Sections 1 and 3.
Plans for the Company
The Parent has made a preliminary review of, and will continue to review,
on the basis of available information, various possible business strategies
that it might consider if it acquires control of the Company. If Parent
acquires control of the Company, Parent intends to conduct a detailed review of
the Company and its assets, pension plans, corporate structure, dividend
policy, capitalization, operations, properties, policies, management
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and personnel and consider what, if any, changes or sale of assets would be
desirable in light of the circumstances which then exist. Such changes could
include, among other things, changes in the Charter and By-laws or in the
Company's business, corporate structure, capitalization or management. As
described above, however, the Parent's ability to effect any changes or
transactions, and the timing thereof, will depend in part on the Parent's
ability to gain control of the Company's Board of Directors, as well as the
provisions of the Charter, the By-laws and Section 203. The Parent, however,
has no present plans or proposals that would result in an extraordinary
corporate transaction, such as merger, reorganization, liquidation, relocation
of operations, or sale or transfer of assets, involving the Company or any of
its subsidiaries, or any material changes in the Company's corporate structure,
business or composition of its management.
Appraisal Rights
No appraisal rights are available in connection with the Offer. Holders of
Shares will be entitled to appraisal rights under Section 262 of the DGCL in
connection with the Merger (including if the Merger is effected pursuant to the
"short-form merger" provisions of Section 253 of the DGCL) and, accordingly,
will be entitled to demand appraisal of, and payment in cash of the fair value
of, their Shares. Such rights, if the statutory procedures were complied with,
could lead to a judicial determination of the fair value (excluding any element
of value arising from the accomplishment or expectation of the Merger) required
to be paid in cash to such dissenting holders for their Shares. Any such
judicial determination of the fair value of Shares could be based upon
considerations other than, or in addition to, the price paid in the Offer and
the market value of the Shares, including asset values and the investment value
of the Shares. The value so determined could be more or less than the purchase
price per Share pursuant to the Offer or the consideration per Share to be paid
in the Merger.
The foregoing summary of Section 262 of the DGCL does not purport to be
complete and is qualified in its entirety by reference to Section 262 of the
DGCL. The preservation and exercise of appraisal rights requires strict
adherence to the applicable provisions of Section 262 of the DGCL.
"Going Private" Transactions
The Commission has adopted Rule 13e-3 under the Exchange Act which is
applicable to certain "going private" transactions and which may under certain
circumstances be applicable to the Merger or another business combination
following the purchase of Shares pursuant to the Offer in which Purchaser seeks
to acquire the remaining Shares not held by it. However, Rule 13e-3 would be
inapplicable if (i) the Shares are deregistered under the Exchange Act prior to
the Merger or other business combination or (ii) the Merger or other business
combination is consummated within one year after the purchase of the Shares
pursuant to the Offer and the amount paid per Share in the Merger or other
business combination is at least equal to the amount paid per Share in the
Offer. If applicable, Rule 13e-3 requires, among other things, that certain
financial information concerning the fairness of the proposed transaction and
the consideration offered to minority stockholders in such transaction be filed
with the Commission and disclosed to stockholders prior to the consummation of
the transaction.
12. Source and Amount of Funds.
The total amount of funds required by the Purchaser to consummate the
Offer and the Merger (assuming that outstanding Company options are not
exercised and the Company Debentures are not converted) is expected to be
approximately $328 million, which amount excludes related fees and expenses.
The necessary funds are expected to come from the following sources: (i)
approximately $241 million of cash equity financing from the Acquirors; and
(ii) approximately $87 million under the Credit Facility (as defined below).
Equity Financing. On the Initial Capital Contribution Date under the
Parent LCC Agreement, each of QSP and QIP will contribute $96,250,000 to the
Parent and Greenlake will contribute $48,500,000 and 2,000,000 Shares (the
"Contributed Shares") to the Parent. For a more complete description of these
contributions (collectively, the "Equity Financing"), see Section 9 hereof. QSP
will fund its commitment from working capital provided by Quasar Partners. QIP
will fund its commitment through working capital.
Credit Facility. The Purchaser has received a written financing
commitment, dated August 7, 1997 (the "Commitment Letter"), from AFG to provide
two term loans, each up to the amount of $150 million (the "Credit Facility").
The second loan will be made only after the first loan has been repaid.
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The terms of the definitive agreement (the "Credit Agreement") between the
Company and certain affiliates of AFG (collectively, the "Lenders") providing
for the Credit Facility have not been finalized. The following is a summary of
the anticipated principal terms of the Credit Facility based upon the
Commitment Letter. This summary is subject to finalizing the Credit Agreement
and is qualified in its entirety by reference to the Commitment Letter which is
filed as an exhibit to the Schedule 14D-1 to which this Offer to Purchase is
also an exhibit.
Under the Credit Facility and subject to the terms and conditions thereof,
the Lenders will provide (1) a term loan to the Purchaser in an amount up to
$150 million (the "Phase I Loan") and (2) a term loan to the Company in an
amount up to $150 million (the "Phase II Loan"). The Phase II Loan will be made
only after the consummation of the proposed Merger.
The proceeds of the Phase I Loan must be used by the Purchaser solely
towards the purchase of Shares in the Offer and for any conversion of the
Company Debentures, which repurchase (as described below) may be required as a
result of the consummation of the Offer. The proceeds of the Phase II Loan must
be used by the Company, as the surviving corporation of the Merger, for (i) the
repayment of all amounts outstanding under the Phase I Loan, (ii) the purchase,
pursuant to the Merger, of any Shares not acquired in the Offer, and (iii) any
required repurchase of Company Debentures. All amounts outstanding under the
Phase I Loan must be fully repaid prior to or with the proceeds of the Phase II
Loan.
The term of the Phase I Loan will commence upon the first disbursement of
the Phase I Loan proceeds and terminate upon the earlier of the Merger or nine
months after the first disbursement under the Phase I Loan, at which time all
principal and accrued interest will be due and payable on the Phase I Loan. The
term of the Phase II Loan will commence upon the Merger and terminate nine
months after the first disbursement under the Phase I Loan, at which time all
principal and accrued interest will be due and payable on the Phase II Loan.
The Lenders' obligations to first disburse funds shall remain open for a period
of 90 days following the execution of a satisfactory Credit Agreement.
Interest will accrue on the outstanding principal balances of the Phase I
Loan and the Phase II Loan at a rate of 10% per annum. Interest will be payable
monthly in arrears on the first day of each month during the terms of the
loans. Upon the execution of the Commitment Letter, the Purchaser paid AFG a
non-refundable commitment fee of $1,500,000. Upon each disbursement of loan
proceeds other than proceeds of the Phase II Loan used to repay the Phase I
Loan, the Purchaser shall pay American Financial a funding fee equal to 1% of
the amount of proceeds so disbursed. The maximum funding fee payable to AFG
under the Credit Agreement will be $1,500,000. The Purchaser will also
reimburse certain expenses of the Lenders and provide certain indemnities to
the Lenders, all of which the Purchaser believes to be customary for
commitments of this type.
The Phase I Loan will be secured by (i) a pledge by the Parent to the
Lenders of the Contributed Shares and (ii) a pledge by the Purchaser to the
Lenders of all Shares tendered pursuant to the Offer (such Shares, together
with the Contributed Shares, the "Security"). The aggregate value of the
Security must at all times be equal to or greater than twice the principal
balance of the aggregate amount outstanding under the Phase I Loan and the
Phase II Loan. The Phase II Loan will be secured by a pledge of all of the
capital stock of the surviving corporation in the Merger. In addition, in the
event that the Purchaser makes a loan to the Company to fund the Company's
repurchase of the Company Debentures, the Purchaser will assign its right to
receive repayment of such loan to the Lenders as additional collateral securing
repayment of the Phase I Loan.
The Credit Agreement will contain representations and warranties,
covenants (including financial covenants), indemnities, events of default and
other provisions customary for such financings.
The Phase I Loan is conditioned upon, among other things, (i) immediately
prior to the funding of the Phase I Loan, the Purchaser and Parent, on a
consolidated basis, having a minimum shareholders' equity of $275 million
consisting of (a) $241 million of cash equity (the "Cash Equity") and (b) $34
million allocable to the Contributed Shares, plus additional equity
contributions to the Purchaser (the "Additional Equity"), if necessary,
calculated on the basis of the difference, if any, between the final Offer
Price and $18.00 as set forth in the Commitment Letter; and (ii) the full
amount of the Cash Equity and the Additional Equity being used to finance the
Offer prior to the disbursement of any funds under the Phase I Loan.
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It is anticipated that the indebtedness incurred under the Credit Facility
will be repaid from funds generated internally by the Company and its
subsidiaries and from other sources that may include the proceeds of the
private or public sale of debt or equity securities. No final decisions have
been made concerning the method the Company will employ to repay such
indebtedness. Such decisions, when made, will be based upon Parent's review
from time to time of the advisability of particular actions, as well as upon
prevailing interest rates and financial and other economic conditions.
The proceeds from the Equity Financing and the Credit Facility may be used
to finance the repurchase of the Company Debentures, if necessary. According to
publicly available information regarding the Company, following a "Change in
Control" (as defined in the Company Debentures), which would occur upon the
Purchaser acquiring more than 50% of the outstanding Shares in the Offer, any
holder of the Company Debentures would have the right to require the Company to
purchase for cash all or any part of such holder's Company Debentures at 100%
of the principal thereof. According to the Company's Annual Report on Form 10-K
for its fiscal year ended September 30, 1996, as of September 30, 1996, there
were outstanding Company Debentures in the aggregate principal amount of $74.8
million.
To the extent, if any, that the Equity Financing and the Credit Facility
do not provide sufficient funds to consummate the Offer and the Merger and to
pay any other amounts due as a result of a "Change in Control," including any
amounts due if holders of the Company Debentures require such debentures to be
repurchased, the Purchaser will use the available working capital of the
Company or will arrange for additional financing sources to satisfy such
obligations. The Purchaser has not made any arrangements for such additional
financing and there can be no assurance that such financing will be available
or, if available, on terms favorable to the Purchaser or the Company.
In addition, according to publicly available information regarding the
Purchaser, it is possible that consummation of the Offer may result in a
default under certain instruments pursuant to which approximately $300 million
of the Company's indebtedness (including the $74.8 million represented by the
Company Debentures) was issued. While the Parent will seek to obtain the
requisite consents under such instruments prior to the Expiration Date, in the
event that such consents are not obtained, the Parent will seek to arrange for
additional financing so that upon obtaining control of the Company, the Parent
will be able to cause the Company to refinance or redeem such indebtedness.
There can be no assurance, however, that such financing will be available or,
if available, on terms that are not less favorable to the Company than those
that currently apply.
13. Dividends and Distributions. If, on or after August 8, 1997, the
Company (i) splits, combines or otherwise changes the Shares or its
capitalization, (ii) acquires Shares or otherwise causes a reduction in the
number of Shares, (iii) issues or sells additional Shares, or any shares of any
other class of capital stock, other voting securities or any securities
convertible into or exchangeable for, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing, or (iv) discloses
that it has taken such action, then, without prejudice to the Purchaser's
rights under Section 14, the Purchaser, in its sole discretion, may make such
adjustments in the purchase price and other terms of the Offer and the Merger
as it deems appropriate to reflect such split, combination or other change
including, without limitation, the number or type of securities offered to be
purchased.
If, on or after August 8, 1997, the Company should declare or pay any cash
dividend on the Shares or other distribution on the Shares, or issue with
respect to the Shares any additional Shares, shares of any other class of
capital stock, other than voting securities or any securities convertible into,
or rights, warrants or options, conditional or otherwise, to acquire, any of
the foregoing, payable or distributable to stockholders of record on a date
prior to the transfer of the Shares purchased pursuant to the Offer to the
Purchaser or its nominee or transferee on the Company's stock transfer records,
then, subject to the provisions of Section 14, (a) the Offer Price may, in the
sole discretion of the Purchaser, be reduced by the amount of any such cash
dividends or cash distributions and (b) the whole of any such noncash dividend,
distribution or issuance to be received by the tendering stockholders will (i)
be received and held by the tendering stockholders for the account of the
Purchaser and will be required to be promptly remitted and transferred by each
tendering stockholder to the Depositary for the account of the Purchaser,
accompanied by appropriate documentation of transfer, or (ii) at the direction
of the Purchaser, be exercised for the benefit of the Purchaser, in which case
the proceeds of such exercise will
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promptly be remitted to the Purchaser. Pending such remittance and subject to
applicable law, the Purchaser will be entitled to all rights and privileges as
owner of any such noncash dividend, distribution, issuance or proceeds and may
withhold the entire Offer Price or deduct from the Offer Price the amount or
value thereof, as determined by the Purchaser in its sole discretion.
14. Certain Conditions of the Offer. Notwithstanding any other term of the
Offer, the Purchaser shall not be required to accept for payment or pay for,
subject to any applicable rules and regulations of the Commission, any Shares
not theretofore accepted for payment or paid for and may terminate or amend the
Offer as to such Shares unless (1) the Minimum Condition, the Rights Condition,
the Funding Condition, the Supermajority Condition, the OMC Indebtedness
Condition and the DDC Termination Condition are satisfied, and (2) approvals
required by law to be obtained prior to the consummation of the Offer under any
antitrust or competition laws to the purchase of Shares pursuant to the Offer
shall have been obtained. Furthermore, notwithstanding any other term of the
Offer, the Purchaser shall not be required to accept for payment or to pay for
any Shares not theretofore accepted for payment or paid for, and may terminate
or amend the Offer if at any time prior to the expiration of the Offer, any of
the following conditions exist or shall occur and remain in effect:
(i) (a) A court of competent jurisdiction or other governmental entity
shall have issued an order, judgment, decree or ruling on the merits in
connection with an action, suit or proceeding brought by any governmental
entity or person which (1) restrains or prohibits the acquisition by the
Purchaser or the Parent of Shares pursuant to the Offer, or the making or
consummation of the Offer or the Merger, (2) makes the purchase of or payment
for some or all of the Shares pursuant to the Offer or the Merger illegal, (3)
imposes material limitations on the ability of the Parent (or any of its
affiliates) to acquire or hold, or to require the Parent or any of its
affiliates or subsidiaries to dispose of or hold separate, any material portion
of the assets or the business of the Parent and its affiliates taken as a whole
or the Company and its subsidiaries taken as a whole, or (4) imposes material
limitations on the ability of the Purchaser or the Parent (or its affiliates)
to exercise full rights of ownership of the Shares purchased by it, including,
without limitation, the right to vote the Shares purchased by it on all matters
properly presented to the stockholders of the Company, or (b) there shall have
been instituted and pending any action or proceeding by any governmental entity
which, in the opinion of the Parent's counsel (assuming, for purposes of such
opinion only, the validity of the allegations) has a reasonable likelihood of
success on the merits, and which (1) seeks to challenge the acquisition by the
Purchaser or the Parent of the Shares pursuant to the Offer, restrain, prohibit
or delay the making or consummation of the Offer or the Merger, or obtain any
material damages in connection therewith, (2) seeks to make the purchase of or
payment for some or all of Shares pursuant to the Offer or the Merger illegal,
(3) seeks to impose material limitations on the ability of the Parent (or any
of its affiliates) effectively to acquire or hold, or to require Parent or the
Company or any of their respective affiliates or subsidiaries to dispose of or
hold separate, any material portion of the assets or the business of Parent and
its affiliates taken as a whole or the Company and its subsidiaries taken as a
whole, or (4) seeks to impose material limitations on the ability of Parent (or
its affiliates) to exercise full rights of ownership of the Shares purchased by
it, including, without limitation, the right to vote the Shares purchased by it
on all matters properly presented to the stockholders of the Company; or
(ii) There shall have occurred (a) 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, (b) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (c) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the United
States, or (d) any limitation (whether or not mandatory) by any governmental or
regulatory authority on, or any other event which has a material adverse effect
on the extension of credit by banks or other lending institutions in the United
States; or
(iii) There shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer or the Merger, by any governmental entity, any
law or there shall have been issued any injunction resulting in any of the
consequences referred to in subsection (i) above.
The foregoing conditions (i) through (iii) are for the sole benefit of
Parent and the Purchaser and may be asserted by Parent regardless of the
circumstances giving rise to any such condition and may be waived by Parent, in
whole or in part, at any time and from time to time, in the sole discretion of
Parent. The failure by the
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Purchaser and the Parent at any time to exercise any of the foregoing rights
will not be deemed a waiver of any right, the waiver of such right with respect
to any particular facts or circumstances shall not be deemed a waiver with
respect to any other facts or circumstances, and each right will be deemed an
ongoing right which may be asserted at any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be
returned by the depositary to the tendering stockholders.
15. Certain Regulatory and Legal Matters. Except as set forth in this
Offer to Purchase, including, but not limited to Section 11 and this Section
15, based on its review of publicly available filings by the Company with the
Commission and other publicly available information regarding the Company, the
Purchaser is not aware of any licenses or regulatory permits that would be
material to the business of the Company and its subsidiaries, taken as a whole,
and 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 any filings, approvals or other actions by or with any
domestic, 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
Purchaser pursuant to the Offer as contemplated herein. Should any such
approval or other action be required, there can be no assurance that any such
additional approval or action, if needed, would be obtained without substantial
conditions or that adverse consequences might not result to the Company's
business, or that certain parts of the Company's or the Purchaser's business
might not have to be disposed of or held separate or other substantial
conditions complied with in order to obtain such approval or action or in the
event that such approvals were not obtained or such actions were not taken.
Purchaser's obligation to purchase and pay for Shares is subject to certain
conditions, including conditions with respect to governmental actions. See the
Introduction and Section 14 for a description of certain conditions to the
Offer, including with respect to litigation and governmental actions.
Antitrust. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated until certain information and
documentary material has been furnished for review by the Antitrust Division of
the Department of Justice (the "Antitrust Division") and the FTC and certain
waiting period requirements have been satisfied.
The Antitrust Division and the FTC frequently scrutinize the legality
under the antitrust laws of transactions such as the acquisition of Shares by
the Purchaser pursuant to the Offer and the Merger. At any time before or after
the Purchaser's purchase of Shares, the Antitrust Division or the FTC could
take such action under the antitrust laws as either deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer, the divestiture of Shares purchased pursuant to
the Offer or the divestiture of substantial assets of the Acquirors. Private
parties as well as state attorneys general may also bring legal actions under
the antitrust laws under certain circumstances. The Acquirors believe that the
Purchaser's acquisition of Shares would not violate the antitrust laws. There
can be no assurance, however, that a challenge to the Offer on antitrust
grounds will not be made or that, if such a challenge is made, the Purchaser
will prevail. See Section 14.
If the HSR Act were deemed applicable to the acquisition of Shares
pursuant to the Offer, the consummation of the Offer could be delayed until
compliance therewith. Based upon an examination of publicly available
information relating to the businesses in which the Company is engaged, the
Purchaser believes that the acquisition of Shares pursuant to the Offer and the
Merger would not violate the antitrust laws. The Purchaser believes that
retention of all of the operations of the Company and the Purchaser should be
permitted under the antitrust laws. Nevertheless, there can be no assurance
that a challenge to the Offer on antitrust grounds will not be made, or, if
such challenge is made, what the result will be. See Section 14.
Federal Reserve Board Regulations. Regulations G, U and X (the "Margin
Regulations") of the Federal Reserve Board 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 by margin
stock. Such secured credit may not be extended or maintained in an amount that
exceeds the maximum loan value of all the direct and indirect collateral
securing the credit, including margin stock and other collateral.
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State Takeover Laws. A number of states (including Delaware, where the
Company is incorporated) have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However in 1987, in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State
of Indiana may, as a matter of corporate law and, in particular, with respect
to those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of
a target corporation without the prior approval of the remaining presenting
stockholders. The state law before the Supreme Court was by its terms
applicable only to corporations that had a substantial number of stockholders
in the state and were incorporated there. Subsequently, in TLX Acquisition
Corp., v Telex Corp., a Federal district court in Oklahoma ruled that the
Oklahoma statutes were unconstitutional insofar as they apply 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 Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. The Purchaser does not know whether any of these laws will, by
their terms, apply to the Offer or the Merger and has not complied with any
such laws. Should any person seek to apply any state takeover law, the
Purchaser will take such action as then appears desirable, which may include
challenging the validity or applicability of any such statute in appropriate
court proceedings. In the event it is asserted that one or more state takeover
laws is applicable to the Offer or the Merger, and an appropriate court does
not determine that it is inapplicable or invalid as applied to the Offer, the
Purchaser might be required to file certain information with, or receive
approvals from, the relevant state authorities. In addition, if enjoined, the
Purchaser might be unable to accept for payment any Shares tendered pursuant to
the Offer, or be delayed in continuing or consummating the Offer and the
Merger. In such case, the Purchaser may not be obligated to accept for payment
any Shares tendered. See Section 14.
Foreign Laws. The Company and certain of its subsidiaries conduct business
in several foreign countries where regulatory filings or approvals may be
required or desirable in connection with the consummation of the Offer. Certain
of such filings or approvals, if required or desirable, may not be made or
obtained prior to the expiration of the Offer. The Purchaser is seeking further
information regarding the applicability of any such laws and currently intends
to take such action as may be required or desirable. If any approvals required
by law to be obtained prior to consummation of the Offer under any foreign
antitrust or competition law to the purchase of Shares pursuant to the Offer
shall not have been obtained prior to the Expiration Date, the Purchaser will
not be obligated to proceed with the Offer or the purchase of any Shares not
theretofore purchased pursuant to the Offer. In addition, if any foreign
governmental entity takes any action prior to the completion of the Offer that
might have certain adverse effects, the Purchaser will not be obligated to
accept for payment or pay for any Shares tendered pursuant to the Offer. See
Section 14.
16. Certain Fees and Expenses. The Purchaser has retained Georgeson &
Company Inc. as Information Agent 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 material relating to the Offer to beneficial owners.
The Information Agent will receive reasonable and customary compensation for
all such services in addition to reimbursement of reasonable out-of-pocket
expenses. The Purchaser has agreed to indemnify the Information Agent against
certain liabilities and expenses, including liabilities under the federal
securities laws.
34
<PAGE>
In addition, Marine Midland Bank has been retained as the Depositary. The
Depositary has not been retained to make solicitations or recommendations in
its role as Depositary. The Depositary will receive reasonable and customary
compensation for its services in connection with the Offer, will be reimbursed
for its reasonable out-of-pocket expenses and will be indemnified against
certain liabilities and expenses in connection therewith.
Except as set forth above, the Purchaser will not pay any fees or
commissions to any broker, dealer or other person (other than the Information
Agent) for soliciting tenders of Shares and Rights pursuant to the Offer.
Brokers, dealers, commercial banks and trust companies and other nominees will,
upon request, be reimbursed by the Purchaser for customary clerical and mailing
expenses incurred by them in forwarding materials to their customers.
17. Miscellaneous. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares or Rights residing in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the securities, blue sky or other laws of such
jurisdiction. Neither the Purchaser nor the Parent is aware of any jurisdiction
in which the making of the Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction. To the extent the Purchaser or
the Parent becomes aware of any state law that would limit the class of
offerees in the Offer, the Purchaser may, in its discretion, take such action
as it may deem necessary to make the Offer in any jurisdiction and extend the
Offer to holders of Shares in such jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer will be deemed
to be made on behalf of the Purchaser by one or more registered brokers or
dealers that are licensed under the laws of such jurisdiction.
The Acquirors have filed with the Commission the Purchaser Schedule 14D-1,
together with exhibits, pursuant to Rule 14d-3 under the Exchange Act,
furnishing certain additional information with respect to the Offer, and may
file amendments thereto. Such Purchaser Schedule 14D-1 and any amendments
thereto, including exhibits, may be examined and copies may be obtained from
the office of the Commission in the same manner as described in Section 8 with
respect to information concerning the Company, except that they will not be
available at the regional offices of the Commission.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser not contained in this Offer to
Purchase or in the Letter of Transmittal and, if given or made, any such
information or representation must not be relied upon as having been
authorized. Neither the delivery of the Offer to Purchase nor any purchase
pursuant to the Offer shall, under any circumstances, create any implication
that there has been no change in the affairs of the Purchaser or the Company
since the date as of which information is furnished or the date of this Offer
to Purchase.
GREENMARINE ACQUISITION CORP.
August 8, 1997
35
<PAGE>
Schedule I
DIRECTORS, EXECUTIVE OFFICERS OR CONTROLLING PERSONS OF THE ACQUIRORS.
1. The Purchaser. Set forth below are the name, business address and
present principal occupation or employment, and material occupations,
positions, offices or employments for the past five years of each director and
executive officer of the Purchaser. Except as otherwise noted, the business
address of each such person is 277 Park Avenue, 27th Floor, New York, NY 10172
and such person is a United States citizen.
<TABLE>
<CAPTION>
Present Principal Occupation or Employment;
Material Occupations, Positions, Offices or
Name Employments for the Past Five Years
- -------------------- ---------------------------------------------------------------
<S> <C>
Alfred D. Kingsley Mr. Kingsley is the Chief Executive Officer and President
of the Purchaser. Mr. Kingsley is also a principal of Green-
way Partners, L.P. ("Greenway"), the principal business of
which is investing in securities. Mr. Kingsley joined Carl
Icahn at Icahn & Co. Inc. in 1968. Mr. Kingsley served as
senior adviser to Mr. Icahn until October 1992. Mr. Kings-
ley was a director of Trans World Airlines Inc. from Sep-
tember 1985, and served as Vice Chairman of the Board
from February 1989, until January 1993. Mr. Kingsley con-
tinues to serve as Director of ACF Industries, Incorporated,
a rail car leasing and manufacturing firm, and as a director
of the general partner of American Real Estate Partners,
L.P., a real estate investment partnership.
Gary K. Duberstein Mr. Duberstein is the Vice President, Secretary and Trea-
surer of the Purchaser. Mr. Duberstein is also a principal of
Greenway. Mr. Duberstein served as general counsel to
Carl Icahn and vice president of various of his entities from
1985 until March 1993. From 1979 to 1985, Mr. Duber-
stein was associated with the New York City law firm of
Weil, Gotshal & Manges LLP.
Richard Katz See Part 10 below.
</TABLE>
2. The Parent. Set forth below are the name, business address and present
principal occupation or employment, and material occupations, positions,
offices or employments for the past five years of each member of the management
committee of the Parent. Each such person is a citizen of the United States.
<TABLE>
<CAPTION>
Present Principal Occupation or Employment;
Material Occupations, Positions, Offices or
Name Employments for the Past Five Years
- -------------------- --------------------------------------------
<S> <C>
Alfred D. Kingsley See Part 1 above.
Gary K. Duberstein See Part 1 above.
Richard Katz See Part 10 below.
</TABLE>
3. Greenlake. Set forth below are the name, business address and present
principal occupation or employment, and material occupations, positions,
offices or employments for the past five years of each member of the management
committee of the Greenlake. Each such person is a citizen of the United States.
<TABLE>
<CAPTION>
Present Principal Occupation or Employment;
Material Occupations, Positions, Offices or
Name Employments for the Past Five Years
- -------------------- --------------------------------------------
<S> <C>
Alfred D. Kingsley See Part 1 above.
Gary K. Duberstein See Part 1 above.
</TABLE>
36
<PAGE>
4. QIH. Set forth below are the name, business address and present
principal occupation or employment of the directors and executive officers of
QIH.
<TABLE>
<CAPTION>
Name/Title/Citizenship Principal Occupation Business Address
- ------------------------- ---------------------- ---------------------
<S> <C> <C>
Curacao Corporation Managing Director of Kaya Flamboyan 9
Company N.V. Netherlands Antilles Willemstad
Managing Director corporations Curacao,
(Netherlands Antilles) Netherlands Antilles
</TABLE>
5. QIP. Set forth below are the name, business address and present
principal occupation or employment of the directors and executive officers of
QIP.
<TABLE>
<CAPTION>
Name/Title/Citizenship Principal Occupation Business Address
- ---------------------------------- ------------------------- -----------------------
<S> <C> <C>
Curacao Corporation Managing Director of Kaya Flamboyan 9
Company N.V. Netherlands Antilles Willemstad
Managing Director corporations Curacao,
(Netherlands Antilles) Netherlands Antilles
Inter Caribbean Services Limited Administrative services Citco Building
Secretary Wickhams Cay
(British Virgin Islands) Road Town
Tortola
British Virgin Islands
</TABLE>
6. QIH Management. Set forth below are the name, business address and
present principal occupation or employment, and material occupations,
positions, offices or employments for the past five years of the directors and
executive officers of QIH Management. The business address of each such person
is 888 Seventh Avenue, 33rd Floor, New York, New York 10106 and such person is
a United States citizen.
<TABLE>
<CAPTION>
Present Principal Occupation or Employment;
Material Occupations, Positions, Offices or
Name Employments for the Past Five Years
- ----------------- ---------------------------------------------------------
<S> <C>
Gary Gladstein See Part 7 below
Sean C. Warren See Part 7 below
Peter Streinger Mr. Streinger is the Chief Financial Officer of SFM
LLC. He has held this position since 1990
Michael C. Neus Mr. Neus is the Assistant General of SFM LLC. He has
held this position since April of 1994. From 1990 until
joining SFM LLC in 1994, Mr. Neus was associated
with the law firm of Coudert Brothers.
</TABLE>
37
<PAGE>
7. SFM LLC. Set forth below is the name, present principal occupation or
employment, and material occupations, positions, offices, or employments during
the last five years of each of the managing directors of SFM LLC. Unless
otherwise noted, such persons have held their positions as managing directors
of SFM LLC for the last five years. As used herein SFM LLC means Soros Fund
Management LLC from and after January 1, 1997, and Soros Fund Management, a
sole proprietorship, prior to January 1, 1997. The business address of each
person listed below is c/o Soros Fund Management LLC, 888 Seventh Avenue, 33rd
Floor, New York, New York 10106. Each of the managing directors is a United
States citizen.
<TABLE>
<CAPTION>
Present Principal Occupation or
Employment; Material Occupations,
Positions, Offices or Employments
Name for the Past Five Years
- -------------------------- ------------------------------------------------------------------------
<S> <C>
Scott K.H. Bessent Mr. Bessent has been associated with SFM LLC since 1991. His primary
responsibility is the research and selection of European securities.
Walter Burlock Mr. Burlock has been associated with SFM LLC since 1990. His primary
responsibility is the research and selection of United States
securities.
Brian J. Corvese Mr. Corvese has been associated with SFM LLC since 1997. His primary
responsibility is the research and selection of United States
securities. From
1987 until joining SFM LLC in 1997, he was a partner and portfolio
manager at Chancellor LGI Asset Management.
Stanley F. Druckenmiller Mr. Druckenmiller has been associated with SFM LLC since 1988 and is
SFM LLC's lead portfolio manager. His primary responsibilities include
"macro" trading strategies aimed at taking advantage of broad market
opportunities, both for hedging and speculative purposes. In addition,
Mr.
Druckenmiller is an owner and managing member of Duquesne Capital
Management, L.L.C., an investment advisory firm in Pittsburgh,
Pennsylvania which advises several U.S. and non-U.S. investment funds.
Jeffrey L. Feinberg Mr. Feinberg has been associated with SFM LLC since 1996. His primary
responsibility is the research and selection of United States equity
securities. From March of 1992 through December of 1995, Mr. Feinberg
was a portfolio assistant at Fidelity Investments.
Arminio Fraga Mr. Fraga has been associated with SFM LLC since 1993. His primary
responsibility is investment strategies for emerging markets. From June
of
1991 through November of 1992, Mr. Fraga was a Director for the Central
Bank of Brazil.
Gary S. Gladstein Mr. Gladstein has been associated with SFM LLC since 1985. His primary
responsibilities include the administrative and financial operations of
SFM
LLC, including relationships with banks and brokerage firms.
Ron Hiram Mr. Hiram has been associated with SFM LLC since 1995. His primary
responsibility is private equity investments with a specific focus on
QIH.
Since 1992, he served as a Managing Director at Lehman Brothers and was
responsible for managing a diversified portfolio of direct investments.
Robert K. Jermain Mr. Jermain has been associated with SFM LLC since 1995. His primary
responsibility is the research and selection of United States equities.
From
1987 through 1994, Mr. Jermain was the President of Osprey Funds
Management Inc., a manager of hedged portfolios for a variety of funds.
</TABLE>
38
<PAGE>
<TABLE>
<S> <C>
David N. Kowitz Mr. Kowitz has been associated with SFM LLC since 1995. His primary
responsibility is investment research and portfolio management in Asian
emerging markets. From February of 1994 until joining SFM LLC, he was
a portfolio manager at Kingdon Capital Management. From December of
1992 until joining Kingdon Capital Management, he was a securities
analyst for Goldman, Sachs & Co. in Hong Kong. From March of 1989
until joining Goldman Sachs & Co., Mr. Kowitz was a securities analyst at
Jardine Fleming Broking Limited in Hong Kong and Pesaka Jardine
Fleming Sdn. Bhd. in Malaysia. Mr. Kowitz is a Chartered Financial
Analyst.
Alexander C. McAree Mr. McAree has been associated with SFM LLC since March of 1992. His
primary responsibility is the research and selection of United States and
Eastern European securities.
Paul McNulty Mr. McNulty has been associated with SFM LLC since 1993. His primary
responsibility is the research and selection of United States securities.
From
1989 until joining SFM LLC, Mr. McNulty was a venture capitalist and
securities analyst with MVP Ventures.
Gabriel S. Nechamkin Mr. Nechamkin has been associated with SFM LLC since 1988. His
primary responsibility is trading operations in the risk arbitrage,
bankruptcy/reorganization and high yield markets.
Steven Okin Mr. Okin has most recently been associated with SFM LLC since 1988. Mr.
Okin's primary responsibility is trading operations in government bonds,
currencies, commodities, indices and derivative products.
Dale Precoda Mr. Precoda has been associated with SFM LLC since 1989. His primary
responsibility is portfolio management of securities of both United
States
and non-United States issuers.
Lief D. Rosenblatt Mr. Rosenblatt has been associated with SFM LLC since 1988. His primary
responsibility is portfolio management in securities in the risk
arbitrage,
bankruptcy/reorganization and high yield markets.
Mark D. Sonnino Mr. Sonnino has been associated with SFM LLC since 1988. His primary
responsibility is investment research in the risk arbitrage,
bankruptcy/reorganization and high yield markets.
Filiberto H. Verticelli Mr. Verticelli has been associated with SFM LLC since 1996. His primary
responsibility is equity trading operations with an emphasis on United
States securities. From June of 1991 until joining SFM LLC, Mr.
Verticelli
was the head equity trader at Duquesne Capital Management, L.L.C.
Sean C. Warren Mr. Warren has been associated with SFM LLC since 1991, serving as its
General Counsel. His primary responsibilities include all legal and
compliance matters at SFM LLC.
</TABLE>
39
<PAGE>
8. Quasar. Set forth below are the name, business address and present
principal occupation or employment of the directors and executive officers of
Quasar.
<TABLE>
<CAPTION>
Name/Title/Citizenship Principal Occupation Business Address
- ------------------------- ------------------------ ---------------------
<S> <C> <C>
Curacao Corporation Managing Director of Kaya Flamboyan 9
Company N.V. Netherlands Antilles Willemstad
Managing Director corporations Curacao,
(Netherlands Antilles) Netherlands Antilles
</TABLE>
9. Quasar Partners. Set forth below are the name, business address and
present principal occupation or employment of the directors and executive
officers of Quasar Partners.
<TABLE>
<CAPTION>
Name/Title/Citizenship Principal Occupation Business Address
- ----------------------------- --------------------------- ---------------------
<S> <C> <C>
Quasar Fund Management C.V. Managing General Partner Kaya Flamboyan 9
Managing General Partner of Quasar International Willemstad
(Netherlands Antilles) Partners C.V. Curacao,
Netherlands Antilles
Club Moss Company N.V. Executive General Partner Kaya Flamboyan 9
Executive General Partner of Quasar International Willemstad
(Netherlands Antilles) Partners C.V. Curacao,
Netherlands Antilles
</TABLE>
10. QSP. Set forth below (as applicable) are the name, business address
and present principal occupation or employment, and material occupations,
positions, offices or employments for the past five years of the directors and
executive officers of QSP.
<TABLE>
<CAPTION>
Name/Title/Citizenship Principal Occupation Business Address
- ---------------------------------- ------------------------- ------------------------
<S> <C> <C>
Curacao Corporation Managing Director of Kaya Flamboyan 9
Company N.V. Netherlands Antilles Willemstad
Managing Director corporations Curacao,
(Netherlands Antilles) Netherlands Antilles
Richard Katz President of Quasar Villa La Sirena
President Strategic Partners LDC* Vico dell'Olivetta 12
(United Kingdom) 18039 Mortola Inferiore
Ventimiglia
Italy
Inter Caribbean Services Limited Administrative services Citco Building
Secretary Wickhams Cay
(British Virgin Islands) Road Town
Tortola
British Virgin Islands
</TABLE>
- ------------
* From 1977 through March of 1993, Mr. Katz was a Director of N.M. Rothschild &
Sons Limited, London England. Mr. Katz was also a Managing Director of
Rothschild Italia S.p.A., Milan, Italy from 1989 until December of 1992.
Since 1986 Mr. Katz has served as a Supervisory Director for a number of
Quantum entities.
40
<PAGE>
Schedule II
TRANSACTIONS IN SHARES
WITHIN 60 DAYS PRIOR TO THE OFFER
1) On August 6, 1997, Greenbelt Corp. sold, in a private transaction, 410,000
Shares at a price of $1,760,000 to Greensea Offshore, L.P.
2) On August 7, 1997, in connection with the formation of Greenlake, each of
the following entities transferred the number of shares listed below to
Greenlake in exchange for membership interests, pursuant to a private
transaction:
Shares transferred
Entity to Greenlake
- --------------------------------------------------------- -------------------
Greenway Partners, L.P. 702,100
Greensea Offshore, L.P. 410,000
Greentree Partners, L.P. 200,000
Greenbelt Corp.
(on behalf of certain accounts managed by it) 687,000
41
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and Rights 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 at one of its addresses set forth
below:
The Depositary for the Offer is:
MARINE MIDLAND BANK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand or Overnight Delivery:
140 Broadway, Level A (212) 658-2292 140 Broadway, Level A
New York, NY 10005-1180 New York, NY 10005-1180
Attn: Corporate Trust Operations Attn: Corporation Trust Operations Attn: Corporate Trust Operations
Confirm Facsimile
by Telephone:
(212) 658-5931
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number listed below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and other tender offer
materials may be obtained from the Information Agent as set forth below, and
will be furnished promptly at the Purchaser's expense. You may also contact
your broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON
& COMPANY INC.
--------------
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (collect)
Banks and Brokers call collect (212) 440-9800
or
Call Toll-Free (800) 322-2885
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
of
OUTBOARD MARINE CORPORATION
Pursuant to the Offer to Purchase
Dated August 8, 1997
by
GREENMARINE ACQUISITION CORP.
a wholly-owned subsidiary of
GREENMARINE HOLDINGS LLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON MONDAY, SEPTEMBER 8,
1997, UNLESS THE OFFER IS EXTENDED
(AS EXTENDED, THE "EXPIRATION DATE").
TO: MARINE MIDLAND BANK, AS DEPOSITARY
By Mail: By Overnight Courier: By Hand Delivery:
140 Broadway, Level A 140 Broadway, Level A 140 Broadway, Level A
New York, NY 10005-1180 New York, NY 10005-1180 New York, NY 10005-1180
Attn: Corporate Trust Attn: Corporate Trust Attn: Corporate Trust
Operations Operations Operations
By Facsimile Transmission:
(212) 658-2292
To Confirm:
(212) 658-5931
-----------------
<PAGE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE
APPROPRIATE SPACE PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 INCLUDED
HEREIN.
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 of Outboard
Marine Corporation either if (1) certificates evidencing Shares and/or Rights
(as such terms are defined below) are to be forwarded herewith or (2) unless an
Agent's Message (as defined in the Offer to Purchase (as defined below)) is
utilized, delivery of Shares and/or Rights is to be made by book-entry transfer
to the Depositary's account at The Depository Trust Company, Midwest Securities
Trust Company or Philadelphia Depository Trust Company (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth in Section 3 of the Offer to Purchase.
Stockholders whose Share Certificates (as defined below) and, if
applicable, Rights Certificates (as defined below), are not immediately
available (including, if the Distribution Date (as defined in the Offer to
Purchase) has occurred and Rights Certificates have not yet been distributed),
or who cannot deliver their Shares and Rights and all other documents required
hereby to the Depositary on or prior to the Expiration Date or who cannot
comply with the book-entry transfer procedures on a timely basis, may
nevertheless tender their Shares and Rights pursuant to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2.
<PAGE>
- --------------------------------------------------------------------------------
DESCRIPTION OF SECURITIES TENDERED
- --------------------------------------------------------------------------------
SHARE CERTIFICATE(S) TENDERED
(ATTACH ADDITIONAL LIST IF NECESSARY)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NAME(S) AND ADDRESS(ES) OF
REGISTERED OWNER(S)
(PLEASE FILL IN, IF BLANK, TOTAL NUMBER OF NUMBER OF
EXACTLY AS NAME(S) CERTIFICATE SHARES REPRESENTED SHARES
APPEAR(S) ON CERTIFICATE(S)) NUMBER(S)(1) BY CERTIFICATES(S)(1) TENDERED (2)
Total Shares
</TABLE>
- --------------------------------------------------------------------------------
(1) Need not be completed by stockholders tendering by book-entry transfer.
(2) Unless otherwise indicated, it will be assumed that all Shares represented
by any Share Certificates delivered to the Depositary are being tendered.
See Instruction 4.
-----------------------------------------------------------------------------
RIGHTS CERTIFICATE(S) TENDERED(1)
(ATTACH ADDITIONAL LIST IF NECESSARY)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
NAME(S) AND ADDRESS(ES) OF TOTAL NUMBER OF NUMBER OF
REGISTERED OWNER(S) CERTIFICATE SHARES REPRESENTED SHARES
(PLEASE FILL IN, IF BLANK) NUMBER(S)(2)(3) BY CERTIFICATES(S)(3) TENDERED(2)
Total Rights
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
(1) Need not be completed by stockholders if the Distribution Date has not
occurred.
(2) If the tendered Rights are represented by separate Rights Certificates,
complete using the certificate numbers of such Rights Certificates. If the
tendered Rights are not represented by separate Rights Certificates, or if
such Rights Certificates have not been distributed, complete using the
certificate numbers of the Shares with respect to which the Rights were
issued. Stockholders tendering Rights that are not represented by separate
Rights Certificates should retain a copy of this description in order to
accurately complete the Notice of Guaranteed Delivery if the Distribution
Date occurs.
(3) Need not be completed by stockholders tendering by book-entry transfer.
(4) Unless otherwise indicated, it will be assumed that all Rights represented
by any Rights Certificates delivered to the Depositary are being tendered.
See Instruction 4.
----------------------------------------------------------------------------
The names and addresses of the registered holders should be printed, if
not already printed above, exactly as they appear on the certificates
representing Shares and/or Rights tendered hereby. The certificates and number
of Shares and/or Rights that the undersigned wishes to tender should be
indicated in the appropriate boxes.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
------------------------------------------------
Account No. at
---------------------------------------------------------
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Transaction Code Number:
-------------------------------------------------------
/ / CHECK HERE IF TENDERED RIGHTS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution:
------------------------------------------------
Account No. at
---------------------------------------------------------
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Transaction Code
Number: ---------------------------------------------------------------
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Stockholder(s):
-------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
---------------------------
Name of Institution which Guaranteed Delivery:
--------------------------------
If delivered by book-entry transfer, check box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Name of Tendering Institution:
-------------------------------------------------
Account No.
-------------------------------------------------------------------
Transaction Code Number:
------------------------------------------------------
<PAGE>
/ / CHECK HERE IF TENDERED RIGHTS ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Stockholder(s):
------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
---------------------------
Name of Institution which Guaranteed Delivery:
--------------------------------
If delivered by book-entry transfer, check box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account No.
-------------------------------------------------------------------
Transaction Code Number:
------------------------------------------------------
Holders of Shares will be required to tender one Right for each Share
tendered to effect a valid tender of such Share. Until the Distribution Date
occurs, the Rights are represented by and transferred with the Shares.
Accordingly, if the Distribution Date does not occur prior to the Expiration
Date, a tender of Shares will constitute a tender of the associated Rights. If
the Distribution Date has occurred and separate certificates for rights
("Rights Certificates") have been distributed to holders of Shares prior to the
date of tender pursuant to the Offer (as defined below), Rights Certificates
representing a number of Rights equal to the number of Shares being tendered
must be delivered to the Depositary in order for such Shares to be validly
tendered. If the Distribution Date has occurred and Rights Certificates have
not been distributed prior to the time Shares are tendered pursuant to the
Offer, a tender of Shares without the associated Rights constitutes an
agreement by the tendering stockholder to deliver Rights Certificates
representing a number of Rights equal to the number of Shares tendered pursuant
to the Offer to the Depositary within five business days after the date Rights
Certificates are distributed. The Offeror reserves the right to require that
the Depositary receive such Rights Certificates, or a Book-Entry Confirmation
(as defined in the Offer to Purchase), if available, with respect to such
Rights, prior to accepting the associated Shares for payment pursuant to the
Offer, if the Distribution Date occurs prior to the Expiration Date. Payment
for Shares tendered and purchased pursuant to the Offer will be made only after
timely receipt by the Depositary of, among other things, Rights Certificates,
if such certificates have been distributed to holders of Shares. The Offeror
will not pay any additional consideration for the Rights tendered pursuant to
the Offer.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Greenmarine Acquisition Corp., a
Delaware corporation (the "Offeror") and wholly-owned subsidiary of Greenmarine
Holdings LLC, a Delaware limited liability company (the "Parent"), the
above-described shares of common stock, $0.15 par value per share (the
"Shares"), of Outboard Marine Corporation, a Delaware corporation (the
"Company"), pursuant to the Offeror's offer to purchase all outstanding Shares
at a purchase price of $18.00 per Share, net to the seller in cash, without
interest thereon, together with an equal number of the associated preferred
stock purchase rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of April 24, 1996, as amended (the "Rights Agreement"), between the
Company and First Chicago Trust Company of New York, as Rights Agent, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
August 8, 1997 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and this Letter of Transmittal (which, together with the Offer to
Purchase and any amendments or supplements to such documents, constitutes the
"Offer"). Unless the context requires otherwise, all references to Shares
herein shall include the associated Rights, and all references to Rights shall
include all benefits that may inure to the holders of the Rights pursuant to
the Rights Agreement.
The members of the Parent are Quasar Strategic Partners LDC, a Cayman
Islands limited duration company, Quantum Industrial Partners LDC, a Cayman
Islands limited duration company, and Greenlake Holdings LLC, a Delaware
limited liability company.
Subject to and effective upon acceptance for payment of, and payment for,
the Shares and Rights tendered herewith, the undersigned hereby sells, assigns
and transfers to, or upon the order of, the Offeror all right, title and
interest in and to all the Shares and Rights that are being tendered hereby
(and any and all other Shares, Rights, securities or rights issued or issuable
in respect thereof) and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares and Rights (and
all such other Shares, Rights, securities or rights issued or issuable in
respect thereof), with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (1) deliver
certificates for such Shares and Rights (and all such other Shares, Rights,
securities or rights issued or issuable in respect thereof), or transfer
ownership of such Shares and Rights (and all such other Shares, Rights,
securities or rights issued or issuable in respect thereof) on the account
books maintained by any of the Book-Entry Transfer Facilities, together, in any
such case, with all accompanying evidences of transfer and authenticity, to, or
upon the order of, the Offeror, (2) present such Shares and Rights (and all
such other Shares, Rights, securities or rights issued or issuable in respect
thereof) for transfer on the books of the Company and (3) receive all benefits
and otherwise exercise all rights of beneficial ownership of such Shares and
Rights (and all such other Shares, Rights, securities or rights issued or
issuable in respect thereof), all in accordance with the terms of the Offer.
THE UNDERSIGNED UNDERSTANDS THAT, UNLESS THE RIGHTS ARE REDEEMED BY THE
BOARD OF DIRECTORS OF THE COMPANY OR THE OFFEROR IS SATISFIED, IN ITS SOLE
DISCRETION, THAT THE RIGHTS HAVE BEEN INVALIDATED OR ARE OTHERWISE INAPPLICABLE
TO THE OFFER AND THE PROPOSED SECOND-STEP MERGER (COLLECTIVELY, THE "RIGHTS
CONDITION"), STOCKHOLDERS WILL BE REQUIRED TO TENDER ONE RIGHT FOR EACH SHARE
TENDERED IN ORDER TO EFFECT A VALID TENDER OF SUCH SHARE. The undersigned
understands that if the Distribution Date has occurred and Rights Certificates
have been distributed to holders of Shares prior to the date of tender pursuant
to the Offer, Rights Certificates representing a number of Rights equal to the
number of Shares being tendered herewith must be delivered to the Depositary
or, if available, a Book-Entry Confirmation must be received by the Depositary
with respect thereto. The undersigned also understands that if the Distribution
Date has occurred and Rights Certificates have not been distributed prior to
the date of tender pursuant to the Offer, Rights may be tendered prior to a
stockholder receiving Rights Certificates by use of the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2.
In any case, the undersigned hereby agrees to deliver Rights Certificates
representing a number of Rights equal to the number of Shares tendered herewith
to the Depositary within five business days after the date such Rights
Certificates are distributed. The Offeror reserves the right to require that
the Depositary receive such Rights Certificates, or a Book-Entry Confirmation,
if available, with respect to such Rights, prior to accepting Shares for
payment. Payment for Shares tendered and accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of, among other
things, Rights Certificates if such certificates have been distributed to
holders of Shares. The Offeror will not pay any additional consideration for
the Rights tendered pursuant to the Offer.
The undersigned hereby irrevocably appoints Alfred D. Kingsley and Gary K.
Duberstein, and each of them, and any other designees of the Offeror, the
attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to exercise all voting and other rights of the undersigned in
such manner as each such attorney-in-fact and proxy or his substitute shall, in
his sole discretion, deem proper with respect to all of the Shares and Rights
tendered hereby (and any and all other Shares, Rights, securities or rights
issued or issuable in respect thereof) which have been accepted for payment by
the Offeror prior to the time of any vote
<PAGE>
or other action at any meeting of stockholders of the Company (whether annual
or special and whether or not an adjourned meeting) or otherwise. This power of
attorney and proxy are irrevocable, and are granted in consideration of, and
are effective upon, the acceptance for payment of such Shares and Rights by the
Offeror in accordance with the terms of the Offer. Such acceptance for payment
shall revoke any other proxy or written consent granted by the undersigned at
any time with respect to such Shares and Rights (and all such other Shares,
Rights, securities or rights issued or issuable in respect thereof), and no
subsequent proxies shall be given or written consents executed by the
undersigned (and if given or executed, will not be deemed effective). The
undersigned acknowledges that in order for Shares and Rights to be deemed
validly tendered, immediately upon the acceptance for payment of such Shares
and Rights, the Offeror or the Offeror's designee must be able to exercise full
voting and all other rights which inure to a record and beneficial holder with
respect to such Shares and Rights.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares and
Rights tendered hereby (and any and all other Shares, Rights, securities or
rights issued or issuable in respect thereof) and that when the same are
accepted for payment by the Offeror, the Offeror will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claims. The undersigned will,
upon request, execute and deliver any additional documents deemed by the
Depositary or the Offeror to be necessary or desirable to complete the sale,
assignment and transfer of the Shares and Rights tendered hereby (and all such
other Shares, Rights, securities or rights issued or issuable in respect
thereof). All authority herein conferred or agreed to be conferred 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. Except as stated in
the Offer, this tender is irrevocable, provided that Shares and Rights tendered
pursuant to the Offer may be withdrawn at any time prior to their acceptance
for payment.
The undersigned hereby agrees that, if, on or after August 8, 1997, the
Company should declare or pay any cash dividend on the Shares or other
distribution on the Shares, or issue with respect to the Shares any additional
Shares, shares of any other class of capital stock, other than voting
securities or any securities convertible into, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing, payable or
distributable to stockholders of record on a date prior to the transfer of the
Shares purchased pursuant to the Offer to the Offeror or its nominee or
transferee on the Company's stock transfer records, then, subject to the
provisions of Section 14 of the Offer to Purchase, (1) the Offer Price (as
defined in the Offer to Purchase) may, in the sole discretion of the Offeror,
be reduced by the amount of any such cash dividends or cash distributions and
(2) the whole of any such noncash dividend, distribution or issuance to be
received by the tendering stockholders will (a) be received and held by the
tendering stockholders for the account of the Offeror and will be required to
be promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of the Offeror, accompanied by appropriate
documentation of transfer, or (b) at the direction of the Offeror, be exercised
for the benefit of the Offeror, in which case the proceeds of such exercise
will promptly be remitted to the Offeror. Pending such remittance and subject
to applicable law, the Offeror will be entitled to all rights and privileges as
owner of any such noncash dividend, distribution, issuance or proceeds and may
withhold the entire Offer Price or deduct from the Offer Price the amount or
value thereof, as determined by the Offeror in its sole discretion.
The undersigned understands that tenders of Shares and Rights pursuant to
any one of the procedures described in Section 3 of the Offer to Purchase and
in the instructions hereto will constitute an agreement between the undersigned
and the Offeror upon the terms and subject to the conditions of the Offer.
Without limiting the foregoing, if the Offer Price is amended in accordance
with the Offer, the price to be paid to the undersigned will be the amended
price notwithstanding the fact that a different price is stated in this Letter
of Transmittal. The undersigned recognizes that under certain circumstances set
forth in the Offer to Purchase, the Offeror may not be required to accept for
payment any of the Shares or Rights tendered hereby.
The undersigned acknowledges that, subject to the applicable rules of the
Securities and Exchange Commission (the "Commission"), the Offeror expressly
reserves the right, in its sole discretion, at any time and from time to time,
to extend the period during which the Offer is open for any reason, including
the occurrence of any of the conditions specified in Section 14 of the Offer to
Purchase, by giving oral or written notice of such extension to the Depositary.
During any such extension, all Shares and Rights previously tendered and not
withdrawn will remain subject to the Offer and subject to the right of a
tendering stockholder to withdraw such stockholder's Shares and Rights. UNDER
NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED
SHARES, WHETHER OR NOT THE OFFEROR EXERCISES ITS RIGHTS TO EXTEND THE OFFER.
The undersigned also acknowledges that, subject to the applicable
regulations of the Commission, the Offeror also expressly reserves the right,
in its sole discretion, at any time and from time to time, to (1) delay
acceptance for payment of or, regardless of whether such Shares or Rights were
theretofore accepted for payment, payment for any Shares or Rights pending
receipt of any regulatory or governmental approvals specified in Section 15 of
the Offer to Purchase, (2) terminate the Offer (whether or not any
<PAGE>
Shares or Rights have theretofore been accepted for payment) if any of the
conditions referred to in Section 14 of the Offer to Purchase have not been
satisfied or upon the occurrence of any of the events specified in Section 14
of the Offer to Purchase and (3) waive any condition or otherwise amend the
Offer in any respect, in each case by giving oral or written notice of such
delay, termination, waiver or amendment to the Depository and by making a
public announcement thereof.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of any Shares or Rights purchased, and
return any Shares or Rights not tendered or not purchased, in the name(s) of
the undersigned (and, in the case of Shares or Rights tendered by book-entry
transfer, by credit to the account at the Book-Entry Transfer Facility
designated above). Similarly, unless otherwise indicated under "Special
Delivery Instructions," please mail the check for the purchase price of any
Shares or Rights purchased, and return any certificates for Shares or Rights
not tendered or not purchased (and accompanying documents, as appropriate), to
the undersigned at the address shown below the undersigned's signature(s). In
the event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for the purchase price of
any Shares or Rights purchased, and return any Shares or Rights not tendered or
not purchased, in the name(s) of, and mail said check and any certificates to,
the person(s) so indicated. Unless otherwise indicated under "Special Payment
Instructions," please credit any Shares and Rights tendered herewith by
book-entry transfer that are not accepted for payment by crediting the account
at the Book-Entry Transfer Facility designated above. The undersigned
recognizes that the Offeror has no obligation, pursuant to the "Special Payment
Instructions," to transfer any Shares or Rights from the name of the registered
holder(s) thereof if the Offeror does not accept for payment any of the Shares
or Rights so tendered.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares and Rights
purchased and/or certificates for Shares and Rights not tendered or not
purchased are to be issued in the name of someone other than the undersigned,
or if Shares and Rights tendered by book-entry transfer that are not purchased
are to be returned by credit to an account at one of the Book-Entry Transfer
Facilities other than that designated above.
Issue check and/or certificates to:
Name:
-------------------------------------------------------------------------
(PLEASE PRINT)
Address:
----------------------------------------------------------------------
- -------------------------------------------------------------------------------
(ZIP CODE)
- -------------------------------------------------------------------------------
(TAXPAYER IDENTIFICATION NO.)
(SEE SUBSTITUTE FORM W-9)
/ / Credit unpurchased Shares and Rights tendered by book-entry transfer to the
account set forth below:
Name of Account Party
-----------------------------------------------------------
Account No. at
---------------------------------------------------------
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares and Rights
purchased and/or certificates for Shares and Rights not tendered or not
purchased are to be mailed to someone other than the undersigned or to the
undersigned at an address other than that shown below the undersigned's
signature(s).
Mail check and/or certificates to:
Name:
-------------------------------------------------------------------------
(PLEASE PRINT)
Address:
----------------------------------------------------------------------
- -------------------------------------------------------------------------------
(ZIP CODE)
- -------------------------------------------------------------------------------
(TAXPAYER IDENTIFICATION NO.)
<PAGE>
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature(s) of Owner(s)*
* Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificate(s) and/or Rights Certificate(s) or on a security position listing
or by the person(s) authorized to become registered holder(s) by certificates
and documents transmitted herewith. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, agent, officer of a corporation or
other person acting in a fiduciary or representative capacity, please provide
the following information and see Instruction 5.
Name(s):
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Name of Firm (if applicable):
--------------------------------------------------
Capacity (full title):
---------------------------------------------------------
Address:
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(ZIP CODE)
Daytime Area Code and Telephone Number
-----------------------------------------
Taxpayer Identification Number: ------------------------------------------------
Dated: , 1997
-----------------------------------------------------------
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE BELOW
- --------------------------------------------------------------------------------
<PAGE>
PAYER'S NAME: MARINE MIDLAND BANK
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
SUBSTITUTE Part I--PLEASE Part III--Social Security Number OR
Form W-9 PROVIDE YOUR TIN IN Employer Identification Number
Department of the Treasury THE BOX AT RIGHT
Internal Revenue Service AND CERTIFY BY
SIGNING AND DATING ------------------------------------------
BELOW. (If awaiting TIN write "Applied For")
--------------------------------------------------------------------
Payer's Request for Taxpayer Part II--For Payees exempt from backup withholding, see the enclosed
Identification Number (TIN) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 and
complete as instructed therein.
</TABLE>
- --------------------------------------------------------------------------------
Certification--Under penalty of perjury, I certify that:
(1) The number shown on this form is my correct TIN (or I am waiting for a
number to be issued to me); and
(2) I am not subject to backup withholding either because I have not been
notified by the IRS that I am subject to backup withholding as a result of
a failure to report all interest or dividends, or the IRS has notified me
that I am no longer subject to backup withholding.
Certificate Instructions--You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding, you
received another notification from the IRS that you were no longer subject to
backup withholding, do not cross out item (2). (Also see instructions in the
enclosed Guidelines.)
- ------------------------------------------------------------------------------
NAME
-------------------------------------------------------------------------
(Please Print)
SIGNATURE DATE
----------------------------------------------- -------------------
- -------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 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 ARE AWAITING YOUR TIN.
- -------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalty of perjury that a TIN has not been issued to me, and
either (1) I have mailed or delivered an application to receive a TIN to the
appropriate IRS 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 TIN by the time of payment, 31% of all payments pursuant
to the Offer made to me thereafter will be withheld until I provide a number.
SIGNATURE DATE
----------------------------------------------- -------------------
- -------------------------------------------------------------------------------
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, signatures
on all Letters of Transmittal must be guaranteed by a firm that is a bank,
broker, dealer, credit union, savings association or other entity which is a
member in good standing of the Securities Transfer Agent's Medallion Program
(each of the foregoing constituting an "Eligible Institution") unless the
Shares and/or Rights tendered thereby are tendered (i) by a registered holder
of Shares and/or Rights 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
Instruction 5. If the certificates are registered in the name of a person or
persons other than the signatory to this Letter of Transmittal, or if payment
is to be made or delivered to, or certificates evidencing unpurchased Shares
and/or Rights are to be issued or returned to, a person other than the
registered owner or owners, then the tendered certificates must be endorsed or
accompanied by duly executed stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates or
stock powers, with the signatures on the certificates or stock powers
guaranteed by an Eligible Institution as provided herein. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. UNLESS THE RIGHTS
CONDITION IS SATISFIED, STOCKHOLDERS WILL BE REQUIRED TO TENDER ONE RIGHT FOR
EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF SHARES. Unless the
Distribution Date has occurred, a tender of Shares will also constitute a
tender of the associated Rights. The Rights are currently represented by the
certificates for the Shares with respect to which the Rights were issued. The
Rights Agreement provides that until the close of business on the Distribution
Date, the Rights will be evidenced by Share Certificates and may be transferred
with and only with the Shares. The Rights Agreement further provides that, as
soon as practicable following the Distribution Date, separate Rights
Certificates are to be mailed by the Company or the Rights Agent to holders of
record of Shares as of the close of business on the Distribution Date. If the
Distribution Date occurs and separate Rights Certificates are distributed prior
to the time Shares are tendered herewith, Rights Certificates representing a
number of Rights equal to the number of Shares being tendered herewith must be
delivered to the Depositary or, if available, a Book-Entry Confirmation must be
received by the Depositary with respect thereto, in order for such Shares
tendered herewith to be validly tendered. If the Distribution Date occurs and
separate Rights Certificates are not distributed prior to the time Shares are
tendered herewith, Rights may be tendered prior to a stockholder receiving
separate Rights Certificates by use of the guaranteed delivery procedures
described below.
This Letter of Transmittal is to be used either if certificates are to be
forwarded herewith or, unless an Agent's Message is utilized, if the delivery
of Shares or Rights is to be made by book-entry transfer pursuant to the
procedures set forth in Section 3 of the Offer to Purchase. Certificates for
all physically delivered Shares and/or Rights, or a confirmation of a
book-entry transfer into the Depositary's account at one of the Book-Entry
Transfer Facilities of all Shares and/or Rights delivered electronically, as
well as a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and any other documents required by this Letter of
Transmittal, or an Agent's Message in the case of a book-entry transfer, must
be received by the Depositary at its address set forth on the front page of
this Letter of Transmittal on or prior to the Expiration Date and, if the
Distribution Date has occurred, Rights Certificates, or Book-Entry Confirmation
of a transfer of Rights into the Depositary's account at the Book-Entry
Transfer Facility, if available (together with, if Rights are forwarded
separately from Shares, a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) with any required signature guarantee, or
an Agent's Message in the case of a book-entry delivery, and any other
documents required by the Letter of Transmittal), must be received by the
Depositary at its address set forth on the front page of this Letter of
Transmittal on or prior to the Expiration Date, or if later, within five
business days after the date on which such Rights Certificates are distributed.
Stockholders who cannot deliver their Shares and/or Rights and all other
required documents to the Depositary on or prior to the Expiration Date must
tender their Shares pursuant to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase. Pursuant to such procedures: (a) such
tender must be made by or through an Eligible Institution; (b) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form provided by the Offeror, must be received by the Depositary on or prior to
the Expiration Date; and (c) the certificates for all tendered Shares and/or
Rights, in proper form for tender, or Book-Entry Confirmation of a transfer
into the Depositary's account at one of the Book-Entry Transfer Facilities of
all Shares and/or Rights delivered electronically, as well as a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), and
any other documents required by this Letter of Transmittal, or an Agent's
Message in the case of a book-entry transfer, must be received by the
Depositary (a) in the case of Shares, within five New York Stock Exchange
("NYSE") trading days after the date of execution of such Notice of Guaranteed
Delivery or (b) in the case of Rights, a period ending on the
<PAGE>
later of (1) five NYSE trading days after the date of execution of such Notice
of Guaranteed Delivery and (2) five business days after Rights Certificates are
distributed to stockholders, all as provided in Section 3 of the Offer to
Purchase. If Share Certificates and Rights Certificates are forwarded
separately to the Depositary, a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) must accompany each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND, IF APPLICABLE, RIGHTS
CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING DELIVERY THROUGH A BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND
RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED DELIVERED ONLY WHEN
ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-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.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal
(or facsimile thereof), the tendering stockholder waives any right to receive
any notice of the acceptance for payment of the Shares or Rights.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares and, if applicable, Rights,
should be listed on a separate schedule attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all of the Shares or Rights represented by
any certificate delivered to the Depositary are to be tendered, fill in the
number of Shares or Rights which are to be tendered in the box entitled "Number
of Shares Tendered" or "Number of Rights Tendered." In such case, a new
certificate for the remainder of the Shares or Rights represented by the old
certificate will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the appropriate box on this Letter of Transmittal,
as promptly as practicable following the expiration or termination of the
Offer. All Shares and Rights represented by certificates delivered to the
Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
and Rights tendered hereby, the signature(s) must correspond with the name(s)
as written on the face of the certificates without alteration, enlargement or
any change whatsoever.
If any of the Shares or Rights tendered hereby are held of record by two
or more persons, all such persons must sign this Letter of Transmittal.
If any of the Shares or Rights tendered hereby are registered in different
names on different certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal as there are different
registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares or Rights tendered hereby, no endorsements of certificates or separate
stock powers are required unless payment of the purchase price is to be made,
or Shares or Rights not tendered or not purchased are to be returned, in the
name of any person other than the registered holder(s). Signatures on any 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 Shares or Rights tendered hereby, the certificates
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
certificates for such Shares or Rights. Signature(s) on any such certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Offeror of the authority of such person so to act must be submitted.
6. STOCK TRANSFER TAXES. The Offeror will pay any stock transfer taxes
with respect to the sale and transfer of any Shares or Rights to it, or to its
order, pursuant to the Offer. If, however, payment of the purchase price is to
be made to, or Shares and/or Rights not tendered or not purchased are to be
returned in the name of, any person other than the registered holder(s), then
the amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) 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 exemption therefrom, is submitted.
<PAGE>
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
purchase price of any Shares or Rights purchased is to be issued, or any Shares
or Rights not tendered or not purchased are to be returned, in the name of a
person other than the person(s) signing this Letter of Transmittal, or if the
check or any certificates for Shares or Rights not tendered or not purchased
are to be mailed to someone other than the person(s) signing this Letter of
Transmittal or to the person(s) signing this Letter of Transmittal at an
address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Stockholders tendering Shares or Rights by
book-entry transfer may request that Shares or Rights not purchased be credited
to such account at any of the Book-Entry Transfer Facilities as such
stockholder may designate under "Special Payment Instructions." If no such
instructions are given, any such Shares or Rights not purchased will be
returned by crediting the account at the Book-Entry Transfer Facilities
designated above.
8. SUBSTITUTE FORM W-9. The tendering stockholder is required to provide
the Depositary with such stockholder's correct TIN on Substitute Form W-9,
which is provided above, unless an exemption applies. Failure to provide the
information on the Substitute Form W-9 may subject the tendering stockholder to
a $50 penalty imposed by the Internal Revenue Service and to 31% federal income
tax backup withholding on the payment of the purchase price for the Shares.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
or additional copies of the Offer to Purchase and this Letter of Transmittal
may be obtained from the Information Agent at the address or telephone number
set forth below.
10. WAIVER OF CONDITIONS. Subject to the applicable rules and regulations
of the Commission, the conditions of this Offer may be waived, in whole or in
part, by the Offeror, in its sole discretion, at any time and from time to
time, in the case of any Shares or Rights tendered.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Shares or Rights has been lost, destroyed or stolen, the
stockholder should promptly notify the Depositary. The stockholder will then be
instructed as to the steps that must be taken in order to replace the
certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed certificates
have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF), TOGETHER
WITH ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY
TRANSFER, AN AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE
RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE AND EITHER
CERTIFICATES FOR TENDERED SHARES AND RIGHTS MUST BE RECEIVED BY THE DEPOSITARY
OR SHARES AND RIGHTS MUST BE DELIVERED PURSUANT TO THE PROCEDURES FOR
BOOK-ENTRY TRANSFER, IN EACH CASE ON OR PRIOR TO THE EXPIRATION DATE, OR THE
TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR GUARANTEED DELIVERY.
<PAGE>
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary with such
stockholder's correct TIN on the Substitute Form W-9. If such stockholder is an
individual, the TIN is such stockholder's social security number. If the
Depositary is not provided with the correct TIN, the stockholder may be subject
to a $50 penalty imposed by the Internal Revenue Service. In addition, payments
that are made to such stockholder with respect to Shares and Rights purchased
pursuant to the Offer may be subject to backup withholding.
Part III of the Substitute Form W-9 may be utilized if the tendering
stockholder or other payee has not been issued a TIN and has applied for a TIN
or intends to apply for a TIN in the near future. If the tendering stockholder
or other payee acknowledges in Part III the foregoing, the stockholder or other
payee must also complete the Certificate of Awaiting Taxpayer Identification
Number in order to avoid backup withholding. Notwithstanding that Part III has
been completed in such manner and the Certificate of Awaiting Taxpayer
Identification Number is completed, the Depositary will withhold 31% on all
payments made prior to the time a properly certified TIN is provided to the
Depositary. However, such amounts will be refunded to such stockholder if a TIN
is provided to the Depositary within 60 days.
Certain stockholders (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that stockholder must submit a statement, signed under
penalty of perjury, attesting to that individual's exempt status. Such
statements may be obtained from the Depositary. All exempt recipients
(including foreign persons wishing to qualify as exempt recipients) should see
the enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If backup
withholding results in an overpayment of taxes, a refund may be obtained by the
stockholder upon filing an income tax return.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding on payments that are made
to a stockholder with respect to Shares and Rights purchased pursuant to the
Offer, the stockholder is required to notify the Depositary of his or her
correct TIN by completing the form certifying that the TIN provided on the
Substitute Form W-9 is correct.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual
owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidelines on which
number to report.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
(800) 223-2064
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
of
OUTBOARD MARINE CORPORATION
at
$18.00 Net Per Share
by
GREENMARINE ACQUISITION CORP.
a wholly-owned subsidiary of
GREENMARINE HOLDINGS LLC
- ------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON MONDAY, SEPTEMBER 8, 1997, UNLESS THE OFFER IS EXTENDED (AS EXTENDED, THE
"EXPIRATION DATE").
- ------------------------------------------------------------------------------
August 8, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Greenmarine Acquisition Corp., a Delaware corporation (the "Offeror") and
wholly-owned subsidiary of Greenmarine Holdings LLC, a Delaware limited
liability company (the "Parent"), is offering to purchase (i) all outstanding
shares of common stock, $0.15 par value per share (the "Shares"), of Outboard
Marine Corporation, a Delaware corporation (the "Company"), at a purchase price
of $18.00 per Share, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated August 8, 1997 (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer") enclosed herewith, and (ii) unless and
until the Offeror declares that the Rights Condition (as defined below) is
satisfied, the associated preferred stock purchase rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of April 24, 1996, as amended (the
"Rights Agreement"), between the Company and First Chicago Trust Company of New
York, as Rights Agent. Holders of Shares or Rights whose certificates for such
Shares (the "Share Certificates") or Rights (the "Rights Certificates") are not
immediately available, or who cannot deliver such certificates and all other
required documents to the Depositary (as defined in the Offer to Purchase) or
complete the procedures for book-entry transfer on or prior to the Expiration
Date must tender their Shares and/or Rights according to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase. Unless the context
requires otherwise, all references to Shares herein shall include the associated
Rights, and all references to Rights shall include all benefits that may inure
to the holders of Rights pursuant to the Rights Agreement.
The members of the Parent are Quasar Strategic Partners LDC, a Cayman
Islands limited duration company, Quantum Industrial Partners LDC, a Cayman
Islands limited duration company, and Greenlake Holdings LLC, a Delaware
limited liability company.
UNLESS THE RIGHTS ARE REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY,
OR THE OFFEROR IS SATISFIED, IN ITS SOLE DISCRETION, THAT THE RIGHTS HAVE BEEN
INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED
SECOND-STEP MERGER (COLLECTIVELY, THE "RIGHTS CONDITION"), HOLDERS OF SHARES
WILL BE REQUIRED TO TENDER ONE ASSOCIATED RIGHT FOR EACH SHARE TENDERED IN
ORDER TO EFFECT A VALID TENDER OF SUCH SHARE. ACCORDINGLY, STOCKHOLDERS WHO
SELL THEIR RIGHTS SEPARATELY FROM THEIR SHARES AND DO NOT OTHERWISE ACQUIRE
RIGHTS MAY NOT BE ABLE TO SATISFY THE REQUIREMENTS OF THE OFFER FOR THE TENDER
OF SHARES. IF THE DISTRIBUTION DATE (AS DEFINED IN THE OFFER TO PURCHASE) HAS
NOT OCCURRED PRIOR TO THE EXPIRATION DATE, A TENDER OF SHARES WILL ALSO
CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS.
<PAGE>
If the Distribution Date has occurred and Rights Certificates have been
distributed to holders of Shares prior to the time a holder's Shares are
purchased pursuant to the Offer, in order for Rights (and the corresponding
Shares) to be validly tendered, Rights Certificates representing a number of
Rights equal to the number of Shares tendered must be delivered to the
Depositary or, if available, a Book-Entry Confirmation (as defined in the Offer
to Purchase) must be received by the Depositary with respect thereto. If the
Distribution Date has occurred and Rights Certificates have not been
distributed prior to the time Shares are purchased pursuant to the Offer,
Rights may be tendered prior to a stockholder receiving Rights Certificates by
use of the guaranteed delivery procedures described in Section 3 of the Offer
to Purchase. In any case, a tender of Shares constitutes an agreement by the
tendering stockholder to deliver Rights Certificates representing a number of
Rights equal to the number of Shares tendered pursuant to the Offer to the
Depositary within five business days after the date Rights Certificates are
distributed. The Offeror reserves the right to require that the Depositary
receive Rights Certificates, or a Book-Entry Confirmation, if available, with
respect to such Rights, prior to accepting the related Shares for payment
pursuant to the Offer if the Distribution Date has occurred prior to the
Expiration Date.
If a stockholder desires to tender Shares and Rights pursuant to the Offer
and such stockholder's Share Certificates or, if applicable, Rights
Certificates are not immediately available (including, if the Distribution Date
has occurred and Rights Certificates have not yet been distributed), or time
will not permit all required documents to reach the Depositary on or prior to
the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares or Rights may nevertheless be tendered
according to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase. See Instruction 2 of the Letter of Transmittal. Delivery of
documents to a Book-Entry Transfer Facility (as defined in the Offer to
Purchase) in accordance with the Book-Entry Transfer Facility's procedures does
not constitute delivery to the Depositary.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED, AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE, THAT NUMBER
OF SHARES THAT, WHEN ADDED TO THE NUMBER OF SHARES BENEFICIALLY OWNED BY THE
OFFEROR AND THE PARENT, WOULD REPRESENT 90% OF ALL OUTSTANDING SHARES ON THE
DATE OF PURCHASE AND, AS A RESULT THEREOF, THE OFFEROR BEING SATISFIED, IN ITS
SOLE DISCRETION, THAT ON THE DATE OF PURCHASE IT WILL BE ABLE TO CONSUMMATE THE
PROPOSED SECOND-STEP MERGER AS A "SHORT-FORM MERGER" PURSUANT TO THE PROVISIONS
OF SECTION 253 OF THE DELAWARE GENERAL CORPORATION LAW IMMEDIATELY AFTER
CONSUMMATION OF THE OFFER, (2) THE RIGHTS CONDITION BEING SATISFIED, (3) THE
OFFEROR BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE PROPOSED MERGER CAN
BE CONSUMMATED WITHOUT THE NEED FOR A SUPERMAJORITY VOTE OF THE COMPANY'S
STOCKHOLDERS PURSUANT TO ARTICLE EIGHTEENTH OF THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION, (4) THE PURCHASER SHALL HAVE RECEIVED THE LOAN
PROCEEDS COMMITTED TO BE PROVIDED BY AMERICAN FINANCIAL GROUP, INC. ("AFG") IN
ACCORDANCE WITH THE COMMITMENT LETTER ISSUED BY AFG TO THE PURCHASER, DATED
AUGUST 7, 1997, (5) THE OFFEROR BEING SATISFIED, IN ITS SOLE DISCRETION, THAT,
UPON CONSUMMATION OF THE OFFER AND THE PROPOSED MERGER, THE COMPANY WILL NOT BE
IN DEFAULT UNDER ANY INSTRUMENT EVIDENCING THE COMPANY'S THEN OUTSTANDING
INDEBTEDNESS, OR, IF IN DEFAULT, THE OFFEROR AND THE PARENT HAVING OBTAINED,
PRIOR TO THE EXPIRATION DATE, ON TERMS REASONABLY ACCEPTABLE TO THE PARENT,
SUFFICIENT FINANCING TO ENABLE THE COMPANY TO REFINANCE OR REDEEM ANY SUCH
INDEBTEDNESS UPON CONSUMMATION OF THE OFFER AND THE PROPOSED MERGER, AND (6)
THE OFFEROR BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE PREVIOUSLY
ANNOUNCED AGREEMENT AND PLAN OF MERGER BETWEEN THE COMPANY AND DETROIT DIESEL
CORPORATION HAS BEEN TERMINATED IN ACCORDANCE WITH ITS TERMS. THE OFFER IS ALSO
SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED IN THE OFFER TO PURCHASE. SEE
THE INTRODUCTION AND SECTIONS 1, 12, 14 AND 15 OF THE OFFER TO PURCHASE.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares or Rights 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:
2
<PAGE>
1. The Offer to Purchase, dated August 8, 1997.
2. The Letter of Transmittal to tender Shares and Rights for your use
and for the information of your clients. Facsimile copies of the Letter of
Transmittal may be used to tender Shares and Rights.
3. The Notice of Guaranteed Delivery for Shares and Rights to be used to
accept the Offer if Share Certificates or Rights Certificates are not
immediately available (including if Rights Certificates have not yet been
distributed), or if such certificates and all other required documents
cannot be delivered to the Depositary on or prior to the Expiration Date or
if the procedure for book-entry transfer cannot be completed on or prior to
the Expiration Date.
4. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares or Rights registered in your name, including an
instruction form for obtaining such clients' instructions with regard to
the Offer.
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
6. A return envelope addressed to 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 5:00 P.M., NEW YORK CITY TIME, ON MONDAY, SEPTEMBER 8, 1997, UNLESS THE
OFFER IS EXTENDED.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), the Offeror expressly reserves the
right, in its sole discretion, at any time and from time to time, to extend the
period during which the Offer is open for any reason, including the occurrence
of any of the conditions specified in Section 14 of the Offer to Purchase, by
giving oral or written notice of such extension to the Depositary. During any
such extension, all Shares and Rights previously tendered and not withdrawn
will remain subject to the Offer and subject to the right of a tendering
stockholder to withdraw such stockholder's Shares and Rights. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED SHARES,
WHETHER OR NOT THE OFFEROR EXERCISES ITS RIGHTS TO EXTEND THE OFFER.
Subject to the applicable rules and regulations of the Commission, the
Offeror also expressly reserves the right, in its sole discretion, at any time
and from time to time, to (1) delay acceptance for payment of or, regardless of
whether such Shares or Rights were theretofore accepted for payment, payment
for any Shares or Rights pending receipt of any regulatory or governmental
approvals specified in Section 15 of the Offer to Purchase, (2) terminate the
Offer (whether or not any Shares or Rights have theretofore been accepted for
payment) if any of the conditions referred to in Section 14 of the Offer to
Purchase have not been satisfied or upon the occurrence of any of the events
specified in Section 14 of the Offer to Purchase and (3) waive any condition or
otherwise amend the Offer in any respect, in each case by giving oral or
written notice of such delay, termination, waiver or amendment to the
Depository and by making a public announcement thereof.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal (or facsimile thereof) 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 Rights, and any
other required documents should be sent to the Depositary, and (ii) either Share
Certificates and Rights Certificates representing the tendered Shares and Rights
should be delivered to the Depositary, or such Shares or Rights should be
tendered by book-entry transfer into the Depositary's account maintained at one
of the Book-Entry Transfer Facilities (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 or Rights wish to tender, but it is impracticable for
them to forward their Share Certificates or Rights 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.
3
<PAGE>
The Offeror will not pay any fees or commissions to any broker, dealer or
any other person for soliciting tenders of Shares or Rights pursuant to the
Offer. The Offeror will, however, upon request, reimburse you for customary
mailing and handling expenses incurred by you in forwarding any of the enclosed
materials to your customers. The Offeror 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 Georgeson & Company Inc., as the Information Agent, at the address and
telephone number set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed materials may be obtained from the
Information Agent.
Very truly yours,
Greenmarine Acquisition Corp.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE OFFEROR, THE DEPOSITARY, 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.
4
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
of
OUTBOARD MARINE CORPORATION
at
$18.00 NET PER SHARE
by
GREENMARINE ACQUISITION CORP.
a wholly-owned subsidiary of
GREENMARINE HOLDINGS LLC
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON MONDAY, SEPTEMBER 8, 1997, UNLESS THE OFFER IS EXTENDED (AS EXTENDED, THE
"EXPIRATION DATE").
- -------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated August 8,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer") relating to an offer by Greenmarine Acquisition Corp., a Delaware
corporation (the "Offerer") and wholly-owned subsidiary of Greenmarine Holdings
LLC, a Delaware limited liability company (the "Parent"), to purchase (i) all
outstanding shares of common stock, par value $0.15 per share (the "Shares"),
of Outboard Marine Corporation, a Delaware corporation (the "Company"), at a
purchase price of $18.00 per Share, net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer,
and (ii) unless and until the Offeror declares that the Rights Condition (as
defined below) is satisfied, the associated preferred stock purchase rights
(the "Rights") issued pursuant to the Rights Agreement, dated as of April 24,
1996, as amended (the "Rights Agreement"), between the Company and First
Chicago Trust Company of New York, as Rights Agent. This material is being
forwarded to you as the beneficial owner of Shares carried by us in your
account but not registered in your name. Unless the context requires otherwise,
all references to Shares herein shall include the associated Rights, and all
references to Rights shall include all benefits that may inure to the holders
of Rights pursuant to the Rights Agreement.
The members of the Parent are Quasar Strategic Partners LDC, a Cayman
Islands limited duration company, Quantum Industrial Partners LDC, a Cayman
Islands limited duration company, and Greenlake Holdings LLC, a Delaware
limited liability company.
UNLESS THE RIGHTS ARE REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY OR
THE PURCHASER IS SATISFIED, IN ITS SOLE DISCRETION, THAT SUCH RIGHTS HAVE BEEN
INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED SECOND-
STEP MERGER (COLLECTIVELY, THE "RIGHTS CONDITION"), HOLDERS OF SHARES WILL BE
REQUIRED TO TENDER ONE ASSOCIATED RIGHT FOR EACH SHARE TENDERED IN ORDER TO
EFFECT A VALID TENDER OF SUCH SHARE. ACCORDINGLY, STOCKHOLDERS WHO SELL THEIR
RIGHTS SEPARATELY FROM THEIR SHARES AND DO NOT OTHERWISE ACQUIRE RIGHTS MAY NOT
BE ABLE TO SATISFY THE REQUIREMENTS OF THE OFFER FOR THE TENDER OF SHARES. IF
THE DISTRIBUTION DATE (AS DEFINED IN THE OFFER TO PURCHASE) HAS NOT OCCURRED
PRIOR TO THE EXPIRATION DATE, A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER
OF THE ASSOCIATED RIGHTS.
If the Distribution Date has occurred and certificates for Rights ("Rights
Certificates") have been distributed to holders of Shares prior to the time a
holder's Shares are purchased pursuant to the Offer, in order for Rights (and
the corresponding Shares) to be validly tendered, Rights Certificates
representing a number of Rights equal to the number of Shares tendered must be
delivered to the Depositary (as defined in the Offer to Purchase) or, if
available, a Book-Entry Confirmation (as defined in the Offer to Purchase) must
be received by the Depositary with respect thereto. If the Distribution Date
has occurred and Rights Certificates have not been distributed prior to the
time Shares are purchased pursuant to the Offer, Rights may be tendered prior
to a stockholder receiving Rights Certificates by use of the guaranteed
delivery procedures described in Section 3 of the Offer to Purchase. In any
case, a tender of Shares constitutes an agreement by the tendering stockholder
to deliver Rights Certificates representing a number of Rights equal to the
number of Shares tendered pursuant to
<PAGE>
the Offer to the Depositary within five business days after the date Rights
Certificates are distributed. The Offeror reserves the right to require that
the Depositary receive Rights Certificates, or a Book-Entry Confirmation, if
available, with respect to such Rights, prior to accepting the related Shares
for payment pursuant to the Offer if the Distribution Date has occurred prior
to the Expiration Date.
If a stockholder desires to tender Shares and Rights pursuant to the Offer
and such stockholder's certificates for Shares ("Share Certificates") or, if
applicable, Rights Certificates are not immediately available (including, if
the Distribution Date has occurred and Rights Certificates have not yet been
distributed), or time will not permit all required documents to reach the
Depositary on or prior to the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis, such Shares or Rights may
nevertheless be tendered according to the guaranteed delivery procedures set
forth in Section 3 of the Offer to Purchase. See Instruction 2 of the Letter of
Transmittal. Delivery of documents to a Book-Entry Transfer Facility (as
defined in the Offer to Purchase) in accordance with the Book-Entry Transfer
Facility's procedures does not constitute delivery to the Depositary.
WE ARE THE HOLDER OF RECORD OF SHARES AND RIGHTS HELD BY US FOR YOUR
ACCOUNT. A TENDER OF SUCH SHARES AND RIGHTS 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.
Accordingly, we request instructions as to whether you wish to tender any
or all of the Shares and/or Rights held by us for your account, upon the terms
and conditions set forth in the Offer.
Please note the following:
1. The tender price is $18.00 per Share, including the associated
Rights, net to you in cash, without interest thereon, upon the terms and
subject to the conditions of the Offer.
2. The Offer is being made for all outstanding Shares and Rights.
3. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON MONDAY, SEPTEMBER 8, 1997, UNLESS THE OFFER IS EXTENDED.
4. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING
VALIDLY TENDERED, AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE,
THAT NUMBER OF SHARES THAT, WHEN ADDED TO THE NUMBER OF SHARES BENEFICIALLY
OWNED BY THE OFFEROR AND THE PARENT, WOULD REPRESENT 90% OF ALL OUTSTANDING
SHARES ON THE DATE OF PURCHASE AND, AS A RESULT THEREOF, THE PURCHASER
BEING SATISFIED, IN ITS SOLE DISCRETION, THAT ON THE DATE OF PURCHASE IT
WILL BE ABLE TO CONSUMMATE THE PROPOSED SECOND-STEP MERGER AS A "SHORT-FORM
MERGER" PURSUANT TO THE PROVISIONS OF SECTION 253 OF THE DELAWARE GENERAL
CORPORATION LAW IMMEDIATELY AFTER CONSUMMATION OF THE OFFER, (2) THE RIGHTS
CONDITION BEING SATISFIED, (3) THE OFFEROR BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE PROPOSED MERGER CAN BE CONSUMMATED WITHOUT THE NEED
FOR A SUPERMAJORITY VOTE OF THE COMPANY'S STOCKHOLDERS PURSUANT TO ARTICLE
EIGHTEENTH OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION, (4) THE
PURCHASER SHALL HAVE RECEIVED THE LOAN PROCEEDS COMMITTED TO BE PROVIDED BY
AMERICAN FINANCIAL GROUP, INC. ("AFG") IN ACCORDANCE WITH THE COMMITMENT
LETTER ISSUED BY AFG TO THE PURCHASER, DATED AUGUST 7, 1997, (5) THE
OFFEROR BEING SATISFIED, IN ITS SOLE DISCRETION, THAT, UPON CONSUMMATION OF
THE OFFER AND THE PROPOSED MERGER, THE COMPANY WILL NOT BE IN DEFAULT UNDER
ANY INSTRUMENT EVIDENCING THE COMPANY'S THEN OUTSTANDING INDEBTEDNESS, OR,
IF IN DEFAULT, THE OFFEROR AND THE PARENT HAVING OBTAINED, PRIOR TO THE
EXPIRATION DATE, ON TERMS REASONABLY ACCEPTABLE TO THE PARENT, SUFFICIENT
FINANCING TO ENABLE THE COMPANY TO REFINANCE OR REDEEM ANY SUCH
INDEBTEDNESS UPON CONSUMMATION OF THE OFFER AND THE PROPOSED MERGER, AND
(6) THE OFFEROR BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE
PREVIOUSLY ANNOUNCED AGREEMENT AND PLAN OF MERGER BETWEEN THE COMPANY AND
DETROIT DIESEL CORPORATION HAS BEEN TERMINATED IN ACCORDANCE WITH ITS
TERMS. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS CONTAINED IN
THE OFFER TO PURCHASE. SEE THE INTRODUCTION AND SECTIONS 1, 12, 14 AND 15
OF THE OFFER TO PURCHASE.
2
<PAGE>
5. 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 transfer of Shares pursuant to the
Offer.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), the Offeror expressly reserves the
right, in its sole discretion, at any time and from time to time, to extend the
period during which the Offer is open for any reason, including the occurrence
of any of the conditions specified in Section 14 of the Offer to Purchase, by
giving oral or written notice of such extension to the Depositary. During any
such extension, all Shares and Rights previously tendered and not withdrawn
will remain subject to the Offer and subject to the right of a tendering
stockholder to withdraw such stockholder's Shares and Rights. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR TENDERED SHARES,
WHETHER OR NOT THE OFFEROR EXERCISES ITS RIGHTS TO EXTEND THE OFFER.
Subject to the applicable rules and regulations of the Commission, the
Offeror also expressly reserves the right, in its sole discretion, at any time
and from time to time, to (1) delay acceptance for payment of or, regardless of
whether such Shares or Rights were theretofore accepted for payment, payment
for any Shares or Rights pending receipt of any regulatory or governmental
approvals specified in Section 15 of the Offer to Purchase, (2) terminate the
Offer (whether or not any Shares or Rights have theretofore been accepted for
payment) if any of the conditions referred to in Section 14 of the Offer to
Purchase have not been satisfied or upon the occurrence of any of the events
specified in Section 14 of the Offer to Purchase and (3) waive any condition or
otherwise amend the Offer in any respect, in each case by giving oral or
written notice of such delay, termination, waiver or amendment to the
Depository and by making a public announcement thereof.
If you wish to have us tender any or all of your Shares and/or Rights,
please so instruct us by completing, executing, detaching and returning to us
the instruction form contained in this letter. An envelope to return your
instruction form to us is enclosed. If you authorize the tender of your Shares
and/or Rights, all such Shares and Rights will be tendered unless otherwise
indicated in the instruction form. PLEASE FORWARD YOUR INSTRUCTIONS TO US AS
SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO TENDER YOUR SHARES AND RIGHTS ON
YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely pursuant to the Offer to Purchase and the related
Letter of Transmittal, and any supplements or amendments thereto. The Offer is
not being made to, nor will tenders be accepted from, or on behalf of, holders
of Shares or Rights residing in any jurisdiction in which the making of the
Offer or acceptance thereof would not be in compliance with the securities laws
of such jurisdiction. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer will be deemed to be made on behalf of the Offeror by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered to the Offeror and not
withdrawn as, if and when the Offeror gives oral or written notice to the
Depositary, of the Offeror's acceptance for payment of such Shares. 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 purposes of receiving payment from the Offeror and
transmitting payment to tendering stockholders. In all cases, payment for
Shares accepted for payment pursuant to the Offer will be made only after
timely receipt by the Depositary of (i) certificates for (or a timely
Book-Entry Confirmation with respect to) such Shares and, if the Distribution
Date has occurred, certificates for (or a timely Book-Entry Confirmation with
respect to) the associated Rights (unless the Offeror elects, in its sole
discretion, to make payment for such Shares pending receipt of the certificates
for, or a Book-Entry Confirmation with respect to, such Rights), (ii) a Letter
of Transmittal (or facsimile thereof), properly completed and duly executed
with any required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message (as defined in the Offer to Purchase), and (iii)
any other documents required by the Letter of Transmittal.
3
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
OUTBOARD MARINE CORPORATION
AT
$18.00 NET PER SHARE
BY
GREENMARINE ACQUISITION CORP.
a wholly-owned subsidiary of
GREENMARINE HOLDINGS LLC
The undersigned acknowledge(s) receipt of your letter enclosing the Offer
to Purchase, dated August 8, 1997 (the "Offer to Purchase"), and the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer") relating to the Offer by
Greenmarine Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of Greenmarine Holdings LLC, a Delaware limited liability company
(the "Parent"), to purchase (i) all outstanding shares of common stock, par
value $0.15 per share (the "Shares"), of Outboard Marine Corporation, a
Delaware corporation (the "Company"), and (ii) unless and until the Offeror
declares that the Rights Condition (as defined in the Offer to Purchase) is
satisfied, the associated preferred stock purchase rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of April 24, 1996, as amended,
between the Company and First Chicago Trust Company of New York, as Rights
Agent. The members of the Parent are Quasar Strategic Partners LDC, a Cayman
Islands limited duration company, Quantum Industrial Partners LDC, a Cayman
Islands limited duration company, and Greenlake Holdings LLC, a Delaware
limited liability company.
You are instructed to tender the number of Shares and Rights indicated
below (or, if no number is indicated below, all Shares and Rights) that are
held by you for the account of the undersigned, upon the terms and subject to
the conditions set forth in the Offer.
SIGN HERE
_______________________________________
_______________________________________
Signature(s)
_______________________________________
Number of Shares to be Tendered* _______________________________________
Please Print Name(s) and
Address(es) Here
_____________________________ Shares
_______________________________________
Area Code and Telephone No.
Number of Rights to be Tendered*
_____________________________ Rights _______________________________________
Taxpayer Identification or
Social Security No.(s)
Dated: , 1997
- ------------
* UNLESS THE RIGHTS CONDITION IS SATISFIED, STOCKHOLDERS WILL BE REQUIRED TO
TENDER ONE RIGHT FOR EACH SHARE TENDERED TO EFFECT A VALID TENDER OF SUCH
SHARES. UNLESS THE DISTRIBUTION DATE OCCURS, A TENDER OF SHARES WILL ALSO
CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS. UNLESS OTHERWISE INDICATED, IT
WILL BE ASSUMED THAT ALL OF YOUR SHARES AND RIGHTS ARE TO BE TENDERED.
4
<PAGE>
NOTICE OF GUARANTEED DELIVERY
for
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
of
OUTBOARD MARINE CORPORATION
As set forth in Section 3 of the Offer to Purchase (as defined below),
this Notice of Guaranteed Delivery, or one substantially equivalent hereto,
must be used to accept the Offer (as defined below) if certificates for shares
of common stock, $0.15 par value per share (the "Shares"), of Outboard Marine
Corporation, a Delaware corporation (the "Company"), and/or associated
preferred stock purchase rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of April 24, 1996, as amended, between the Company and
First Chicago Trust Company of New York, as Rights Agent, are not immediately
available (including, if certificates for Rights have not yet been distributed
by the Company or the Rights Agent), or if the procedure for book-entry
transfer cannot be completed on a timely basis or time will not permit all
required documents to reach the Depositary on or prior to the Expiration Date
(as defined in the Offer to Purchase). This Notice of Guaranteed Delivery may
be delivered by hand, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution (as defined in the Offer to
Purchase). See Section 3 of the Offer to Purchase, dated August 8, 1997 (the
"Offer to Purchase").
TO: MARINE MIDLAND BANK, DEPOSITARY
By Mail: By Overnight Courier: By Hand Delivery:
140 Broadway, Level A 140 Broadway, Level A 140 Broadway, Level A
New York, NY 10005-1180 New York, NY 10005-1180 New York, NY 10005-1180
Attn: Corporate Trust Attn: Corporate Trust Attn: Corporate Trust
Operations Operations Operations
By Facsimile Transmission:
(212) 658-2292
To Confirm:
(212) 658-5931
---------------------
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an Eligible Institution under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares and/or Rights to the Depositary within the time period
shown herein. Failure to do so could result in a financial loss to such
Eligible Institution.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Greenmarine Acquisition Corp., upon the
terms and subject to the conditions set forth in the Offer to Purchase and the
related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"), receipt of which is
hereby acknowledged, Shares and/or Rights of the Company pursuant to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.
Number of Shares _______________________ Name(s) of Record Holder(s):
Number of Rights _______________________ _____________________________________
Certificate Nos. (if available): _____________________________________
(PLEASE PRINT)
________________________________________
Address(es): ________________________
________________________________________
_____________________________________
(ZIP CODE)
(Check one box if Shares or Rights will
be tendered by book-entry transfer)
[ ] The Depository Trust Company Area Code and Tel. No.: _____________
[ ] Midwest Securities Trust Company Signature(s): _______________________
[ ] Philadelphia Depository Trust Company _____________________________________
Account Number __________________________ Dated: ______________________________
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
2
<PAGE>
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
Agent's Medallion Program, guarantees the delivery to the Depositary of the
Shares (or Rights, if applicable) tendered hereby, together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), or an
Agent's Message (as defined in the Offer to Purchase) in the case of a
book-entry transfer, and any other required documents, all within (1) in the
case of Shares, five New York Stock Exchange ("NYSE") trading days of the date
hereof or (2) in the case of Rights, a period ending on the later of (a) five
NYSE trading days after the date hereof and (b) five business days after the
date certificates for Rights are distributed to stockholders.
Name of Firm:___________________________ _____________________________________
AUTHORIZED SIGNATURE
Address: _______________________________
Name: _______________________________
(PLEASE PRINT)
________________________________________
(ZIP CODE)
Title: ______________________________
Area Code and
Tel No.: _______________________________ Dated:_______________________________
DO NOT SEND CERTIFICATES FOR SHARES OR RIGHTS WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES SHOULD BE SENT WITH THE LETTER OF TRANSMITTAL.
Dated: _____________ , 1997
3
<PAGE>
EXHIBIT (a)(6)
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the
Payer.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number
to give the payer.
<TABLE>
<CAPTION>
- --------------------------------------------------------- ---------------------------------------------------------
<S> <C> <C> <C>
For this type of account: Give the For this type of account: Give the EMPLOYER
SOCIAL SECURITY IDENTIFICATION
number of- number of-
- --------------------------------------------------------- ---------------------------------------------------------
1. An individual's account The individual 9. A valid trust, estate, or The legal entity (Do not
pension trust furnish the identification
2. Two or more individuals The actual owner of the number of the personal
(joint account) account or, if combined representative or trustee
funds, any one of the unless the legal entity itself
individuals(1) is not designated in the
account title.)(5)
3. Husband and wife The actual owner of the
(joint account) account or, if joint funds.
either person(1) 10. Corporate account The corporation
4. Custodian account of a The minor(2) 11. Religious, charitable, or The organization
minor (Uniform Gift to educational organization
Minors Act) account
12. Partnership account The partnership
5. Adult and minor The adult or, if the minor is
(joint account) the only contributor, the 13. Association, club or The organization
minor(1) other tax-exempt
organization
6. Account in the name of The ward, minor, or
guardian or committee incompetent person(3) 14. A broker or registered The broker or nominee
for a designated ward, nominee
minor or incompetent
person 15. Account with the The public entity
Department of
7. a. The usual revocable The grantor-trustee(1) Agriculture in the name
savings trust account of a public entity (such
(grantor is also as a State or local
trustee) government, school
district, or prison) that
b. So-called trust The actual owner(1) receives agricultural
account that is not a program payments
legal or valid trust
under state law
8. Sole proprietorship The owner(4)
account
- --------------------------------------------------------- ---------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more then one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of
the Social Security Administration or the Internal Revenue Service and apply for
a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include
the following:
* A corporation.
* A financial institution.
* An organization exempt from tax under section 501(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), or an individual
retirement plan.
* The United States or any agency or instrumentality thereof.
* A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
* A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
* An international organization or any agency or instrumentality thereof.
* A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
* A real estate investment trust.
* A common trust fund operated by a bank under section 584(a) of the Code.
* An exempt charitable remainder trust, or a nonexempt trust described in
section 4947(a)(1) of the Code.
* An entity registered at all times under the Investment Company Act of 1940.
* A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
* Payments to nonresident aliens subject to withholding under section 1441 of
the Code.
* Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
* Payments of patronage dividends where the amount received is not paid in
money.
* Payments made by certain foreign organizations.
* Section 404(k) payments made by an ESOP.
* Payments made to a nominee.
Payments of interest not generally subject to backup withholding include
the following:
* Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this
<PAGE>
interest is $600 or more and is paid in the course of the payer's trade or
business and you have not provided your correct taxpayer identification
number to the payer.
* Payments of tax-exempt interest (including exempt-interest dividends
under section 852 of the Code).
* Payments described in section 6049(b)(5) of the Code to non-resident
aliens.
* Payments on tax-free covenant bonds under section 1451 of the Code.
* Payments made by certain foreign organizations.
* Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE MUST STILL COMPLETE THE SUBSTITUTE FORM W-9
ENCLOSED HEREWITH TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE
SUBSTITUTE FORM W-9 WITH THE PAYER, REMEMBERING TO CERTIFY YOUR TAXPAYER
IDENTFICATION NUMBER ON PART III OF THE FORM. WRITE "EXEMPT" ON THE FACE OF
THE FORM AND SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
Payments that are not subject to information reporting are also not subject
to backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044,
6045, 6049, 6050A, and 6050N of the Code and their regulations.
Privacy Act Notice.--Section 6109 requires most recipients of dividends,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. Payers must be
given the numbers whether or not recipients are required are required to file a
tax return. Payers must generally withhold 31% of taxable interest, dividends,
and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) Civil Penalty for False Information With Respect to Withholding.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) Criminal Penalty for Falsifying Information.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE>
This announcement is neither an offer to purchase nor a
solicitation of an offer to sell Shares or Rights. The Offer is made solely by
the Offer to Purchase, dated August 8, 1997, and the related Letter of
Transmittal, and is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares or Rights in any jurisdiction in which the making
of the Offer or the acceptance thereof would not be in compliance with the laws
of such jurisdiction. In any jurisdiction where 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 one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
OUTBOARD MARINE CORPORATION
at
$18.00 Net Per Share
by
GREENMARINE ACQUISITION CORP.
a wholly-owned subsidiary of
GREENMARINE HOLDINGS LLC
Greenmarine Acquisition Corp., a Delaware corporation (the
"Purchaser") and wholly-owned subsidiary of Greenmarine Holdings LLC, a Delaware
limited liability company (the "Parent"), is offering to purchase (i) all
outstanding shares of common stock, par value $0.15 per share (the "Shares"), of
Outboard Marine Corporation, a Delaware corporation (the "Company"), at a price
of $18.00 per Share, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated August 8, 1997 (the "Offer to Purchase"), and the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"), and (ii) unless and until the Purchaser
declares that the Rights Condition (as defined below) is satisfied, the
associated preferred stock purchase rights (the
<PAGE>
"Rights") issued pursuant to the Rights Agreement, dated as of April 24, 1996,
as amended (the "Rights Agreement"), between the Company and First Chicago Trust
Company of New York, as Rights Agent. Unless the context requires otherwise, all
references to Shares herein shall include the associated Rights, and all
references to Rights shall include all benefits that may inure to the holders of
Rights pursuant to the Rights Agreement.
The members of the Parent are Quasar Strategic Partners LDC, a
Cayman Islands limited duration company ("QSP"), Quantum Industrial Partners
LDC, a Cayman Islands limited duration company ("QIP"), and Greenlake Holdings
LLC, a Delaware limited liability company ("Greenlake").
UNLESS THE RIGHTS ARE REDEEMED BY THE BOARD OF DIRECTORS OF
THE COMPANY, OR THE PURCHASER IS SATISFIED, IN ITS SOLE DISCRETION, THAT THE
RIGHTS HAVE BEEN INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE
PROPOSED SECOND-STEP MERGER (COLLECTIVELY, THE "RIGHTS CONDITION"), STOCKHOLDERS
ARE REQUIRED TO TENDER ONE RIGHT FOR EACH SHARE TENDERED IN ORDER TO EFFECT A
VALID TENDER OF SHARES IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN SECTION 3
OF THE OFFER TO PURCHASE. UNLESS THE DISTRIBUTION DATE (AS DEFINED IN THE OFFER
TO PURCHASE) HAS OCCURRED, A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF
THE ASSOCIATED RIGHTS.
The purpose of the Offer is to enable the Parent to acquire
control of, and the entire equity interest in, the Company. The Offer, as the
first step in the acquisition of the Company, is intended to facilitate the
acquisition of all outstanding Shares.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 5:00 P.M., NEW YORK CITY TIME, ON MONDAY,
SEPTEMBER 8, 1997, UNLESS THE OFFER IS EXTENDED
(AS EXTENDED, THE "EXPIRATION DATE")
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE
BEING VALIDLY TENDERED, AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION DATE,
THAT NUMBER OF SHARES THAT, WHEN ADDED TO THE NUMBER OF SHARES BENEFICIALLY
OWNED BY THE PURCHASER AND THE PARENT, WOULD REPRESENT 90% OF ALL OUTSTANDING
SHARES ON THE DATE OF PURCHASE AND, AS A RESULT THEREOF, THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT ON THE DATE OF PURCHASE IT WILL BE ABLE
TO CONSUMMATE THE PROPOSED SECOND-STEP MERGER AS A
2
<PAGE>
"SHORT-FORM MERGER" PURSUANT TO THE PROVISIONS OF SECTION 253 OF THE DELAWARE
GENERAL CORPORATION LAW (THE "DGCL") IMMEDIATELY AFTER CONSUMMATION OF THE
OFFER, (2) THE RIGHTS CONDITION BEING SATISFIED, (3) THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT THE PROPOSED MERGER CAN BE CONSUMMATED
WITHOUT THE NEED FOR A SUPERMAJORITY VOTE OF THE COMPANY'S STOCKHOLDERS PURSUANT
TO ARTICLE EIGHTEENTH OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION,
(4) THE PURCHASER SHALL HAVE RECEIVED THE FUNDS COMMITTED TO BE PROVIDED BY
AMERICAN FINANCIAL GROUP, INC. ("AFG") IN ACCORDANCE WITH THE COMMITMENT LETTER
ISSUED BY AFG TO THE PURCHASER, DATED AUGUST 7, 1997, (5) THE PURCHASER BEING
SATISFIED, IN ITS SOLE DISCRETION, THAT, UPON CONSUMMATION OF THE OFFER AND THE
PROPOSED MERGER, THE COMPANY WILL NOT BE IN DEFAULT UNDER ANY INSTRUMENT
EVIDENCING THE COMPANY'S THEN OUTSTANDING INDEBTEDNESS, OR, IF IN DEFAULT, THE
PURCHASER AND THE PARENT HAVING OBTAINED, PRIOR TO THE EXPIRATION DATE, ON TERMS
REASONABLY ACCEPTABLE TO THE PARENT, SUFFICIENT FINANCING TO ENABLE THE COMPANY
TO REFINANCE OR REDEEM ANY SUCH INDEBTEDNESS UPON CONSUMMATION OF THE OFFER AND
THE PROPOSED MERGER, AND (6) THE PURCHASER BEING SATISFIED, IN ITS SOLE
DISCRETION, THAT THE PREVIOUSLY ANNOUNCED AGREEMENT AND PLAN OF MERGER BETWEEN
THE COMPANY AND DETROIT DIESEL CORPORATION HAS BEEN TERMINATED IN ACCORDANCE
WITH ITS TERMS. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS
CONTAINED IN THE OFFER TO PURCHASE. SEE THE INTRODUCTION AND SECTIONS 1, 12, 14
AND 15 OF THE OFFER TO PURCHASE.
For purposes of the Offer, the Purchaser will be deemed to
have accepted for payment, and thereby purchased, Shares validly tendered to the
Purchaser and not withdrawn as, if and when the Purchaser gives oral or written
notice to Marine Midland Bank (the "Depositary"), of the Purchaser's acceptance
for payment of such Shares. 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 purposes of receiving payment
from the Purchaser and transmitting payment to tendering stockholders. In all
cases, payment for Shares accepted for payment pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates for (or a
timely Book-Entry Confirmation (as defined in the Offer to Purchase) with
respect to) such Shares and, if the Distribution Date has occurred, certificates
for (or a timely Book-Entry Confirmation with respect to) the associated Rights
(unless the Purchaser elects, in its sole discretion, to make payment for
3
<PAGE>
such Shares pending receipt of the certificates for, or a Book-Entry
Confirmation with respect to, such Rights), (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase), and (iii) any other documents
required by the Letter of Transmittal.
Except as otherwise provided below, tenders of Shares and
Rights are irrevocable. Shares and Rights tendered pursuant to the Offer may be
withdrawn at any time on or prior to the Expiration Date and, unless theretofore
accepted for payment and paid for by the Purchaser pursuant to the Offer, may
also be withdrawn at any time after October 7, 1997 (or such later date as may
apply in case the Offer is extended). A withdrawal of Shares will also
constitute a withdrawal of the associated Rights. Rights may not be withdrawn
unless the associated Shares are also withdrawn. For a withdrawal to be
effective, a written or facsimile transmission notice of withdrawal must be
timely received by the Depositary at its address as set forth on the back cover
of the Offer to Purchase and must specify the name of the person having tendered
the Shares and Rights to be withdrawn, the number of Shares and Rights to be
withdrawn and (if certificates have been tendered) the name of the registered
holder of the Shares and Rights to be withdrawn, if different from the name of
the person who tendered such Shares and Rights. If certificates for Shares or
Rights 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, unless such Shares or
Rights have been tendered by an Eligible Institution (as defined in the Offer to
Purchase), the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares or Rights 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 also specify the name and number of the
account at the appropriate Book-Entry Transfer Facility (as defined in the Offer
to Purchase) to be credited with the withdrawn Shares or Rights and otherwise
comply with such Book-Entry Transfer Facility's procedures. Withdrawals of
tenders of Shares and Rights may not be rescinded, and any Shares and Rights
properly withdrawn will thereafter be deemed not validly tendered for any
purposes of the Offer. However, withdrawn Shares and Rights may be retendered by
again following one of the procedures described in Section 3 of the Offer to
Purchase at any time prior to the Expiration Date. All questions as to the form
and validity (including time of receipt) of notices of withdrawal will be
determined by the Purchaser, in its sole discretion, which determination shall
be final and binding.
Subject to the applicable rules and regulations of the
Securities and Exchange Commission (the "Commission"), the Purchaser expressly
reserves the right, in its sole discretion, at any time and from time to time,
to extend the period during which the Offer is open for any reason, including
the occurrence of any of the conditions specified in Section 14
4
<PAGE>
of the Offer to Purchase, by giving oral or written notice of such extension to
the Depositary. During any such extension, all Shares and Rights previously
tendered and not withdrawn will remain subject to the Offer and subject to the
right of a tendering stockholder to withdraw such stockholder's Shares and
Rights. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR
TENDERED SHARES, WHETHER OR NOT THE PURCHASER EXERCISES ITS RIGHTS TO EXTEND THE
OFFER.
Subject to the applicable rules and regulations of the
Commission, the Purchaser also expressly reserves the right, in its sole
discretion, at any time and from time to time, to (1) delay acceptance for
payment of or, regardless of whether such Shares or Rights were theretofore
accepted for payment, payment for any Shares or Rights pending receipt of any
regulatory or governmental approvals specified in Section 15 of the Offer to
Purchase, (2) terminate the Offer (whether or not any Shares or Rights have
theretofore been accepted for payment) if any of the conditions referred to in
Section 14 of the Offer to Purchase have not been satisfied or upon the
occurrence of any of the events specified in Section 14 of the Offer to Purchase
and (3) waive any condition or otherwise amend the Offer in any respect, in each
case by giving oral or written notice of such delay, termination, waiver or
amendment to the Depository and by making a public announcement thereof.
The information required to be disclosed by paragraph
(e)(1)(vii) of Rule 14d- 6 under the Exchange Act is contained in the Offer to
Purchase and is incorporated herein by reference.
A request is being made to the Company pursuant to Rule 14d-5
under the Securities Exchange Act of 1934, as amended, and Section 220 of the
DGCL for the use of the Company's stockholder list, its list of holders of
Rights, if any, and security position listings for the purpose of disseminating
the Offer to holders of Shares. Upon compliance by the Company with such
request, the Offer to Purchase, the related Letter of Transmittal and, if
required, other relevant materials will be mailed to record holders of Shares
and Rights and will be furnished to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list and list of holders of Rights, if applicable, or
who are listed as participants in a clearing agency's security position listing
for subsequent transmittal to beneficial owners of Shares and Rights.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
5
<PAGE>
Questions and requests for assistance or for copies of the
Offer to Purchase, the Letter of Transmittal and other tender offer documents
may be directed to the Information Agent, as set forth below, and copies will be
furnished at the Purchaser's expense. No fees or commissions will be payable to
brokers, dealers or other persons other than the Information Agent for
soliciting tenders of Shares and Rights pursuant to the Offer.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
Bankers and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
August 8, 1997
6
<PAGE>
Exhibit (a) (8)
Contact: Charles Garske
Georgeson & Company, Inc.
(212) 440-9916
For Immediate Release
AFFILIATE OF GREENWAY PARTNERS TO BEGIN AN
$18.00 TENDER TOMORROW FOR OUTBOARD MARINE
(New York, NY, August 7, 1997) Greenmarine Acquisition Corp., a wholly-owned
subsidiary of Greenmarine Holdings LLC, announced that it is commencing
tomorrow, August 8, 1997, an all cash tender offer for all outstanding shares of
common stock of Outboard Marine Corporation (NYSE:OM) at $18.00 net per share.
Following completion of the tender offer, Greenmarine Holdings intends to effect
a merger in which all remaining Outboard Marine shareholders will also receive
the same cash price paid in the tender offer.
The investors in Greenmarine Holdings are an entity affiliated with Messrs.
Alfred D. Kingsley and Gary K. Duberstein of Greenway Partners, L.P. and two
entities associated with Soros Fund Management LLC. The investors have agreed to
contribute to Greenmarine at least $241 million in cash and 2,000,000 shares of
Outboard Marine (approximately 9.9% of the outstanding shares). Greenmarine
Holdings has also obtained a commitment from American Financial Group to provide
up to $150 million of the financing to consummate the transaction.
The Greenmarine offer is conditioned upon, among other things, (1) there being
validly tendered and not properly withdrawn prior to the expiration date that
number of shares that, when added to the number of shares beneficially owned by
Greenmarine Acquisition and Greenmarine Holdings, would represent 90% of all
outstanding shares on the date of purchase and, as a result thereof, Greenmarine
being satisfied, in its sole discretion, that on the date of purchase it will be
able to consummate the proposed second-step merger as a "short-form merger"
pursuant to the provisions of Section 253 of the Delaware General Corporation
Law immediately after consummation of the offer, (2) Outboard Marine's preferred
stock purchase rights being redeemed by the Board of Directors of Outboard
Marine or being satisfied, in its sole discretion, that such rights have been
invalidated or are otherwise inapplicable to its offer and the proposed merger,
(3) Greenmarine Acquisition being satisfied, in its sole discretion, that the
proposed merger can be consummated without the need for a supermajority vote of
Outboard Marine's stockholders pursuant to Article Eighteenth of Outboard
Marine's Restated Certificate of Incorporation, (4) Greenmarine
Acquisition shall have received the loan proceeds committed to be provided by
American Financial Group in accordance with the commitment letter issued by
American Financial Group to Greenmarine Acquisition, dated August 7, 1997, (5)
Greenmarine Acquisition being satisfied, in its sole discretion, that, upon
consummation of the offer and the merger, Outboard Marine will not be in default
under any instrument evidencing Outboard Marine's then outstanding indebtedness,
or, if in default, the purchaser and the parent having obtained, prior to the
expiration date, on terms reasonably acceptable to Greenmarine Holdings,
sufficient financing to enable Outboard Marine to refinance or redeem any such
indebtedness upon consummation of the offer and the merger, and (6) Greenmarine
Acquisition being satisfied, in its sole discretion, that the previously
announced Agreement and Plan of Merger between Outboard Marine and Detroit
Diesel Corporation has been terminated in accordance with its terms.
The Greenmarine offer and withdrawal period for the offer will expire at 5:00
p.m., New York City time, on Monday, September 8, 1997, unless extended.
* * *
<PAGE>
[American Financial Group letterhead]
August 7, 1997
Greenmarine Acquisition Corp.
277 Park Avenue
27th Floor
New York, New York 10172
Attention: Alfred Kingsley
Dear Mr. Kingsley:
American Financial Group, Inc. ("Lender") agrees to lend (i) to
Greenmarine Acquisition Corp. ("Borrower"), up to the sum of One Hundred Fifty
Million Dollars ($150,000,000) to be used toward the purchase by Borrower of the
outstanding shares of Outboard Marine Corporation ("OMC") in a tender offer and
for any required repurchase of OMC outstanding debt pursuant to a "put right"
arising as a result of the tender offer and/or the Merger (the "Phase I Loan")
and (ii) to OMC, the surviving corporation of a merger involving Borrower and
OMC (the "Merger"), up to the sum of One Hundred Fifty Million Dollars
($150,000,000) to be used to repay the Phase I Loan, to pay (in the Merger) for
any OMC Shares not acquired in the tender offer and for any required repurchase
of OMC outstanding debt pursuant to a "put right" arising as a result of the
tender offer and/or Merger (the "Phase II Loan"). The loans to be made pursuant
to this commitment will be made upon the following terms and conditions:
1. Amount of Each Loan. Up to a maximum of One Hundred Fifty Million Dollars
($150,000,000). All amounts outstanding under the Phase I Loan shall be
fully repaid prior to or with the proceeds of the Phase II Loan.
2. Purpose of Loan. The proceeds of the Phase I Loan shall be used by Borrower
solely toward the purchase of shares of outstanding common stock of OMC
("OMC Common Stock") pursuant to a tender offer for such shares by Borrower
and for any required repurchase of OMC outstanding debt pursuant to a "put
right" arising as a result of the tender offer and/or the Merger. The
proceeds of the Phase II Loan shall be used to repay the Phase I Loan, to
pay (in the Merger) for any OMC Common Stock not acquired in the tender
offer and for any required repurchase of OMC outstanding debt pursuant to a
"put right" arising as a result of the tender offer and/or Merger.
3. Collateral. As security for the repayment of the Phase I Loan and the
performance of Borrower under the loan documentation to be entered into,
the entity which will own all of the equity of Borrower shall pledge to
Lender the two million shares of OMC Common Stock which it shall
beneficially own ("Initial OM Shares") and Borrower shall pledge to Lender
all shares of OMC Common Stock tendered in the tender offer, the aggregate
value of which at all times will be equal to or greater than twice the
outstanding principal balance of all loans made pursuant to this
commitment. The Phase II Loan shall be secured by a pledge of all of the
shares of capital stock of the surviving corporation of the Merger. In the
event that prior to the Phase II Loan, Borrower makes a loan to OMC to fund
OMC's "put right" purchase obligations with respect to its outstanding
debt, Borrower shall assign its right to receive repayment of such loan to
Lender, as additional collateral securing repayment of the Phase I Loan.
4. Term. The terms of the Phase I Loan shall commence upon the first
disbursement of the Phase I
<PAGE>
Loan proceeds and terminate upon the earlier of the Merger or nine months
after the first disbursement under the Phase I Loan, at which time all
principal and accrued interest shall be due and payable on the Phase I
Loan. The term of the Phase II Loan shall commence upon the Merger and
terminate nine months after the first disbursement under the Phase I Loan,
at which time all principal and accrued interest shall be due and payable
on the Phase II Loan. Lender's obligation to first disburse funds shall
remain open for a period of 90 days following the execution of a
satisfactory loan agreement and related documentation.
5. Interest. Interest shall accrue on the outstanding principal under the
loans at a rate of Ten Percent (10%) per annum. Interest shall be payable
monthly in arrears on the first day of each month during the term of the
loans.
6. Commitment Fee. Upon the execution of this commitment letter by Borrower,
Borrower shall pay Lender, by wire transfer of immediately available funds,
a non-refundable commitment fee of One Million Five Hundred Thousand
Dollars ($1,500,000) (the "Commitment Fee").
7. Funding Fee. Upon each disbursement of loan proceeds other than proceeds of
the Phase II Loan used to repay the Phase I Loan, Borrower shall pay Lender
a funding fee equal to one percent of the amount of proceeds so disbursed.
The maximum funding fee payable to Lender under the loan documents will be
One Million Five Hundred Thousand Dollars ($1,500,00).
8. Certain Costs and Expenses. In addition to the fees set forth in Paragraphs
6 and 7 above, Borrower shall promptly pay all reasonable costs, fees and
expenses incurred by Lender in connection with the loans, including but not
limited to, reasonable attorneys fees, recording and filing fees, and other
expenses incurred in the preparation and review of loan documentation,
whether or not any transaction contemplated hereby is consummated.
9. Expiration Date of Commitment. This commitment shall remain open until
August 11, 1997. If the commitment is not accepted and executed by Borrower
and received by Lender together with the Commitment Fee prior to the
earlier of (a) the public announcement of the tender offer or (b) 5:00 p.m.
August 11, 1997, the commitment shall be immediately withdrawn and be null
and void.
10. Certain Covenants. The Loan documents will contain customary warranties,
representations, indemnities, covenants and conditions for transactions of
this size and nature, including, but not limited to those contained herein.
Prior to the date of disbursement of any loan proceeds, neither Borrower
nor OMC shall have suffered any adverse material change in their financial
condition and shall not be the subject of any bankruptcy, reorganization or
insolvency proceedings. While any portion of the Phase I Loan is
outstanding, Borrower shall not (a) incur any indebtedness other than the
Loan, (b) make a distribution to, or repurchase shares from, its
shareholders, or (c) pay a dividend to its shareholders. While any portion
of the Phase II Loan is outstanding, OMC shall not (a) make a distribution
to, or repurchase shares from, its shareholders other than pursuant to the
Merger, or (b) pay a dividend to its shareholders. While either the Phase I
Loan or the Phase II Loan is outstanding, neither Borrower nor OMC shall
expend in excess of $27.5 million in the aggregate for costs and expenses
in connection with the transactions contemplated hereby, including, but not
limited to, break-up fees, golden parachute payments, and similar expenses
arising in connection with the transactions contemplated hereby, and
attorney fees, brokers' and finders' fees incurred by or on behalf of
Borrower, unless Borrower or OMC shall have received cash equity equal to
any such excess in addition to the cash equity provided for in paragraph
11.
11. Conditions Precedent. Immediately prior to the funding of the Phase I Loan,
Borrower and its parent on a consolidated basis shall have a minimum
shareholders' equity of $265 million, composed of $231 million of cash
equity and $34 million allocable to the Initial OM Shares,
2
<PAGE>
plus additional equity, if necessary, calculated on the basis of the
difference, if any, between the final tender offer price per share and
$17.00, as set forth below. The tender offer shall be funded first with the
cash equity and any additional equity, as provided in clauses (a), (b) and
(c) below, before any portion of the Phase I Loan proceeds are disbursed.
Any increase in the tender offer price in excess of $17.00 per share shall
be partially funded by additional equity contributions to Borrower as
follows:
(a) If the tender offer price is greater than $17 per share, but less than
or equal to $18 per share, an equity contribution amount equal to $10
million multiplied by a fraction, the numerator of which is the number of
cents by which such price exceeds $17 per share, and the denominator of
which is 100;
(b) If the tender offer price is greater than $18 per share, but less than
or equal to $20 per share, an equity contribution amount equal to $10
million, plus $25 million multiplied by a fraction, the numerator of which
is the number of cents by which such price exceeds $18 per share, ann the
denominator of which is 200; and
(c) If the tender offer price is greater than $20 per share, an equity
contribution amount equal to $35 million, plus an amount equal to
$182,055.20 multiplied by the number of cents by which the tender offer
price exceeds $20 per share.
In determining the cash equity of Borrower and its parent on a consolidated
basis, Borrower and its parent shall receive a credit for up to $27.5
million of any fees and expenses paid directly by Borrower or its parent in
connection with the tender offer or the Merger.
12. Indebtedness of OMC. Following the Merger OMC shall not incur any new
indebtedness for borrowed money other than (a) the Phase II Loan, (b)
pursuant to its existing bank credit facility, or a successor bank credit
facility, in an amount up to $150 million and (c) refinancings of other
existing debt on terms no less favorable to OMC taken as a whole than the
indebtedness being replaced or which would shorten the maturity of such
debt to a date prior to the due date of the loans to be made hereunder.
13. Documentation. All Loan documentation shall be prepared by Lender's legal
counsel, and shall be in form and substance satisfactory to Borrower and
its counsel.
14. Assignment. Lender retains the right to assign this transaction, or any
portion thereof, to any of its affiliated companies. The commitment granted
herein shall not be assigned by Borrower.
Upon acceptance of this commitment, the loan documents shall
be prepared and executed as soon as practicable following the execution of this
commitment letter. This letter shall be superseded in its entirety by the terms
and conditions of the loan documents, when such documents are executed.
Very truly yours,
AMERICAN FINANCIAL GROUP, INC.
By: /s/ James E. Evans
----------------------
James E. Evans
Senior Vice President
Accepted this 7th day of August, 1997.
GREENMARINE ACQUISITION CORP.
/s/ Gary K. Duberstein
- --------------------------------
By: Gary K. Duberstein
Its: Vice-President
<PAGE>
================================================================================
OPERATING AGREEMENT
OF
GREENMARINE HOLDINGS LLC
dated as of August 7, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
<S> <C>
ARTICLE 1
DEFINITIONS..................................................................................................... 1
ARTICLE 2
FORMATION AND OFFICES........................................................................................... 10
2.1 Formation............................................................................................ 10
2.2 Principal Office..................................................................................... 10
2.3 Registered Office and Registered Agent............................................................... 10
2.4 Purpose of Company................................................................................... 10
2.5 Date of Dissolution.................................................................................. 11
2.6 Certificate; Qualification........................................................................... 11
ARTICLE 3
CAPITALIZATION OF THE COMPANY................................................................................... 11
3.1 Initial Capital Contributions........................................................................ 11
3.2 Additional Capital Contributions..................................................................... 11
3.3 Loans................................................................................................ 13
3.4 Certain Expenses..................................................................................... 13
3.5 Maintenance of Capital Accounts...................................................................... 14
3.6 Capital Withdrawal Rights, Interest and Priority..................................................... 15
3.7 Preemptive Rights.................................................................................... 15
3.8 Stock Contributors Preferred Return; Cash Contributors Preferred Return.............................. 17
3.9 Right of First Offer................................................................................. 17
ARTICLE 4
DISTRIBUTIONS................................................................................................... 19
4.1 Distributions of Net Cash Flow....................................................................... 19
4.2 Persons Entitled to Distributions.................................................................... 19
4.3 Limitations on Distributions......................................................................... 20
ARTICLE 5
ALLOCATIONS..................................................................................................... 20
5.1 Profits.............................................................................................. 20
5.2 Losses............................................................................................... 20
5.3 Loss Limitation...................................................................................... 20
5.4 Tax Allocations: Code Section 704(c)................................................................ 20
5.5 Change in Percentage Interests....................................................................... 21
5.6 Withholding.......................................................................................... 21
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE 6
MEMBERS' MEETINGS............................................................................................... 22
6.1 Meetings of Members; Place of Meetings............................................................... 22
6.2 Quorum; Voting Requirement........................................................................... 22
6.3 Proxies.............................................................................................. 22
6.4 Action Without Meeting............................................................................... 23
6.5 Notice............................................................................................... 23
6.6 Waiver of Notice..................................................................................... 23
6.7 No Authority......................................................................................... 23
ARTICLE 7
MANAGEMENT AND CONTROL.......................................................................................... 23
7.1 Management Committee................................................................................. 23
7.2 Management Committee Meetings; Authority; Proxies.................................................... 24
7.3 Management Committee's Authority; Certain Limitations................................................ 25
7.4 Officers; Agents..................................................................................... 25
7.5 Resignation of a Management Committee Member......................................................... 26
7.6 Compensation......................................................................................... 26
ARTICLE 8
LIABILITY AND INDEMNIFICATION................................................................................... 26
8.1 Liability of Members................................................................................. 26
8.2 Indemnification...................................................................................... 27
ARTICLE 9
TRANSFERS OF MEMBERSHIP INTERESTS............................................................................... 29
9.1 General Restrictions................................................................................. 29
9.2 Permitted Transferees................................................................................ 29
9.3 Substitute Members................................................................................... 30
9.4 Effect of Admission as a Substitute Member........................................................... 31
9.5 Consent.............................................................................................. 31
9.6 No Dissolution....................................................................................... 31
9.7 Additional Members; Certain Representations of Members............................................... 31
9.8 Right of First Offer................................................................................. 31
9.9 Tag-Along Rights..................................................................................... 33
9.10 Piggyback Registration............................................................................... 35
ARTICLE 10
DISSOLUTION AND TERMINATION..................................................................................... 37
10.1 Events Causing Dissolution........................................................................... 37
10.2 Notices to Secretary of State........................................................................ 37
10.3 Cash Distributions Upon Dissolution.................................................................. 37
10.4 In-Kind.............................................................................................. 38
10.5 No Action for Dissolution............................................................................ 38
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE 11
TAX MATTERS MEMBER.............................................................................................. 39
11.1 Tax Matters Member................................................................................... 39
11.2 Certain Authorizations............................................................................... 39
11.3 Indemnity of Tax Matters Member...................................................................... 40
11.4 Information Furnished................................................................................ 40
11.5 Notice of Proceedings, etc........................................................................... 41
11.6 Notices to Tax Matters Member........................................................................ 41
11.7 Preparation of Tax Returns........................................................................... 41
11.8 Tax Elections........................................................................................ 41
11.9 Taxation as a Partnership............................................................................ 41
ARTICLE 12
ACCOUNTING AND BANK ACCOUNTS.................................................................................... 42
12.1 Fiscal Year and Accounting Method.................................................................... 42
12.2 Books and Records.................................................................................... 42
12.3 Delivery to Members; Inspection...................................................................... 42
12.4 Financial Statements................................................................................. 43
12.5 Filings.............................................................................................. 43
12.6 Non-Disclosure....................................................................................... 43
12.7 Bank Accounts........................................................................................ 44
ARTICLE 13
MISCELLANEOUS................................................................................................... 44
13.1 Title to Property.................................................................................... 44
13.2 Waiver of Default.................................................................................... 44
13.3 Amendment............................................................................................ 45
13.4 No Third Party Rights................................................................................ 45
13.5 Severability......................................................................................... 45
13.6 Nature of Interest in the Company.................................................................... 45
13.7 Binding Agreement.................................................................................... 46
13.8 Headings............................................................................................. 46
13.9 Word Meanings........................................................................................ 46
13.10 Counterparts......................................................................................... 46
13.11 Entire Agreement..................................................................................... 46
13.12 Partition............................................................................................ 46
13.13 Governing Law; Consent to Jurisdiction and Venue..................................................... 46
13.14 Discretion........................................................................................... 47
SCHEDULE 1 ..................................................................................................... 49
SCHEDULE 7.5.................................................................................................... 51
</TABLE>
iii
<PAGE>
OPERATING AGREEMENT
OF
GREENMARINE HOLDINGS LLC
THIS OPERATING AGREEMENT (this "Agreement") of GREENMARINE HOLDINGS LLC
(the "Company"), is made and entered into as of the 7th day of August, 1997 by
and among the Persons executing this Agreement on the signature pages hereto as
a member (together with such other Persons that may hereafter become members as
provided herein, referred to collectively as the "Members" or, individually, as
a "Member").
WHEREAS, the Members have caused Greenmarine Holdings LLC to be formed on
August 4, 1997 as a limited liability company under the Delaware Limited
Liability Company Act by causing a certificate of formation of the Company to be
filed with the Delaware Secretary of State and, as required thereunder, do
hereby adopt this Agreement as the limited liability company agreement of the
Company pursuant to Section 18-201(d) of the Act effective as of the date
hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties agree as follows:
ARTICLE 2
DEFINITIONS
As used herein, the following terms shall have the following meanings,
unless the context otherwise requires:
"Act" means the Delaware Limited Liability Company Act, 6 Del. L. Section
18-101, et seq., as amended from time to time.
"Acquisition" shall have the meaning set forth in Section 2.4.
"Adjusted Capital Account Deficit" means, with respect to a Member, the
deficit balance, if any, in such Member's Capital Account as of the end of the
relevant Taxable Year, after giving effect to the following adjustments:
(a) Credit to such Capital Account any amounts which such
Member is obligated to restore pursuant to any provision of this
Agreement or is deemed to be obligated to restore pursuant to the
penultimate sentences of
<PAGE>
Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(b) Debit to such Capital Account the items described in
Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Regulation Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.
"Affiliate" of a specified Person means any Person (a) who directly or
indirectly controls, is controlled by, or is under common control with, such
Person or (b) who has any relationship with such Person by blood, marriage or
adoption, not more remote than first cousin. With respect to the Group A
Members, the term Affiliate shall include one or more of George Soros or Soros
Fund Management LLC or Affiliates thereof, and any Person for which any such
Person acts as investment advisor or investment manager. With respect to the
Group B Members, the term Affiliate shall include one or more of Alfred D.
Kingsley or Gary K. Duberstein or Affiliates thereof, and any Person for which
any such Person acts as investment advisor or investment manager.
"Agreement" means this Operating Agreement, which shall constitute the
limited liability company agreement of the Company for purposes of the Act, as
amended from time to time.
"Business" shall have the meaning set forth in Section 3.9(a).
"Business Day" means any day (other than a day which is a Saturday,
Sunday or legal holiday in the state of New York) on which banks are open for
business in New York City.
"Capital Account" means, with respect to any Member, a separate account
established by the Company and maintained for each Member in accordance with
Section 3.5 hereof.
"Capital Contribution" means, with respect to any Member, the amount of
money and the initial Gross Asset Value of any Property (other than money)
contributed to the Company with respect to the interests purchased by such
Member pursuant to the terms of this Agreement, in return for which the Member
contributing such capital shall receive a Membership Interest.
"Cash Contributors" shall mean those Members contributing cash as their
initial
2
<PAGE>
Capital Contributions as reflected on Schedule 1 hereto.
"Cash Contributors Preferred Return" shall have the meaning set forth in
Section 3.8(b).
"Certificate" means the Certificate of Formation of the Company filed
with the Secretary of State of Delaware, as amended or restated from time to
time.
"Code" means the United States Internal Revenue Code of 1986, as amended.
"Company" means Greenmarine Holdings LLC.
"Company Affiliate" shall have the meaning set forth in Section 8.2.
"Depreciation" means, for each Taxable Year or other period, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such Taxable Year, except that if the
Gross Asset Value of an asset differs from its adjusted basis for federal income
tax purposes at the beginning of such Taxable Year, Depreciation shall be an
amount which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such Taxable Year bears to such beginning adjusted tax basis; provided,
however, that if the adjusted basis for federal income tax purposes of an asset
at the beginning of such Taxable Year is zero, Depreciation shall be determined
with reference to such beginning Gross Asset Value using any reasonable method
selected by the Management Committee.
"Disposition" shall have the meaning set forth in Section 3.9(a).
"Disposition Notice" shall have the meaning set forth in Section 3.9(a).
"GAC" shall mean Greenmarine Acquisition Corp., a Delaware corporation.
"Gross Asset Value" means with respect to any asset, the asset's adjusted
basis for federal income tax purposes, except as follows and as otherwise
provided in clause (ii) of Section 3.2(b):
(a) The initial Gross Asset Value of any asset contributed by
a Member to the Company shall be the gross fair market value of such
asset, as reasonably determined by the Management Committee; provided,
however, that the initial Gross Asset Values of the assets contributed to
the Company pursuant to Section 3.1 hereof shall be as set forth in such
section or the schedule referred to therein;
3
<PAGE>
(b) The Gross Asset Values of all Company assets shall be
adjusted to equal their respective gross fair market values (taking Code
Section 7701(g) into account), as reasonably determined by the Management
Committee as of the following times: (i) the acquisition of an additional
interest in the Company by any new or existing Member in exchange for
more than a de minimis Capital Contribution; (ii) the distribution by the
Company to a Member of more than a de minimis amount of Company property
as consideration for an interest in the Company; and (iii) the
liquidation of the Company within the meaning of Regulation Section
1.704-1(b)(2)(ii)(g); provided, however, that an adjustment described in
clauses (i) and (ii) of this paragraph shall be made only if the
Management Committee reasonably determines that such adjustment is
necessary to reflect the relative economic interests of the Members in
the Company; and
(c) The Gross Asset Value of any item of Company assets
distributed to any Member shall be adjusted to equal the gross fair
market value (taking Code Section 7701(g) into account) of such asset on
the date of distribution as reasonably determined by the Management
Committee.
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
subparagraph (b), such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset, for purposes of
computing Profits and Losses.
"Group A Members" means the Persons listed on Schedule 1 as Group A
members and their respective permitted successors or assigns.
"Group B Members" means, the Persons listed on Schedule 1 as Group B
members and their respective permitted successors or assigns.
"Initial Capital Contribution Date" means the earlier to occur of (i) one
day prior to the date on which any subsidiary of the Company is required to
accept shares of OMC Stock for payment pursuant to a tender offer commenced by
such subsidiary for shares of OMC Stock under the Securities Exchange Act of
1934, as amended, or (ii) such date as may be determined by the Management
Committee upon not less than three Business Days' notice to the Members of such
date.
"Initial Tag-Along Notice" shall have the meaning set forth in Section
9.9(a).
4
<PAGE>
"Losses" has the meaning set forth in the definition of "Profits" and
"Losses".
"Majority in Interest" means, with respect to the Members or to any
specified group or class of Members, Members owning more than fifty percent
(50%) of the total Percentage Interests held by all Members or such specified
group or class of Members, as applicable.
"Management Committee" means the management committee of the Company
established pursuant to Section 7.1.
"Managers" means, collectively, the Persons designated and serving in
accordance with Article 7 as members of the Management Committee.
"Member" or "Members" shall have the meaning set forth in the preamble
hereof.
"Membership Interest" means a Member's limited liability company interest
in the Company which refers to all of a Member's rights and interests in the
Company in such Member's capacity as a Member, all as provided in this Agreement
and the Act.
"Net Cash Flow" shall mean the gross cash proceeds from the Company's
operations and any distributions received from its subsidiaries (excluding the
proceeds of Company borrowings and capital contributions) and from all sales and
other dispositions of the Company's Property and any amount released by the
Management Committee from Reserves, less the portion of gross proceeds (other
than the proceeds of the Company's borrowings and capital contributions) used to
pay or establish Reserves for all the Company's expenses, debt payments
(including principal, interest and required redemption payments), capital
improvements, replacements and contingencies, all as reasonably determined by
the Management Committee. Net Cash Flow shall not be reduced by Depreciation or
similar allowances (but shall be reduced by the Stock Contributors Preferred
Return and the Cash Contributors Preferred Return, if any, as accrued pursuant
to Section 3.8 unless Section 3.8(d) shall be applicable) and shall include the
net cash proceeds of all principal and interest payments actually received by
the Company with respect to any promissory note or other deferred payment
obligation held by the Company in connection with sales and other dispositions
of the Company's Property.
"Notice" means a writing, containing the information required by this
Agreement to be communicated to a party, and shall be deemed to have been
received (a) when personally delivered or sent by telecopy, (b) one day
following delivery by overnight delivery courier, with all delivery charges
pre-paid, or (c) on the third Business Day following the date on which it was
sent by United States mail, postage prepaid, to such party at the address or fax
number, as the case may be, of such
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party as shown on the records of the Company.
"Notice of Acceptance" shall have the meaning set forth in Section
3.9(a).
"OMC" shall mean Outboard Marine Corp., a Delaware corporation.
"OMC Stock" shall mean shares of common stock par value $.15 per share of
OMC.
"Percentage Interest" of a Member means the aggregate limited liability
company percentage interest set forth on Schedule 1 hereto, as the same may be
modified from time to time as provided herein.
"Permitted Transferee" shall have the meaning set forth in Section 9.2.
"Person" means any individual, partnership, limited liability company,
corporation, cooperative, trust, estate or other entity.
"Profits" and "Losses" means, for each Taxable Year, an amount equal to
the Company's taxable income or loss for a taxable year, determined in
accordance with Section 703(a) of the Code (for this purpose, all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code shall be included in taxable income or loss), with
the following adjustments:
(a) Any income of the Company that is exempt from federal
income tax and not otherwise taken into account in computing Profits or
Losses shall be added to such taxable income or loss;
(b) Any expenditures of the Company described in Section
705(a)(2)(B) of the Code or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulation Section 1.704-1(b)(2)(iv)(i), and not
otherwise taken into account in computing Profits or Losses, shall be
subtracted from such taxable income or loss;
(c) In the event the Gross Asset Value of any Company asset
is adjusted pursuant to subparagraphs (b) or (c) of the definition of
Gross Asset Value, the amount of such adjustment shall be treated as
an item of gain (if the adjustment increases the Gross Asset Value of
the asset) or an item of loss (if the adjustment decreases the Gross
Asset Value of the asset) from the disposition of such asset and shall
be taken into account for purposes of computing Profits or Losses;
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(d) Gain or loss resulting from any disposition of Property
with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of the
Property disposed of, notwithstanding that the adjusted tax basis of such
Property differs from its Gross Asset Value;
(e) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income
or loss, there shall be taken into account Depreciation for such Taxable
Year, computed in accordance with the definition of Depreciation; and
(f) To the extent an adjustment to the adjusted tax basis of
any Company asset pursuant to Code Section 734(b) or Code Section 743(b)
is required, pursuant to Regulation Sections 1.704-(b)(2)(iv)(m)(4) to be
taken into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Member's interest in the
Company, the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis) from the disposition of such asset and
shall be taken into account for purposes of computing Profits or Losses.
"Property" means all assets, real or intangible, that the Company may own
or otherwise have an interest in from time to time.
"Purchasing Group B Members" shall have the meaning set forth in Section
3.9(a).
"Regulations" means the regulations, including temporary regulations,
promulgated by the United States Department of Treasury with respect to the
Code, as such regulations are amended from time to time, or corresponding
provisions of future regulations.
"Regulatory Allocations" shall have the meaning set forth in Section 5.4.
"Reserves" means the cash reserves established by the Management
Committee to provide for working capital, future investments, debt service and
such other purposes as may be deemed reasonably necessary or advisable by the
Management Committee.
"SEC" means the Securities and Exchange Commission.
"Secretary" shall mean the Secretary of the Treasury or his/her delegate
or the Internal Revenue Service.
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"Securities Act" shall mean the Securities Act of 1933, as amended.
"Section 9.8 Offeree" shall have the meaning set forth in Section 9.8(a).
"Section 9.8 Proposed Purchaser" shall have the meaning set forth in
Section 9.8(a).
"Section 9.8 Selling Member" shall have the meaning set forth in Section
9.8(a).
"Section 9.9 Participating Tagged Members" shall have the meaning set
forth in Section 9.9(a).
"Section 9.9 Proposed Purchaser" shall have the meaning set forth in
Section 9.9(a).
"Section 9.9 Tag-Along Membership Interest" shall have the meaning set
forth in Section 9.9(a).
"Section 9.9 Tagged Members" shall have the meaning set forth in Section
9.9(a).
"Stock Contributors" shall mean those Members contributing OMC Stock as
their initial Capital Contributions as reflected on Schedule 1 hereto.
"Stock Contributors Preferred Return" shall have the meaning set forth in
Section 3.8(b).
"Tag-Along Right" shall have the meaning set forth in Section 9.9(a).
"Tag-Along Notice" shall have the meaning set forth in Section 9.9(a).
"Taxable Year" shall mean the taxable year of the Company in accordance
with the provisions of Section 706 of the Code.
"Tax Distribution" means an amount equal to the taxable income of the
Company allocated to the Members for a Taxable Year multiplied by the sum of (x)
the highest federal income tax rate applicable to individuals for such Taxable
Year and (y) the highest (net of the federal income tax deduction therefor)
combined New York State and New York City income tax rate applicable to
individuals for such Taxable Year. Cash Distributions in respect of the Tax
Distribution shall be made quarterly as provided in
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Section 4.1 hereof, based on a reasonable estimate of the amount of Tax
Distribution for such Taxable Year. The amount of Tax Distribution shall be
computed by the Company's regular independent public accounting firm.
"Tax Matters Member" shall have the meaning set forth in Article 11.
"Transfer" or "Transferred" means (a) when used as a verb, to give, sell,
exchange, assign, transfer, pledge, hypothecate, bequeath, devise or otherwise
dispose of or encumber, and (b) when used as a noun, the nouns corresponding to
such verbs, in either case voluntarily or involuntarily, by operation of law or
otherwise. When referring to a Membership Interest, "Transfer" shall mean the
Transfer of such Membership Interest whether of record, beneficially, by
participation or otherwise.
ARTICLE 3
FORMATION AND OFFICES
3.1 Formation. Pursuant to the Act, the Members have formed a Delaware
limited liability company effective upon the filing of the Certificate of the
Company with the Secretary of State of Delaware. To the extent that the rights
or obligations of any Member are different by reason of any provision of this
Agreement than they would be in the absence of such provision, to the extent
permitted by the Act, this Agreement shall control.
3.2 Principal Office. The principal office of the Company shall be located
at 277 Park Avenue, New York, New York 10172 or at such other place(s) as the
Management Committee may determine from time to time.
3.3 Registered Office and Registered Agent. The location of the registered
office and the name of the registered agent of the Company in the State of
Delaware shall be as stated in the Certificate, as determined from time to time
by the Management Committee.
3.4 Purpose of Company. The Company's purposes, and the nature of the
business to be conducted and promoted by the Company are, (a) to form GAC and to
acquire all of the outstanding capital stock of GAC (b) to seek to cause GAC to
acquire OMC Stock pursuant to a tender offer and, thereafter, to merge with and
into OMC following which the Company shall own all of the issued and outstanding
shares of OMC (the "Acquisition"), (c) to engage in any other lawful act or
activity for which limited liability companies may be formed under the Act;
provided, however, that the Company shall not engage in any business that would
cause the Company to be engaged in a trade or business in the United States (it
being understood that neither the Company, nor any
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Manager or Member shall have any liability to any Member if, for any reason, the
Company is determined to have engaged in a trade or business in the United
States), and (d) to engage in any and all activities necessary, advisable,
convenient or incidental to the foregoing.
3.5 Date of Dissolution. The term of the Company shall continue until the
close of business on August 1, 2032 or until the earlier dissolution under
Article 10 hereof. The existence of the Company as a separate legal entity shall
continue until cancellation of the Certificate in the manner required by the
Act.
3.6 Certificate; Qualification. The execution, delivery and filing of the
Certificate by Gary K. Duberstein, in his capacity as an authorized person,
within the meaning of the Act, is hereby ratified, approved and confirmed in all
respects. The President and Chief Executive Officer, any Vice President, the
Secretary and any Assistant Secretary of the Company is hereby authorized to
qualify the Company to do business as a foreign limited liability company in any
state or territory in the United States in which the Company may wish to conduct
business and each is hereby designated as an authorized person, within the
meaning of the Act, to execute, deliver and file any amendments or restatements
of the Certificate and any other certificates and any amendments or restatements
thereof necessary for the Company to so qualify to do business in any such state
or territory.
ARTICLE 4
CAPITALIZATION OF THE COMPANY
4.1 Initial Capital Contributions. On the Initial Capital Contribution
Date, each Member shall make Capital Contributions to the capital of the Company
consisting of cash and/or OMC Stock as specified and as set forth opposite such
Member's name on Schedule 1 hereto. For purposes hereof, the Gross Asset Value
of shares of OMC Stock shall be $18.00 per share. The amount of Cash Capital
Contributions, and the Gross Asset Value of any OMC Stock to be contributed as
Capital Contributions, and the Percentage Interest of each Member following such
Capital Contributions on the Initial Capital Contribution Date, is likewise set
forth on Schedule 1.
4.2 Additional Capital Contributions.
(a) Except as otherwise expressly provided in this Agreement, no Member
shall be required to make any additional Capital Contribution. No Member shall
be permitted to make any additional Capital Contribution without the approval of
the Management Committee.
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(b) Subject to the rights of each Member to purchase its proportionate
share of additional Membership Interests issued by the Company in accordance
with Section 3.7, the Company may offer additional Membership Interests to:
(i) any person that is not an Affiliate of a Member with the
approval of the Management Committee; or
(ii) any person that is a Member or is an Affiliate of a
Member with the approval of (A) the Management Committee, (B) a Majority in
Interest of the Group A Members and (C) a Majority in Interest of the Group B
Members, it being expressly understood that such approval of the Members shall
also include their approval of any related valuations of Gross Asset Value by
the Management Committee and, if such Members approve the Transfer without
approving said valuation, Gross Asset Value shall be determined by a third
Person familiar with the valuation of such transactions selected jointly by a
Majority in Interest of the Group A Members and a Majority in Interest of the
Group B Members not later than ten (10) days after their approval of the
Transfer or, if the Members fail to so select a third Person, then such third
Person will be selected in accordance with the rules and procedures of the
American Arbitration Association in New York, New York.
If any additional Capital Contributions are made by Members
but not in proportion to their respective Percentage Interests, the Percentage
Interest of each Member shall be adjusted such that each Member's revised
Percentage Interest determined immediately following the additional Capital
Contributions shall be equal to a fraction (1) the numerator of which is the sum
of (a) the positive Capital Account balance of the Member determined immediately
preceding the date the additional Capital Contribution is made (such Capital
Account to be computed by adjusting the book value for Capital Account purposes
of each Company asset to equal its Gross Asset Value as of such date, as
provided in subparagraph (b) of the definition herein of "Gross Asset Value"),
and (b) the additional Capital Contribution, if any, made by such Member, and
(2) the denominator of which is the sum of the positive Capital Account balances
and additional Capital Contributions of all Members, including any new Members
(in each case calculated as provided in Section 3.2(b)(ii)(1)). The names,
addresses and Capital Contributions of the Members shall be reflected in the
books and records of the Company.
4.3 Loans. (a) No Member shall be obligated to loan funds to the Company.
Loans by a Member to the Company shall not be considered Capital Contributions.
The amount of any such purchases shall be a debt of the Company owed to such
Member in accordance with the terms and conditions upon which such purchases are
made.
(b) A Member may (but shall not be obligated to) guarantee a loan made to
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the Company. If a Member guarantees a loan made to the Company and is required
to make payment pursuant to such guarantee to the maker of the loan, then the
amounts so paid to the maker of the loan shall be treated as a loan by such
Member to the Company and not as an additional capital contribution.
4.4 Certain Expenses. (a) Subject to Section 3.8, in the event that the
Acquisition is not consummated, each of the Members shall pay or reimburse the
Company for its pro rata share (based on Percentage Interests) of the following
fees, costs and expenses (including, but not limited to, those fees, costs and
expenses incurred by the Members): costs and expenses incurred in connection
with the formation of the Company and GAC; fees, costs and expenses incurred in
connection with obtaining financing in connection with the proposed Acquisition
including any bank or other commitment fees or finder's fees relating thereto;
fees, costs and expenses incurred in connection with the preparation of
documentation relating to the proposed acquisition, including any tender offer
documentation and filings with the Securities and Exchange Commission; any
printing expenses; any fees and disbursements of attorneys, accountants and
other advisors; any indemnity obligations of the Company under Section 8.2 or
elsewhere hereunder and any fees, costs or expenses related thereto.
(b) The Management Committee shall provide notice to the Members of the
amount, from time to time, the amounts paid or reimbursed by the Members
pursuant to Section 3.4(a) and cash such Members should pay its pro rata share
of such amounts within five (5) Business Days of the date of the Company's
Notice therefor.
4.5 Maintenance of Capital Accounts.
(a) The Company shall maintain for each Member, a separate Capital Account
with respect to the Membership Interest owned by such Member in accordance with
the following provisions:
(i) To each Member's Capital Account there shall be credited
(A) such Member's Capital Contributions, (B) such Member's distributive
share of Profits and (C) the amount of any Company liabilities assumed by
such Member or which are secured by any Property distributed to such
Member. The principal amount of a promissory note which is not readily
traded on an established securities market and which is contributed to the
Company by the maker of the note (or a Member related to the maker of the
note within the meaning of Regulation Section 1.704-1(b)(2)(ii)(c)) shall
not be included in the Capital Account of any Member until the Company
makes a taxable disposition of the note or until (and only to the extent)
principal payments are made on the note, all in accordance with Regulation
Section 1.704-1(b)(2)(iv)(d)(2);
(ii)To each Member's Capital Account there shall be debited
(A) the
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amount of money and the Gross Asset Value of any Property distributed or
treated as an advance distribution to such Member pursuant to any provision
of this Agreement (including without limitation any distributions pursuant
to Section 4.1(a)), (B) such Member's distributive share of Losses and (C)
the amount of any liabilities of such Member assumed by the Company or
which are secured by any Property contributed by such Member to the
Company;
(iii) In the event Membership Interests are Transferred in
accordance with the terms of this Agreement, the transferee shall succeed
to the Capital Account of the transferor to the extent it relates to the
Transferred Membership Interests; and
(iv) In determining the amount of any liability for purposes
of Sections 3.5(a)(i) and 3.5(a)(ii) there shall be taken into account Code
Section 752(c) and any other applicable provisions of the Code and
Regulations.
(b) The foregoing Section 3.5(a) and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulation Section 1.704-1(b) and, to the greatest extent practicable, shall be
interpreted and applied in a manner consistent with such Regulation. The
Management Committee in its discretion and to the extent otherwise consistent
with this Agreement shall (i) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the Members and
the amount of capital reflected on the Company's balance sheet, as computed for
book purposes, in accordance with Regulation Section 1.704-1(b)(2)(iv)(q), and
(ii) make any appropriate modifications in the event unanticipated events might
otherwise cause this Agreement not to comply with Regulation Section 1.704-1(b).
4.6 Capital Withdrawal Rights, Interest and Priority. Except as expressly
provided in this Agreement, no Member shall be entitled (a) to withdraw or
reduce such Member's Capital Contribution or to receive any distributions from
the Company, or (b) to receive or be credited with any interest on the balance
of such Member's Capital Contribution at any time.
4.7 Preemptive Rights. Subject to Section 3.2, if the Company elects to
offer and sell Membership Interests other than the Membership Interests set
forth on Schedule 1, such additional Membership Interests shall be in the form
of Membership Interests having such Percentage Interest, designations and such
rights and provisions, including, but not limited to, provisions relating to
distributions and allocations of Profits and Losses, as shall be reasonably
determined by the Management Committee to be in the best interest of the
Company; provided, however, that the Company may not offer and sell any
Membership Interests having preferences to the rights of Group A Members or
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the Group B Members with respect to distributions, allocations or rights upon
liquidation, without the prior written consent of a Majority in Interest of the
Group A Members, and a Majority in Interest of the Group B Members (it being
understood that no such consent shall be required for the offering or sale of
Membership Interests that are entitled to distributions, allocations and rights
upon liquidation that are pari passu to the rights of the Group A Members and
the Group B Members). Prior to the consummation of any sale of additional
Membership Interests, the Company shall offer the additional Membership
Interests to the Members, on the terms and conditions set forth below:
(a) The Company shall give Notice to each Member, setting
forth the price, terms and conditions of the proposed sale of the
additional Membership Interests.
(b) Each Member shall have the option to acquire all or a
portion of such Member's pro rata portion (which shall be in proportion to
the Percentage Interest of all the Members) at the time of the offering of
the additional Membership Interests proposed to be sold, on the same terms
and conditions as are set forth in the Notice. The option of Members to
purchase all or a portion of their pro rata portions of the additional
Membership Interests shall be exercised by delivery of a Notice to the
Company of exercise within thirty (30) days following receipt of the
Company's Notice of the price, terms and conditions of the sale of the
additional Membership Interests. If any Member fails or declines to
purchase all or a portion of such Member's pro rata portion of the
additional Membership Interests, then such Member's remaining portion of
the additional Membership Interests shall be offered to the Members who
have exercised their options to purchase their pro rata portions. This
procedure shall continue until such time as all the Membership Interests
offered hereby have been purchased by such Members or until no such Member
desires to purchase any additional Membership Interests hereunder. Each
such Member shall have the right to offer to acquire such additional
Membership Interests by delivering to the Company such Member's Notice of
such offer within ten (10) days following receipt of the Company's Notice
that additional portions are available. If less than all the Membership
Interests to be sold by the Company are purchased by the Members, the
Company may within one hundred twenty (120) days from the initial Notice
sell such Membership Interests as shall not have been purchased by the
Members upon terms and conditions no less favorable to the Company than
those set forth in the Notice.
(c) The sale of additional Membership Interests to Members who
exercise their options to purchase additional Membership Interests shall
occur on the date set forth in a Notice from the Company to such Members,
which date shall not be earlier than thirty (30) days after the date of
expiration of the last such offer to expire under Section 3.7(b).
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4.8 Stock Contributors Preferred Return; Cash Contributors Preferred
Return. In the event that the Acquisition is not consummated and the Company
sells shares of OMC Stock contributed by the Stock Contributors that exceeds
$16.00 per share or the Company receives cash or other consideration of or such
shares as the result of a merger or other business combination of OMC that
exceeds $16.00 per share, the aggregate amount of such excess price or
consideration shall be applied as follows:
(a) first, to the payment of the expenses referred to in
Section 3.4, and
(b) the balance, if any, shall be distributed as follows: (i)
80% to the Stock Contributors on a pro rata basis based upon the respective
shares of OMC Stock contributed by them as initial Cash Contributions (the
"Stock Contributors Preferred Return") and (ii) 20% to the Cash
Contributors on a pro rata basis based upon the respective amounts of cash
contributed by them as initial Cash Contributions (the "Cash Contributors
Preferred Return").
(c) Anything to the contrary herein notwithstanding, the Stock
Contributors Preferred Return and the Cash Contributors Preferred Return
shall be paid or distributed to such members, as applicable, on a priority
basis prior to the making of any other distribution or allocation hereunder
to Members.
4.9 Right of First Offer on Sale of the Business.
(a) If (i) the Management Committee proposes to sell all or substantially
all of the business and operations of the Company (the "Business") to any Person
by means of merger, sale of assets or otherwise (a "Disposition"), other than
pursuant to a sale of outstanding Membership Interests (as to which the
provisions of Article 9 shall be applicable) and (ii) a Majority in Interest of
the Group B Members shall not have consented in writing to such Disposition,
then the Management Committee shall provide Notice of the proposed Disposition
to the Group B Members setting forth in reasonable detail the price, terms and
conditions of the proposed Disposition (the "Disposition Notice"). In the event
that the consideration proposed to be received by the Company in the Disposition
consists all or in part of securities, the Disposition Notice shall specify a
cash price that reflects the value, as determined in the reasonable discretion
of the Management Committee, of such securities (the "Cash Alternative Price").
One or more of the Group B Members (the "Purchasing Group B Members") shall have
the option, exercisable by a Notice to the Company delivered within thirty (30)
days after the date of the Disposition Notice and signed by a Majority in
Interest of the Group B Members (the "Notice of Acceptance"), to elect to
acquire the Business on the price, terms and conditions set forth in the
Disposition Notice. The Notice of Acceptance shall indicate
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the (A) identity of the Purchasing Group B Members, (B) state their acceptance
of the price, the terms and conditions of the proposed Disposition, (C) in the
event that the Disposition involves the proposed receipt of securities by the
Company, whether the Purchasing Group B Members will pay the Cash Alternative
Price in respect thereof or will arrange for the delivery of securities which
have equivalent value, and (D) may provide that consummation of the proposed
Disposition is conditioned upon the Purchasing Group B Members obtaining
financing therefor; provided, however, that if such consummation is conditioned
upon obtaining financing therefor, the Notice of Acceptance shall be accompanied
by commitments from recognized financial institutions evidencing their
commitment to provide any financing required to consummate the proposed
Disposition, which commitments shall be customary in form and substance and,
provided further, in the event that the Management Committee shall determine, in
its reasonable discretion, that any securities proposed to be delivered by the
Purchasing Group B Members do not have equivalent value to the securities
proposed to be received in the Disposition, it shall provide Notice thereof to
the Purchasing Group B Members and they shall have five (5) Business Days to
elect by Notice to the Company whether to pay the Cash Alternative Price in lieu
of delivering such securities or not to proceed with the transaction (it being
understood that failure to provide any such Notice within such five (5) Business
Days shall be deemed to be an election not to proceed). If the Purchasing Class
B Members fail or for any reason (other than a default or breach by the Company)
are unable to consummate the proposed Disposition within sixty (60) days from
the date of the Disposition Notice in accordance with Section 3.9(b), the
Company may effect a Disposition to any Person upon terms and conditions no less
favorable to the Company than those set forth in the Disposition Notice during a
period of 180 days after the expiration of such 60-day period. Thereafter, any
Disposition will again be subject to the rights of the Group B Members under the
provisions of this Section 3.9(a).
(b) The sale of the Business to the Purchasing Group B Members pursuant to
this Section 3.9 shall occur at the office of the Company on a Business Day
specified by not less than five (5) Business Days' prior Notice from the
Purchasing Group B Members to the Company, which Business Day shall not be later
than sixty (60) days after the date of the Disposition Notice. At the closing,
the Purchasing Group B Members shall deliver the consideration payable pursuant
to the Disposition Notice (or Cash Alternative Price, if applicable) in the form
and amount specified therein against the simultaneous delivery of instruments of
assignment in form and substance reasonably satisfactory to the Purchasing Group
B Members, evidencing the sale of the Business contemplated by the Disposition
Notice.
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ARTICLE 5
DISTRIBUTIONS
5.1 Distributions of Net Cash Flow. Except as otherwise provided in Section
3.8, distributions of Net Cash Flow to the Members shall be made as follows:
(a) quarterly, to the Group A Members and Group B Members in
proportion to and to the extent of their relative Percentage Interests, an
amount not in excess of the Tax Distribution for the Taxable Year;
provided, however, that distributions under this Section 4.1(a) shall be
treated as advance distributions under Section 4.1(b), with the result that
distributions otherwise made under Section 4.1(b) to such Member shall be
reduced by the amount of advances made pursuant to this Section 4.1(a));
and
(b) upon the approval of and in the amount so approved by the
Management Committee acting in its sole discretion, to the Group A Members
and Group B Members in proportion to their relative Percentage Interests.
5.2 Persons Entitled to Distributions. All distributions of Net Cash Flow
to the Members under this Article 4 shall be made to the Persons shown on the
records of the Company to be entitled thereto as of the last day of the fiscal
period prior to the time for which such distribution is to be made, unless the
transferor and transferee of any Membership Interest otherwise agree in writing
to a different distribution and such distribution is consented to in writing by
the Management Committee.
5.3 Limitations on Distributions. Notwithstanding anything to the contrary
herein provided, no distribution hereunder shall be permitted to the extent
prohibited by Section 18-607 of the Act.
ARTICLE 6
ALLOCATIONS
6.1 Profits. Profits for any Taxable Year shall be allocated to the Group A
Members and Group B Members first to reimburse them to the extent of any prior
Losses so as to bring each Member's Capital Account to zero, pro rata in
accordance with the sum of each Member's Losses, and then in proportion to their
Percentage Interests; provided, however, in the event that the Acquisition is
not consummated and there is a Stock Contributors Preferred Return and a Cash
Contributors Preferred Return distributable pursuant to Section 3.8, allocations
of Profits shall be made in accordance with such distributions.
6.2 Losses. Subject to the limitation in Section 5.4 hereof and subject to
Section 5.6 hereof, Losses for any Taxable Year shall be allocated to the Group
A Members and Group B Members in proportion to their Percentage Interests.
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6.3 Loss Limitation. Losses allocated pursuant to Section 5.2 hereof shall
not exceed the maximum amount of Losses that can be allocated without causing
any Member to have an Adjusted Capital Account Deficit at the end of any Taxable
Year. In the event some but not all the Members would have Adjusted Capital
Account Deficits as a consequence of an allocation of Losses pursuant to Section
5.2 hereof, the limitation set forth in this Section 5.4 shall be applied on a
Member by Member basis and Losses not allocable to any Member as a result of
such limitation shall be allocated to the other Members pro rata in accordance
with the positive balances in such Members' Capital Accounts so as to allocate
the maximum permissible Losses to each Member under Section 1.704-1(b)(2)(ii)(d)
of the Regulations.
6.4 Tax Allocations: Code Section 704(c).
(a) In accordance with Code Section 704(c) and the Regulations thereunder,
income, gain, loss and deduction with respect to any Property contributed to the
capital of the Company shall, solely for tax purposes, be allocated among the
Members so as to take account of any variation between the adjusted basis of
such Property to the Company for federal income tax purposes and its initial
Gross Asset Value (computed in accordance with the definition of Gross Asset
Value).
(b) In the event the Gross Asset Value of any Company asset is adjusted
pursuant to subparagraph (b) of the definition of Gross Asset Value, subsequent
allocations of income, gain, loss and deduction with respect to such asset shall
take account of any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the same manner as
under Code Section 704(c) and the Regulations thereunder.
(c) Any elections or other decisions relating to such allocations shall be
made by the Management Committee in any manner that reasonably reflects the
purpose and intention of this Agreement; provided, that the Company, in the
discretion of the Management Committee, may make, or not make, "curative" or
"remedial" allocations (within the meaning of the Regulations under Code Section
704(c)) including, but not limited to, "curative" allocations which offset the
effect of the "ceiling rule" for a prior Taxable Year (within the meaning of
Regulation Section 1.704-3(c)(3)(ii) and "curative" allocations from disposition
of contributed property (within the meaning of Regulation Section
1.704-3(c)(3)(iii)(B). Allocations pursuant to this Section 5.6 are solely for
purposes of federal, state, and local taxes and shall not affect, or in any way
be taken into account in computing, any Member's Capital Account or share of
Profits, Losses, other items, or distributions (other than Tax Distributions)
pursuant to any provision of this Agreement.
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6.5 Change in Percentage Interests. In the event that the Members'
Percentage Interests change during a Taxable Year, Profits and Losses shall be
allocated taking into account the Members' varying Percentage Interests for such
Taxable Year, determined on a daily, monthly or other basis as determined by the
Management Committee, using any permissible method under Code Section 706 and
the Regulations thereunder.
6.6 Withholding. Each Member hereby authorizes the Company to withhold and
to pay over any taxes payable by the Company or any of its Affiliates as a
result of such Member's participation in the Company; if and to the extent that
the Company shall be required to withhold any such taxes, such Member shall be
deemed for all purposes of this Agreement to have received a payment from the
Membership as of the time such withholding is required to be paid, which payment
shall be deemed to be a distribution to such Member to the extent that the
Member is then entitled to receive a distribution. To the extent that the
aggregate of such payments in respect of a Member for any period exceeds the
distributions to which such Member is entitled for such period, the amount of
such excess shall be considered a demand loan from the Company to such Member,
with interest at 8% per annum, which interest shall be treated as an item of
Company income, until discharged by such Member by repayment, which may be made
in the sole discretion of the Management Committee out of distributions to which
such Member would otherwise be subsequently entitled. The withholdings referred
to in this Section 5.6 shall be made at the maximum applicable statutory rate
under the applicable tax law unless the Management Committee shall have received
an opinion of counsel or other evidence, satisfactory to the Management
Committee, to the effect that a lower rate is applicable, or that no withholding
is applicable.
ARTICLE 7
MEMBERS' MEETINGS
7.1 Meetings of Members; Place of Meetings. Regular meetings of the Members
may be held on an annual basis or more frequently as determined by a Majority in
Interest of the Members. All meetings of the Members shall be held in New York,
New York at a location as designated from time to time by the Management
Committee and stated in the Notice of the meeting or in a duly executed waiver
of the Notice thereof. Special meetings of the Members may be held for any
purpose or purposes, unless otherwise prohibited by law, and may be called by
the Management Committee or by Members owning not less than twenty-five percent
(25%) of the Percentage Interests. Members may participate in a meeting of the
Members by means of conference telephone or other similar communication
equipment whereby all Members participating in the meeting can hear each other.
Participation in a meeting in this manner shall constitute presence in person at
the meeting.
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7.2 Quorum; Voting Requirement. The presence, in person or by proxy, of a
Majority in Interest of the Members shall constitute a quorum for the
transaction of business by the Members. The affirmative vote of a Majority in
Interest of the Members present, in person or by proxy, at any meeting shall
constitute a valid decision of the Members, except where a larger vote is
required by the Act.
7.3 Proxies. At any meeting of the Members, every Member having the right
to vote thereat shall be entitled to vote in person or by proxy appointed by an
instrument in writing signed by such Member and bearing a date not more than one
year prior to such meeting.
7.4 Action Without Meeting. Any action required or permitted to be taken at
any meeting of Members of the Company may be taken without a meeting, without
prior notice and without a vote if a consent in writing setting forth the action
so taken is signed by Members having not less than the minimum Percentage
Interests that would be necessary to authorize or take such action at a meeting
of the Members. Prompt Notice of the taking of any action taken pursuant to this
Section 6.4 by less than the unanimous written consent of the Members shall be
given to those Members who have not consented in writing.
7.5 Notice. Notice stating the place, day and hour of the meeting and the
purpose for which the meeting is called shall be delivered personally or sent by
mail or by telecopier not less than five (5) days nor more than sixty (60) days
before the date of the meeting by or at the direction of the Management
Committee or other persons calling the meeting, to each Member entitled to vote
at such meeting.
7.6 Waiver of Notice. When any Notice is required to be given to any Member
hereunder, a waiver thereof in writing signed by the Member, whether before, at
or after the time stated therein, shall be equivalent to the giving of such
Notice.
7.7 No Authority. Unless expressly authorized herein or by action of the
Members or the Management Committee in accordance herewith and the Act, no
Member shall have any authority to act on behalf of the Company or bind the
Company in any manner whatsoever, including, without limitation, entering into
any agreement on behalf of the Company.
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ARTICLE 8
MANAGEMENT AND CONTROL
8.1 Management Committee; Managers.
(a) Except as otherwise provided hereunder, the business and affairs of the
Company shall be managed by a Management Committee comprised of up to a total of
four (4) Managers, (i) two of whom shall be designated by a Majority in Interest
of the Group A Members and (ii) two of whom shall be designated by a Majority in
Interest of the Group B Members, provided, however, that from and after the date
that is 12 months after the Initial Capital Contribution Date, the Group A
Members shall have the right to elect to have the Management Committee consist
of a total of five (5) Managers, (i) three of whom shall be designated by a
Majority in Interest of the Group A Members and (ii) two of whom shall be
designated by a Majority in Interest of the Group B Members. The Group A Members
shall have the right to remove or replace (following death or resignation) any
or all of the Managers designated by the Group A Members and designate their
successors, and the Group B Members shall have the right to remove or replace
(following death or resignation) any or all of the Managers designated by the
Group B Members and designate their successors. The initial Managers shall be
Alfred D. Kingsley, Gary K. Duberstein and Richard Katz.
(b) Except as otherwise expressly provided herein, the power and authority
granted to the Management Committee hereunder shall include all those necessary
or convenient for the furtherance of the purposes of the Company and shall
include the power to make all decisions with regard to the management,
operations, assets, financing and capitalization of the Company.
(c) Anything to the contrary herein notwithstanding, no Manager shall have
any authority to bind the Company or the Management Committee in his individual
capacity in any manner whatsoever, except for such authority as shall be
expressly delegated to a Manager in this Agreement or by the Management
Committee.
(d) The board of directors (or similar governing body) of any subsidiary of
the Company shall be comprised of such members as may be approved by the
Management Committee of the Company; provided, however, that the Class B Members
shall have the right to designate one member of any such board of directors (or
similar governing body).
8.2 Management Committee Meetings; Authority; Proxies.
(a) The Management Committee will establish a regular meeting schedule, and
will use its reasonable best efforts to meet at least once every quarter. Unless
otherwise agreed by a majority of the Managers, meetings of the Management
Committee shall be held in New York, New York. Meetings may be conducted in
person, by telephone or in any other manner agreed to by the Management
Committee. Any two (2)
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Managers may call a meeting of the Management Committee
upon delivery of written or telephonic Notice at least three (3) Business Days
prior to the date of such meeting, which Notice shall be accompanied by a
proposed agenda or statement of purpose and by copies of all documents,
agreements and information to be considered at such meeting; provided, however,
at any such meeting, the Managers may address any and all business matters which
may come before it, whether or not such items were provided for in the proposed
agenda.
(b) A quorum shall exist when three of the Managers are present in person
or by proxy. Each Manager is entitled to vote at any meeting of the Management
Committee. The vote of three of the Managers present in person or by proxy at
any meeting of the Management Committee shall be required for action by the
Management Committee.
(c) At each meeting of the Management Committee, every Manager shall be
entitled to vote in person or by proxy appointed by instrument in writing,
subscribed by such Manager.
8.3 Management Committee's Authority; Certain Limitations. (a) Except as
expressly set forth herein, the Management Committee shall have the maximum
power and authority with respect to the business and operations of the Company
permitted by law, including, without limitation, the right to cause the Company
to merge or consolidate with, or sell all, or substantially all, of its asset to
any Person.
(b) Notwithstanding the grant of authority to the Management Committee
pursuant to Section 7.3(a) and except as otherwise contemplated in Sections
10.1(a), (b) and (c), the Management Committee shall not authorize the Company
to merge or consolidate with, or sell all, or substantially all, of its assets
to, a Member or an Affiliate of a Member without the prior written consent of a
Majority in Interest
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of the Group A Members and a Majority in Interest of the Group B Members.
8.4 Officers; Agents. The Management Committee shall have the power to
appoint any Person or Persons as agents (who may be referred to as officers) to
act for the Company with such titles, if any, as the Management Committee deems
appropriate and to delegate to such officers or agents such of the powers as are
granted to the Management Committee hereunder, provided, however, that without
the express approval of the Management Committee, no officer or agent shall have
the authority to take any action (i) outside the ordinary course of business of
the Company or (ii) material to the Company and its subsidiaries taken as a
whole. Any decision or act of an officer appointed under this Section 7.4 within
the scope of the officer's designated or delegated authority shall control and
shall bind the Company. The officers or agents so appointed may have such titles
as the Management Committee shall deem appropriate, which may include (but need
not be limited to) President and Chief Executive Officer, Executive Vice
President, Vice President, Chief Operating Officer, Chief Financial Officer,
Treasurer or Controller. The initial officers of the Company are set forth on
Schedule 7.4. Unless the authority of the agent designated as the officer in
question is limited by the Management Committee, any officer so appointed shall
have the same authority to act for the Company as a corresponding officer of a
Delaware corporation would have to act for a Delaware corporation in the absence
of a specific delegation of authority, provided, however, that without the
express approval of the Management Committee, no officer or agent shall have the
authority to take any action outside the ordinary course of business of the
Company or (ii) material to the Company and its subsidiaries taken as a whole.
The Management Committee, in its sole discretion, may by vote, resolution or
otherwise ratify any act previously taken by an officer or agent acting on
behalf of the Company.
8.5 Resignation of a Management Committee Member. A Manager may resign from
such position at any time upon giving Notice to the Management Committee. Any
vacancy created by any such resignation of a Manager shall be filled by the
Persons or Person who designated such vacating Manager in accordance with the
provisions of Section 7.1(a).
8.6 Compensation Except as otherwise provided herein, each Manager shall be
entitled to reimbursement from the Company for all reasonable direct
out-of-pocket expenses incurred on behalf of the Company and shall not be
entitled to further compensation except as may be approved by a Majority in
Interest by the Group A Members and a Majority in Interest of the Group B
Members.
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ARTICLE 9
LIABILITY AND INDEMNIFICATION
9.1 Liability of Members. A Member shall only be liable to make the payment
of its Capital Contribution. No Member, except as otherwise specifically
provided in the Act, shall be obligated to pay any distribution to or for the
account of the Company or any creditor of the Company.
9.2 Indemnification.
(a) The Company shall indemnify and hold harmless each Manager and Member
and their respective Affiliates and all officers, directors, members, partners,
stockholders, managers and employees thereof, and each officer of the Company
and any Person serving in any similar capacity for another Person affiliated
with the Company at the request of the Company (solely for purposes of this
Section 8.2, each such Person being referred to as, a "Company Affiliate"), from
and against any and all losses, claims, demands, costs, damages, liabilities,
expenses of any nature (including reasonable attorneys' fees and disbursements),
judgments, fines, settlements and other amounts arising from any and all claims,
demands, actions, suits or proceedings, whether civil, criminal, administrative
or investigative, in which a Company Affiliate may be involved, or threatened to
be involved, as a party or otherwise, arising out of or incidental to the
business of the Company, including, without limitation, liabilities under the
Federal and state securities laws, regardless of whether a Company Affiliate
continues to be a Company Affiliate, at the time any such liability or expense
is paid or incurred, if (i) the Company Affiliate acted in good faith and in a
manner it or he reasonably believed to be in, or not opposed to, the interests
of the Company and, with respect to any criminal proceeding, had no reason to
believe its or his conduct was unlawful, and (ii) the Company Affiliate's
conduct did not constitute actual fraud, gross negligence or willful or wanton
misconduct. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere, or its
equivalent, shall not, in and of itself, create a presumption or otherwise
constitute evidence that the Company Affiliate acted in a manner contrary to
that specified in (i) or (ii) above.
(b) Expenses (including reasonable legal fees and expenses) incurred in
defending any proceeding subject to subsection (a) of this Section 8.2 shall be
paid by the Company in advance of the final disposition of such proceeding upon
receipt of a written affirmation by the Company Affiliate of his or its good
faith belief that he or it has met the standard of conduct necessary for
indemnification under this Section 8.2 and a written undertaking (which need not
be secured) by or on behalf of the Company Affiliate to repay such amount if it
shall ultimately be determined, by a court of competent jurisdiction or
otherwise, that the Company Affiliate is not entitled to be indemnified by the
Company as authorized hereunder.
(c) The indemnification provided by this Section 8.2 shall be in addition
to any other rights to which each Company Affiliate may be entitled under any
agreement or vote of the Management Committee by the vote of Managers that are
disinterested and
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unaffiliated with such Company Affiliate, as a matter of law or otherwise, both
as to action in the Company Affiliate's capacity as a Company Affiliate or as a
Person serving at the request of the Company and shall continue as to a Company
Affiliate who has ceased to serve in such capacity and shall inure to the
benefit of the heirs, successors, assigns, administrators and personal
representatives of such Company Affiliate.
(d) The Company may purchase and maintain directors and officers insurance
or, similar coverage, for its Managers and its officers in such amounts and with
such deductibles or self-insured retentions as are customary for Persons engaged
in businesses similar in size and type to those engaged in by the Company.
(e) Except as provided in Section 3.4, any indemnification hereunder shall
be satisfied only out of the assets of the Company and the Members shall not be
subject to personal liability by reason of these indemnification provisions. To
the extent the Company does not have adequate cash available to satisfy its
obligations under this Article 8, the Company shall pay its obligations under
this Article 8 out of Net Cash Flow prior to making any distributions (other
than distributions under Section 4.1(a) hereof) to the Members.
(f) A Company Affiliate shall not be denied indemnification in whole or in
part under this Section 8.2 because the Company Affiliate had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement and all material facts
relating to such indemnitee's interest were adequately disclosed to the
Management Committee at the time the transaction was consummated.
(g) The provisions of this Section 8.2 are for the benefit of the Company
Affiliates and the heirs, successors, assigns, administrators and personal
representatives of the Company Affiliates and shall not be deemed to create any
rights for the benefit of any other Persons.
(h) Any repeal or amendment of any provisions of this Section 8.2 shall be
prospective only and shall not adversely affect any Company Affiliates's right
existing at the time of such repeal or amendment.
ARTICLE 10
TRANSFERS OF MEMBERSHIP INTERESTS
10.1 General Restrictions.
(a) No Member may Transfer all or any part of such Member's Membership
Interest, except as provided in this Agreement. Any purported Transfer or
purported
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purchase of a Membership Interest or a portion thereof in violation of the terms
of this Agreement shall be null and void and of no effect. A permitted Transfer
shall be effective as of the date specified in the instruments relating thereto.
Any transferee desiring to make a further Transfer shall become subject to all
the provisions of this Article 9 to the same extent and in the same manner as
any Member desiring to make any Transfer. No Member shall have the right to
withdraw as a Member of the Company.
(b) In the event that the Membership Interests are registered under the
Securities Act, the Transfer restrictions set forth in this Article 9 shall
terminate.
10.2 Permitted Transferees.
(a) Notwithstanding the provisions of Sections 9.8 and 9.9, each Member
shall have the right to Transfer (but not to substitute the transferee as a
substitute Member in such Member's place, except in accordance with Section
9.3), by a written instrument, all or any part of a Member's Membership
Interest, to any of its Affiliates (each a "Permitted Transferee"); it being
understood that any such Permitted Transferee shall be deemed to be an
additional or substitute Member as of the date of such Transfer and each Member
agrees to take such action and execute such documents as such transferee may
deem reasonably necessary and appropriate for such transferee to become a
substitute or additional Member. Notwithstanding the provisions of Sections 9.8
and 9.9, each Member shall have the right to pledge such Member's interest as
collateral security for a loan to another Member or to a financial institution
generally in the business of making commercial loans (including by means of a
total equity return swap or similar financing technique); provided, however,
that no such pledge shall be made for the purpose of effecting a disguised sale
to the pledgee and; provided further, that any such pledgee shall agree in a
writing delivered to the Company to be bound by all the terms and conditions of
this Agreement, including,without limitation, the terms and conditions set forth
in Section 9.10.
(b) Unless and until admitted as a substitute Member pursuant to Section
9.3, a transferee of a Member's Membership Interest in whole or in part shall be
an assignee with respect to such Transferred Membership Interest and shall not
be entitled to participate in the management of the business and affairs of the
Company or to become or to exercise the rights of a Member, including the right
to vote, the right to require any information or accounting of the Company's
business or the right to inspect the Company's books and records. Such
transferee shall only be entitled to receive, to the extent of the Membership
Interest transferred to such transferee, the share of distributions and profits,
including distributions representing the return of Capital Contributions, to
which the transferor would otherwise be entitled with respect to the Transferred
Interest. The transferror shall have the right to vote such Transferred Interest
until the transferee is
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admitted to the Company as a substituted Member with respect to the Transferred
Interest.
10.3 Substitute Members. No transferee of all or part of a Member's
Membership Interest shall become a substitute Member in place of the transferor
unless and until:
(a) the transferee has executed an instrument in form and
substance reasonably satisfactory to the Management Committee accepting and
adopting the terms and provisions of the Certificate and this Agreement;
and
(b) the transferee has caused to be paid all reasonable
expenses of the Company in connection with the admission of the transferee
as a substitute Member.
Upon satisfaction of all the foregoing conditions with respect to a
particular transferee, the President and Chief Executive Officer shall cause the
books and records of the Company to reflect the admission of the transferee as a
substitute Member to the extent of the Transferred Interest held by the
transferee.
10.4 Effect of Admission as a Substitute Member. A transferee who has
become a substitute Member has, to the extent of the transferred Membership
Interest, all the rights, powers and benefits of, and is subject to the
restrictions and liabilities of a Member under the Certificate, this Agreement
and the Act. Upon admission of a transferee as a substitute Member, the
transferor of the Membership Interest so held by the substitute Member shall
cease to be a Member of the Company to the extent of such transferred Membership
Interest.
10.5 Consent. Each Member hereby agrees that upon satisfaction of the terms
and conditions of this Article 9 with respect to any proposed Transfer, the
Person proposed to be such transferee may be admitted as a Member.
10.6 No Dissolution. If a Member transfers all of its Membership Interest
pursuant to this Article 9 and the transferee of such Membership Interest is
admitted as a Member pursuant to Section 9.3, such Person shall be admitted to
the Company as a Member effective on the effective date of the Transfer or such
other date as may be specified when the Member is admitted. In such event, the
Company shall not dissolve if the business of the Company is continued without
dissolution in accordance with clause (c) of Section 10.1 hereof.
10.7 Additional Members; Certain Representations of Members. Subject to
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Section 3.7, after the formation of the Company, any Person acceptable to the
Management Committee may become an additional Member of the Company for such
consideration as the Management Committee shall determine, provided that such
additional Member complies with all the requirements of a transferee under
Sections 9.3(a) and (b).
10.8 Right of First Offer.
(a) Subject to Section 9.1(c), if at any time any Member (hereinafter for
purposes of this Section 9.8, the "Section 9.8 Selling Members") proposes to
Transfer to any Person other than a Permitted Transferee (hereinafter for
purposes of this Section 9.8, the "Section 9.8 Proposed Purchaser") its
Membership Interest (or any portion thereof), such Section 9.8 Selling Member
shall provide Notice of the proposed Transfer to the other Members (hereinafter
for purposes of Section 9.8, the "Section 9.8 Offerees") setting forth the
price, terms and conditions of the proposed sale of the Membership Interest.
Each of the Section 9.8 Offerees shall have the option to acquire such Member's
pro rata portion (which shall be in proportion to the Percentage Interests of
all Section 9.8 Offerees) at the time of such Notice on the terms and conditions
set forth in such Notice. The option of Section 9.8 Offerees to purchase their
pro rata portions of the Membership Interest shall be exercised by delivery of a
Notice to the Section 9.8 Selling Member and the Company of exercise within
twenty-one (21) days following receipt of the Section 9.8 Selling Member's
Notice of the price, terms and conditions of the sale. A Section 9.8 Offeree may
exercise such Member's option to purchase such Membership Interest only as to
the entire portion thereof that such Member is entitled to purchase. If any
Section 9.8 Offeree fails or declines to purchase such Member's pro rata portion
of such Membership Interest, then such Member's portion of such Membership
Interest shall be offered to the Section 9.8 Offerees who have exercised their
options to purchase their pro rata portions. This procedure shall continue until
such time as the entire Membership Interest offered hereby has been purchased by
such Section 9.8 Offerees or until no such Member desires to purchase any
additional Membership Interest hereunder. Each Section 9.8 Offeree shall have
the right to offer to acquire such Membership Interest by delivering to the
Section 9.8 Selling Member and the Company such Member's Notice of acceptance
within three (3) Business Days following receipt of the Company's Notice that
additional portions are available. If less than the entire Membership Interest
to be sold by the Section 9.8 Selling Member is purchased by the Section 9.8
Offerees, the Section 9.8 Selling Member may sell the entire Membership Interest
to be sold within thirty (30) days from the Notice referred in the preceding
sentence, upon terms and conditions no less favorable to the Section 9.8 Selling
Member than were set forth in the initial Notice (it being understood that such
terms may include the receipt by the Selling Member of consideration consisting
of only cash and/or securities with a readily ascertainable market value).
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(b) The sale of any Membership Interest to Section 9.8 Offerees who
exercise their options to purchase any Membership Interest shall occur
twenty-one (21) days after the expiration of the last option to expire under
Section 9.8(a) above. At the closing, each of the Section 9.8 Offerees shall
deliver a certified or bank cashier's check in the appropriate amount to the
Section 9.8 Selling Member against the simultaneous delivery of an assignment in
form and substance reasonably satisfactory to each Section 9.8 Offeree of the
Member Interest (or portion thereof) being transferred to such Section 9.8
Offeree, such assignment shall be made free and clear of all liens, claims and
encumbrances, except as provided by this Agreement or as otherwise agreed to by
such Section 9.8 Offeree.
10.9 Tag-Along Rights. (a) In the event of any proposed Transfer by any
Member (hereinafter for purposes of this Section 9.9, the "Section 9.9 Selling
Member") of its Membership Interests (or any portion thereof) to any Person
(such Person being hereinafter referred to as the "Section 9.9 Proposed
Purchaser"), other than to a Permitted Transferee or in a bona fide public
distribution pursuant to an effective Registration Statement under the
Securities Act, each of the other Members (hereinafter for purposes of this
Section 9.9, the "Section 9.9 Tagged Members") shall have the irrevocable and
exclusive right, but not the obligation (the "Tag-Along Right"), to require the
Section 9.9 Proposed Purchaser to purchase from each of them such Section 9.9
Tagged Member's pro rata portion (i.e., such Tagged Member's Percentage
Interest) of the Membership Interests proposed to be sold by the Section 9.9
Selling Members to the Section 9.9 Proposed Purchaser (collectively, the
"Section 9.9 Tag-Along Membership Interest"). The Section 9.9 Selling Members
shall give Notice (the "Initial Tag-Along Notice") to the Section 9.9 Tagged
Members at least thirty (30) days prior to the date of the proposed Transfer and
at least three (3) Business Days after the expiration of the last option to
expire under Section 9.8(a) above, stating:
(i) the name and address of the Section 9.9 Proposed
Purchaser;
(ii) the proposed amount of consideration and terms and
conditions of payment offered by such Section 9.9 Proposed Purchaser (if
the proposed consideration is not cash, the Notice shall describe the terms
of the proposed consideration) and any other material terms and conditions
of the Section 9.9 Proposed Purchaser's offer;
(iii) the Membership Interest proposed to be transferred; and
(iv) that the Section 9.9 Proposed Purchaser has been informed
of the Tag-Along Right and has agreed to purchase Membership Interests in
accordance with the terms hereof.
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The Tag-Along Right shall be exercised by any or all of the Section 9.9
Tagged Members by giving Notice to the Company ("Tag-Along Notice") with a copy
to each Section 9.9 Selling Member, within five (5) days following receipt of
the Initial Tag-Along Notice, indicating its election to exercise the Tag-Along
Right (hereinafter referred to for purposes of this Section 9.9, the "Section
9.9 Participating Tagged Members"). The Tag-Along Notice shall state the amount
of Membership Interests that such Section 9.9 Participating Tagged Member
proposes to include in such transfer to the Section 9.9 Proposed Purchaser.
Failure by any Section 9.9 Tagged Member to give such Tag-Along Notice within
such 5 day period shall be deemed an election by such Section 9.9 Tagged Member
not to sell its Membership Interests pursuant to the Tag-Along Notice. The
closing with respect to any sale to a Section 9.9 Proposed Purchaser pursuant to
this Section shall be held at the time and place specified in the Tag-Along
Notice but in any event within sixty (60) days of the date the Tag-Along Notice
is given. Consummation of the sale of Membership Interests by any Section 9.9
Selling Member to a Section 9.9 Proposed Purchaser shall be conditioned upon
consummation of the sale by each Section 9.9 Participating Tagged Member to such
Section 9.9 Proposed Purchaser of the Section 9.9 Tag-Along Membership Interest,
if any.
(b) In the event that the Section 9.9 Proposed Purchaser does not purchase
the Section 9.9 Tag-Along Membership Interest from the Section 9.9 Participating
Tagged Members on the same terms and conditions as purchased from the Section
9.9 Selling Member, then the Section 9.9 Selling Member making such Transfer
shall purchase on such terms and conditions such Section 9.9 Tag-Along
Membership Interest if the Transfer occurs.
(c) The Section 9.9 Selling Members who are parties to a sale to a Section
9.9 Proposed Purchaser shall arrange for payment directly by the Section 9.9
Proposed Purchaser to each Section 9.9 Participating Tagged Member, upon
delivery of an appropriate assignment in form and substance reasonably
satisfactory to the Section 9.9 Proposed Purchaser, which assignment shall be
made free and clear of all liens, claims and encumbrances except as provided by
this Agreement or as otherwise agreed to by such Section 9.9 Proposed Purchaser.
(d) If at the end of 60 days following the date on which a Tag-Along Notice
was given, the sale of Membership Interests by the Section 9.9 Selling Members
and the sale of the Section 9.9 Tag-Along Membership Interests have not been
completed in accordance with the terms of the Section 9.9 Proposed Purchaser's
offer, all the restrictions on sale, transfer or assignment contained in this
Agreement with respect to Membership Interests owned by the Members shall again
be in effect.
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10.10 Piggyback Registration.
(a) For the purposes of this Section 9.11, the following capitalized terms
shall have the following meanings:
(i) "Common Stock" shall mean the common stock of the Company
issued upon conversion of the Company to a corporation;
(ii) "Other Shares" shall mean at any time those shares of
Common Stock or other securities of the Company which do not constitute
Primary Shares or Registrable Shares;
(iii) "Primary Shares" shall mean at any time authorized but
unissued shares of Common Stock or shares of Common Stock held by the
Company in its treasury;
(iv) "Registrable Shares" shall mean the shares of Common Stock
held by the Members in the Company which constitute Restricted Shares
and which are not then eligible for sale to the public pursuant to Rule
144 (other than Rule 144(k)) in a single transaction (and including
Membership Interests held by Members prior to the conversion of the
Company to a corporation).
(v) "Restricted Shares" shall mean any Membership Interests,
shares of Common Stock or other securities received in respect thereof
held or which may be acquired from the Company by the Members as of the
applicable date, and which theretofore have not been sold to the public
pursuant to a registration statement under the Securities Act or
pursuant to Rule 144; and
(vi) "Rule 144" shall mean Rule 144 promulgated under the
Securities Act or any successor rule thereto or any complementary rule
thereto (such as Rule 144A).
(b) If the Company at any time proposes for any reason to register
Primary Shares or Other Shares under the Securities Act (other than on Form S-4
or Form S-5 promulgated under the Securities Act or any successor forms
thereto), it shall promptly give Notice to the Members of its intention so to
register the Primary Shares or Other Shares and, upon the written request, given
within 30 days after delivery of any such Notice by the Company, of the Members
to include in such registration Registrable Shares (which request shall specify
the number of Registrable Shares proposed to be included in such registration),
the Company shall use its best efforts to cause all such Registrable Shares to
be included in such registration on the same terms and conditions as the
securities otherwise being sold in such registration; provided, however, that if
the
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<PAGE>
managing underwriter advises the Company that the inclusion of all Registrable
Shares or Other Shares proposed to be included in such registration would
interfere with the successful marketing (including pricing) of Primary Shares
proposed to be registered by the Company, then the number of Primary Shares,
Registrable Shares and Other Shares proposed to be included in such registration
shall be included in the following order:
(i) first, the Primary Shares; and
(ii) second, the Registrable Shares and Other Shares requested
to be included in such registration pro rata, based upon the respective
numbers of Restricted Shares owned at the time by each Member and the
respective numbers of Other Shares owned at the time by each holder of
Other Shares.
(c) If at any time after giving written notice pursuant to this Section
9.10 of its intention to register any securities and prior to the effective date
of the registration statement filed in connection with such registration, the
Company shall determine for any reason either not to register or to delay
registration of such securities, the Company may, at its election, give Notice
of such determination to the Members and, thereupon, (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration and (ii) in the
case of a determination to delay registering, shall be permitted to delay
registering any Registerable Securities, for the same period as the delay in
registering such other securities.
(d) If a registration under this Section 9.11 involves an underwritten
offering, the underwriter or underwriters and any additional investment bankers
and managers to be used in connection with such registration shall be selected
by the Company, and any Member desiring to have Registrable Shares included in
such registration, and any such Investor shall be required to sign an
underwriting agreement in customary form with such underwriter or underwriters.
ARTICLE 11
DISSOLUTION AND TERMINATION
11.1 Events Causing Dissolution. The Company shall be dissolved and its
affairs wound up upon the first to occur of the following events:
(a) The vote of a Majority in Interest of the Group A Members
and a Majority in Interest of the Group B Members to dissolve;
(b) The sale, Transfer or other disposition of substantially
all of the assets of the Company and the receipt and distribution of
all the proceeds therefrom;
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(c) The death, retirement, resignation, insanity, expulsion,
bankruptcy or dissolution of a Member, or any other event which
terminates the continued membership of a Member in the Company, unless
there is at least one remaining Member;
(d) The entry of a decree of judicial dissolution pursuant to
Section 18-802 of the Act; or
(e) The expiration of the term of the Company as provided in
Section 2.5.
11.2 Notices to Secretary of State. When all the remaining property and
assets of the Company have been distributed, the Certificate shall be cancelled
by filing a certificate of cancellation with the Secretary of State of Delaware.
11.3 Cash Distributions Upon Dissolution. Upon the dissolution of the
Company as a result of the occurrence of any of the events set forth in Section
10.1, the Management Committee shall proceed to wind up the affairs of and
liquidate the Company and any cash and proceeds therefrom shall be applied and
distributed in the following order of priority:
(a) First, to the payment (or the making of reasonable
provision for payment) of debts and liabilities of the Company in the
order of priority as provided by law (including any loans or advances
that may have been made by any of the Members to the Company) and the
expenses of liquidation including the establishment of any Reserves
which the Management Committee may reasonably deem necessary for any
contingent, conditional or unasserted claims or obligations of the
Company. Such Reserves may be paid over by the Company to an escrow
agent to be held for disbursement in payment of any of the
aforementioned liabilities and, at the expiration of such period as
shall be reasonably deemed advisable by the Management Committee, for
distribution of the balance in the manner provided in this Article 10;
(b) Finally, the remaining balance, if any, to the Members in
proportion to their respective positive Capital Accounts, after giving
effect to all contributions, distributions and allocations for all
periods, in accordance with the requirements of Regulation Section
1.704-1(b)(2)(ii)(b)(2).
11.4 In-Kind. Notwithstanding the foregoing but subject to Section
18-804(a)(1) of the Act, in the event the Management Committee shall determine
that an immediate sale of part of or all the Property would cause undue loss to
the Members, or the Management Committee determines that it would be in the best
interest of the
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<PAGE>
Members to distribute the Property to the Members in-kind (which distributions
do not, as to the in-kind portions, have to be in the same proportions as they
would be if cash were distributed, but all such in-kind distributions shall be
equalized, to the extent necessary, with cash), then the Management Committee
may either defer liquidation of, and withhold from distribution for a reasonable
time, any of the Property except that necessary to satisfy the Company's debts
and obligations, or distribute the Property to the Members in-kind.
11.5 No Action for Dissolution. The Members acknowledge that
irreparable damage would be done to the goodwill and reputation of the Company
if any Member should bring an action in court to dissolve the Company under
circumstances where dissolution is not required by Section 10.1. Accordingly,
except where the Manager has failed to liquidate the Company as required by
Section 10.1 and except as specifically provided in Section 18-802 and Section
18-803(a) of the Act, each Member hereby to the fullest extent permitted by law
waives and renounces his right to initiate legal action to seek dissolution of
the Company or to seek the appointment of a receiver or trustee to wind up the
affairs of the Company, except in the cases of fraud, violation of law, bad
faith, gross negligence, willful misconduct or willful violation of this
Agreement.
ARTICLE 12
TAX MATTERS MEMBER
12.1 Tax Matters Member. Greenlake Holdings LLC shall be the initial
Tax Matters Member of the Company as provided in the Regulations under Section
6231 of the Code and analogous provisions of state law. The Management Committee
shall have the authority to remove or replace (following death or resignation)
the Tax Matters Member of the Company and designate its successor.
12.2 Certain Authorizations. The Tax Matters Member shall represent the
Company, at the Company's expense, in connection with all examinations of the
Company's affairs by tax authorities including any resulting administrative or
judicial proceedings. Without limiting the generality of the foregoing, and
subject to the restrictions set forth herein, the Tax Matters Member, but only
with the consent or approval or at the director of the Management Committee, is
hereby authorized:
(a) to enter into any settlement with the Secretary with
respect to any tax audit or judicial review, in which agreement the Tax
Matters Member may expressly state that such agreement shall bind the
other Members except that such settlement agreement shall not bind any
Member that has not approved such settlement agreement in writing;
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<PAGE>
(b) if a notice of a final administrative adjustment at the
Company level of any item required to be taken into account by a Member
for tax purposes is mailed to the Tax Matters Member, to seek judicial
review of such final adjustment, including the filing of a petition for
readjustment with the Tax Court, the District Court of the United
States for the district in which the Company's principal place of
business is located, or elsewhere as allowed by law, or the United
States Claims Court;
(c) to intervene in any action brought by any other Member
for judicial review of a final adjustment;
(d) to file a request for an administrative adjustment with
the Secretary at any time and, if any part of such request is not
allowed by the Secretary, to file a petition for judicial review with
respect to such request;
(e) to enter into an agreement with the Internal Revenue
Service to extend the period for assessing any tax that is attributable
to any item required to be taken into account by a Member for tax
purposes, or an item affected by such item; and
(f) to take any other action on behalf of the Members (with
respect to the Company) or the Company in connection with any
administrative or judicial tax proceeding to the extent permitted by
applicable law or the Regulations.
Each Member shall have the right to participate in any such actions and
proceedings to the extent provided for under the Code and Regulations.
12.3 Indemnity of Tax Matters Member. To the maximum extent permitted
by applicable law and without limiting Article 8, the Company shall indemnify
and reimburse the Tax Matters Member for all expenses (including reasonable
legal and accounting fees) incurred as Tax Matters Member pursuant to this
Article 13 in connection with any administrative or judicial proceeding with
respect to the tax liability of the Members as long as the Tax Matters Member
has determined in good faith that the Tax Matters Member's course of conduct was
in, or not opposed to, the best interest of the Company. The taking of any
action and the incurring of any expense by the Tax Matters Member in connection
with any such proceeding, except to the extent provided herein or required by
law, is a matter in the sole discretion of the Tax Matters Member.
12.4 Information Furnished. To the extent and in the manner provided by
applicable law and Regulations, the Tax Matters Member shall furnish the name,
address,
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<PAGE>
profits and loss interest, and taxpayer identification number of each Member to
the Internal Revenue Service.
12.5 Notice of Proceedings, etc. The Tax Matters Member shall use best
efforts to keep each Member informed of any administrative and judicial
proceedings for the adjustment at the Company level of any item required to be
taken into account by a Member for income tax purposes or any extension of the
period of limitations for making assessments of any tax against a Member with
respect to any Company item, or of any agreement with the Internal Revenue
Service that would result in any material change either in Income or Loss as
previously reported.
12.6 Notices to Tax Matters Member. Any Member that receives a notice
of an administrative proceeding under Section 6233 of the Code relating to the
Company shall promptly provide Notice to the Tax Matters Member of the treatment
of any Company item on such Member's Federal income tax return that is or may be
inconsistent with the treatment of that item on the Company's return. Any Member
that enters into a settlement agreement with the Internal Revenue Service or any
other government agency or official with respect to any Company item shall
provide Notice to the Tax Matters Member of such agreement and its terms within
sixty (60) days after its date.
12.7 Preparation of Tax Returns. The Tax Matters Member shall arrange
for the preparation and timely filing of all returns of Company income, gains,
deductions, losses and other items necessary for Federal, state and local income
tax purposes and shall use all reasonable efforts to furnish to the Members
within ninety (90) days of the close of the taxable year a Schedule K-1 and such
other tax information reasonably required for Federal, state and local income
tax reporting purposes. The classification, realization and recognition of
income, gain, losses and deductions and other items shall be on the cash or
accrual method of accounting for Federal income tax purposes, as the Management
Committee shall determine in its sole discretion in accordance with applicable
law.
12.8 Tax Elections. The Management Committee shall, in its sole
discretion, determine whether to make any available election.
12.9 Taxation as a Partnership. No election shall be made by the
Company or any Member for the Company to be excluded from the application of any
of the provisions of Subchapter K, Chapter I of Subtitle A of the Code or from
any similar provisions of any state tax laws or to be treated as a corporation
for federal tax purposes.
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<PAGE>
ARTICLE 13
ACCOUNTING AND BANK ACCOUNTS
13.1 Fiscal Year and Accounting Method. The fiscal year and taxable
year of the Company shall be as designated by the Management Committee in
accordance with the Code. The Company shall use an accrual method of accounting.
13.2 Books and Records. The Company shall maintain at its principal
office, or such other office as may be determined by the Management Committee,
all the following:
(a) A current list of the full name and last known business or
residence address of each Member and of the Manager together with
information regarding the amount of cash and a description and
statement of the agreed value of any other property or services
contributed by each Member and which each Member has agreed to
contribute in the future, and the date on which each Member became a
Member of the Company;
(b) A copy of the Certificate and this Agreement, including
any and all amendments to either thereof, together with executed copies
of any powers of attorney pursuant to which the Certificate, this
Agreement, or any amendments have been executed;
(c) Copies of the Company's Federal, state, and local income
tax or information returns and reports, if any, which shall be retained
for at least six fiscal years;
(d) The financial statements of the Company, which shall be
retained for at least six fiscal years; and
(e) The Company's books and records, which shall be retained
for at least six fiscal years.
13.3 Delivery to Members; Inspection. Upon the request of any Member,
for any purpose reasonably related to such Member's interest as a member of the
Company, the Management Committee shall cause to be made available to the
requesting Member the information required to be maintained by clauses (a)
through (d) of Section 14.2 and such other information regarding the business
and affairs of the Company as any Member may reasonably request.
13.4 Financial Statements. The Management Committee shall cause to be
prepared for the Members at least annually, at the Company's expense, financial
statements of the Company, and its subsidiaries, prepared in accordance with
generally
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<PAGE>
accepted accounting principles and audited by a nationally recognized
accounting firm. The financial statements so furnished shall include a balance
sheet, statement of income or loss, statement of cash flows, and statement of
Members' equity. In addition, the Management Committee shall provide on a timely
basis to the Members [monthly and] quarterly financials, statements of cash
flow, any available internal budgets or forecast or other available financial
reports, as well as any reports or notices as are provided by the Company, or
any of its subsidiaries to any financial institution.
13.5 Filings. At the Company's expense, the Management Committee shall
cause the income tax returns for the Company to be prepared and timely filed
with the appropriate authorities and to have prepared and to furnish to each
Member such information with respect to the Company as is necessary (or as may
be reasonably requested by a Member) to enable the Members to prepare their
Federal, state and local income tax returns. The Management Committee, at the
Company's expense, shall also cause to be prepared and timely filed, with
appropriate Federal, state and local regulatory and administrative bodies, all
reports required to be filed by the Company with those entities under then
current applicable laws, rules, and regulations. The reports shall be prepared
on the accounting or reporting basis required by the regulatory bodies.
13.6 Non-Disclosure. Each Member agrees that, except as otherwise
consented to by the Management Committee in writing, all non-public and
confidential information furnished to it pursuant to this Agreement will be kept
confidential and will not be disclosed by such Member, or by any of its agents,
representatives, or employees, in any manner whatsoever, in whole or in part,
except that (a) each Member shall be permitted to disclose such information to
those of its agents, representatives, and employees who need to be familiar with
such information in connection with such Member's investment in the Company, so
long as such agents, representatives and employees agree to keep such
information confidential on the terms set forth herein, (b) each Member shall be
permitted to disclose such information to its partners, stockholders and
affiliates so long as they agree to keep such information confidential on the
terms set forth herein, (c) each Member shall be permitted to disclose
information to the extent required by law, legal process or regulatory
requirements, so long as such Member shall have used its reasonable efforts to
first afford the Company with a reasonable opportunity to contest the necessity
of disclosing such information, (d) each Member shall be permitted to disclose
such information to possible purchasers of all or a portion of the Member's
Interest, provided that such prospective purchaser shall execute a suitable
confidentiality agreement containing terms not less restrictive than the terms
set forth herein, and (e) each Member shall be permitted to disclose information
to the extent necessary for the enforcement of any right of such Member arising
under this Agreement.
13.7 Bank Accounts. All funds of the Company shall be deposited in a
separate bank, money market or similar account(s) approved by the Management
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Committee and in the Company's name. Withdrawals therefrom shall be made only by
Persons authorized to do so by the Management Committee.
ARTICLE 14
MISCELLANEOUS
14.1 Title to Property. Title to the Property shall be held in the name
of the Company. No Member shall individually have any ownership interest or
rights in the Property except indirectly by virtue of such Member's ownership of
a Membership Interest.
14.2 Waiver of Default. No consent or waiver, express or implied, by
the Company or a Member with respect to any breach or default by the Company or
a Member hereunder shall be deemed or construed to be a consent or waiver with
respect to any other breach or default by any party of the same provision or any
other provision of this Agreement. Failure on the part of the Company or a
Member to complain of any act or failure to act of the Company or a Member or to
declare such party in default shall not be deemed or constitute a waiver by the
Company or the Member of any rights hereunder.
14.3 Amendment.
(a) Except as otherwise expressly provided elsewhere in this Agreement,
this Agreement shall not be altered, modified or changed except by an amendment
approved by Members holding a Majority in Interest of the Group A Members and a
Majority in Interest of the Group B Members; provided, however, that if any such
amendment adversely effects the economic rights of a Member, such amendment
shall only be effective if consented to in writing by such Member.
(b) In addition to any amendments otherwise authorized herein, the
Manager or Management Committee may make any amendments to any of the Schedules
to this Agreement from time to time to reflect transfers of Membership Interests
and issuances of additional Membership Interests. Copies of such amendments
shall be delivered to the Members upon execution thereof.
(c) The Manager shall cause to be prepared and filed any amendment to
the Certificate that may be required to be filed under the Act as a consequence
of any amendment to this Agreement.
(d) Any modification or amendment to this Agreement or the Certificate
made in accordance with this Section 13.3 shall be binding on all Members and
the Manager.
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14.4 No Third Party Rights. Except as provided in Article 8, none of
the provisions contained in this Agreement shall be for the benefit of or
enforceable by any third parties, including creditors of the Company. Subject to
Article 8, the parties to this Agreement expressly retain any and all rights to
amend this Agreement as herein provided, notwithstanding any interest in this
Agreement or in any party to this Agreement held by any other Person.
14.5 Severability. In the event any provision of this Agreement is held
to be illegal, invalid or unenforceable to any extent, the legality, validity
and enforceability of the remainder of this Agreement shall not be affected
thereby and shall remain in full force and effect and shall be enforced to the
greatest extent permitted by law.
14.6 Nature of Interest in the Company. A Member's Membership Interest
shall be personal property for all purposes.
14.7 Binding Agreement. Subject to the restrictions on the disposition
of Membership Interests herein contained, the provisions of this Agreement shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective heirs, personal representatives, successors and permitted assigns.
14.8 Headings. The headings of the Certificate and sections of this
Agreement are for convenience only and shall not be considered in construing or
interpreting any of the terms or provisions hereof.
14.9 Word Meanings. The words such as "herein", "hereinafter",
"hereof", and "hereunder" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
The singular shall include the plural, and vice versa, unless the context
otherwise requires.
14.10 Counterparts. This Agreement may be executed in several
counterparts, all of which together shall constitute one agreement binding on
all parties hereto, notwithstanding that all the parties have not signed the
same counterpart.
14.11 Entire Agreement. This Agreement contains the entire agreement
between the parties hereto and thereto and supersedes all prior writings or
agreements with respect to the subject matter hereof.
14.12 Partition. The Members agree that the Property is not and will
not be suitable for partition. Accordingly, each of the Members hereby
irrevocably waives any and all right such Member may have to maintain any action
for partition of any of the Property. No Member shall have any right to any
specific assets of the Company upon
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the liquidation of, or any distribution from, the Company.
14.13 Governing Law; Consent to Jurisdiction and Venue. This Agreement
shall be construed according to and governed by the laws of the State of
Delaware without regard to principles of conflict of laws. The parties hereby
submit to the exclusive jurisdiction and venue of the state courts of New York
County, New York or to the Court of Chancery of the State of Delaware and the
United States District Court for the Southern District of New York and of the
United States District Court for the District of Delaware, as the case may be,
and agree that the Company or Members may, at their option, enforce their rights
hereunder in such courts.
14.14 Discretion. Whenever a Manager shall have discretion to act
hereunder, such Person agrees to act in a reasonable manner on behalf of the
Company and its Affiliates.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
Group A Members:
QUANTUM INDUSTRIAL PARTNERS LDC
By: /s/ Ron Hiram
-----------------------
Ron Hiram
Attorney-in-fact
QUASAR STRATEGIC PARTNERS LDC
By: /s/ Ron Hiram
-----------------------
Ron Hiram
Attorney-in-fact
Group B Member:
GREENLAKE HOLDINGS LLC
By: /s/ Gary K. Duberstein
------------------------
Name: Gary K. Duberstein
Title: Duly Authorized Member
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<PAGE>
SCHEDULE 1
A. Group A Members
<TABLE>
<CAPTION>
Total Capital Percentage
Name and Address Cash Contributed Contribution Interest(1)
- --------------------------------------- --------------------- ----------------------- ------------------
<S> <C> <C> <C>
Quantum Industrial Partners LDC $96,250,000 $96,250,000 34.7473%
Kaya Flamboyan 9
Willemstad
CuraHao,
Netherlands Antilles
Quasar Strategic Partners LDC $96,250,000 $96,250,000 34.7473%
Kaya Flamboyan 9
Willemstad
CuraHao,
Netherlands Antilles
</TABLE>
- ----------
(1) Includes both Group A Members and Group B Members.
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<PAGE>
B. GROUP B MEMBERS
<TABLE>
<CAPTION>
Shares of
OMC Stock Total Capital Percentage
Name and Address Cash Contributed Contributed Gross Asset Value Contribution Interest(1)
- ----------------------- ------------------- ---------------- ------------------- ------------------- ---------------
<S> <C> <C> <C> <C> <C>
Greenlake Holdings LLC $48,500,000 2,000,000 $36,000,000 $84,500,000 30.5054%
c/o Greenway
Partners, L.P.
277 Park Avenue
New York, NY 10172
</TABLE>
- ----------
(1) Includes both Group A Members and Group B Members.
44
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SCHEDULE 7.5
Initial Slate of Officers
Alfred D. Kingsley, President and Chief Executive Officer
Gary K. Duberstein, Vice President, Secretary and Treasurer
45
