<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
----------------
FIBREBOARD CORPORATION
(NAME OF SUBJECT COMPANY)
----------------
SIERRA CORP.
A WHOLLY OWNED SUBSIDIARY OF
OWENS CORNING
(BIDDERS)
----------------
COMMON STOCK, $.01 PAR VALUE PER SHARE
(TITLE OF CLASS OF SECURITIES)
----------------
315712109
(CUSIP NUMBER OF CLASS OF SECURITIES)
----------------
CHRISTIAN L. CAMPBELL
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
OWENS CORNING
ONE OWENS CORNING PARKWAY
TOLEDO, OHIO 43659
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
COPY TO
SIDLEY & AUSTIN
ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60603
(312) 853-7000
ATTENTION: PAUL L. CHOI
PRAN JHA
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CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE
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<S> <C>
$511,737,600 $102,348
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</TABLE>
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* For the purpose of calculating the fee only, this amount assumes the
purchase of 9,304,320 shares of Common Stock of Fibreboard Corporation at
$55.00 per share. Such number of shares includes all outstanding shares as
of May 22, 1997, and assumes the exercise of all stock options to purchase
shares of Common Stock issued by Fibreboard Corporation which were
outstanding as of May 27, 1997.
[_]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: FILING PARTY:
FORM OR REGISTRATION NO.: DATE FILED:
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<PAGE>
This Statement relates to a tender offer by Sierra Corp., a Delaware
corporation (the "Offeror") and a wholly owned subsidiary of Owens Corning, a
Delaware corporation (the "Parent"), to purchase all outstanding shares of
common stock, par value $.01 per share, of Fibreboard Corporation, a Delaware
corporation (the "Company"), including the associated preferred stock purchase
rights (the "Rights") issued pursuant to the Rights Agreement dated as of
August 25, 1988, as amended, between the Company and The First National Bank
of Boston, as successor Rights Agent (collectively, the "Shares"), at a
purchase price of $55.00 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated May 30, 1997 (the "Offer to Purchase"), and in
the related Letter of Transmittal (which together constitute the "Offer"),
copies of which are filed as Exhibits (a)(1) and (a)(2) hereof, respectively,
and which are incorporated herein by reference.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Fibreboard 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 $.01 per share, including the associated
Rights, 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), (g): The information set forth in the Introduction and
Section 9 ("Certain Information Concerning the Parent and the Offeror") of the
Offer to Purchase, and in Annex I thereto, is incorporated herein by
reference.
(e) and (f): Neither the Offeror nor the Parent nor, to the best of their
knowledge, any of the persons listed in Annex 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 the Introduction and Section 11
("Background of the Offer; Past Contacts, Transactions or Negotiations 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 10 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
2
<PAGE>
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 11
("Background of the Offer; Past Contacts, Transactions or Negotiations with
the Company"), Section 12 ("Purpose of the Offer and the Merger; Plans for the
Company") and Section 13 ("The Merger Agreement") of the Offer to Purchase is
incorporated herein by reference.
(f) and (g): The information set forth in Section 7 ("Certain Effects of the
Transaction") of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b): The information set forth in the Introduction, Section 9
("Certain Information Concerning the Parent and the Offeror") and Section 13
("The Merger Agreement") of the Offer to Purchase is incorporated herein by
reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 11 ("Background of
the Offer; Past Contacts, Transactions or Negotiations with the Company") and
Section 13 ("The Merger Agreement") 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 17 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information Concerning the
Parent and the Offeror") 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 Shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) and (c) The information set forth in Section 16 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Certain Effects of the
Transaction") of the Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
3
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated May 30, 1997.
(a)(2) Letter of Transmittal.
(a)(3) Letter from Merrill Lynch & Co., as Dealer Manager, 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 May 30, 1997.
(a)(8) Press Release issued by the Parent and the Company on May 28, 1997.
(a)(9) Press Release issued by the Parent on May 30, 1997.
(b)(1) Commitment Letter, dated as of May 16, 1997, among Credit Suisse
First Boston, as administrative agent, and Parent.
(c)(1) Agreement and Plan of Merger, dated as of May 27, 1997, among Parent,
the Offeror and the Company.
(c)(2) Confidentiality Agreement, dated as of April 23, 1997, among Parent
and the Company is incorporated by reference to the Schedule 14D-9 of
Fibreboard Corporation filed on May 30, 1997.
(d) None.
(e) Not applicable.
(f) None.
4
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Owens Corning
/s/ David W. Devonshire
By: _________________________________
Name: David W. Devonshire
Title:Senior Vice President and
Chief Financial Officer
Sierra Corp.
/s/ Christian L. Campbell
By: _________________________________
Name: Christian L. Campbell
Title: President
Dated: May 30, 1997
5
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
FIBREBOARD CORPORATION
AT
$55.00 NET PER SHARE
BY
SIERRA CORP.
A WHOLLY OWNED SUBSIDIARY OF
OWENS CORNING
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, JUNE 26, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF
SHARES OF COMMON STOCK, $.01 PAR VALUE PER SHARE, OF THE COMPANY, INCLUDING
THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS (COLLECTIVELY, THE "SHARES"),
THAT WOULD CONSTITUTE A MAJORITY OF THE VOTING POWER OF THE SHARES (ASSUMING
THE EXERCISE OF ALL OPTIONS TO PURCHASE, AND THE CONVERSION OR EXCHANGE OF ALL
SECURITIES CONVERTIBLE OR EXCHANGEABLE INTO, SHARES OUTSTANDING AT THE
EXPIRATION DATE OF THE OFFER), (II) ANY WAITING PERIOD UNDER THE HSR ACT (AS
DEFINED HEREIN) APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER
HAVING EXPIRED OR HAVING BEEN TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER
AND (III) THE SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION
15.
THIS OFFER (THE "OFFER") IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND
PLAN OF MERGER, DATED AS OF MAY 27, 1997 (THE "MERGER AGREEMENT"), AMONG OWENS
CORNING, SIERRA CORP., AND FIBREBOARD CORPORATION (THE "COMPANY"). THE BOARD
OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER, THE MERGER (AS
DEFINED HEREIN) AND THE MERGER AGREEMENT (AS DEFINED HEREIN), HAS DETERMINED
THAT THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT HOLDERS OF THE SHARES ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
--------------
IMPORTANT
Any stockholder desiring to tender Shares should either (i) complete and
sign the Letter of Transmittal or a facsimile thereof in accordance with the
instructions in the Letter of Transmittal and deliver the Letter of
Transmittal with the Shares and all other required documents to the Depositary
(as defined herein) or follow the procedure for book-entry transfer set forth
in Section 3 or (ii) request such stockholder's broker, dealer, commercial
bank, trust company or other nominee effect the transaction for the
stockholder. Stockholders having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
person if they desire to tender their Shares.
Any stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available or who cannot comply
with the procedures for book-entry transfer on a timely basis or who cannot
deliver all required documents to the Depositary, in each case prior to the
expiration of the Offer, must tender such Shares pursuant to the guaranteed
delivery procedure set forth in Section 3.
Questions and requests for assistance may be directed to Merrill Lynch,
Pierce, Fenner & Smith Incorporated, the Dealer Manager, or to Georgeson &
Company Inc., the Information Agent, at their respective addresses and
telephone numbers set forth on the back cover of this Offer to Purchase.
Additional copies of this Offer to Purchase, the Letter of Transmittal, the
Notice of Guaranteed Delivery and other related materials may be obtained from
the Information Agent or from brokers, dealers, commercial banks and trust
companies.
--------------
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
May 30, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
Introduction.............................................................. 1
1. Terms of the Offer.................................................... 2
2. Acceptance for Payment and Payment for Shares......................... 4
3. Procedure for Tendering Shares........................................ 5
4. Withdrawal Rights..................................................... 7
5. Certain Federal Income Tax Consequences............................... 8
6. Price Range of Shares; Dividends...................................... 9
7. Certain Effects of the Transaction.................................... 10
8. Certain Information Concerning the Company............................ 11
9. Certain Information Concerning Parent and the Offeror................. 13
10. Source and Amount of Funds............................................ 14
11. Background of the Offer; Past Contacts, Transactions or Negotiations
with the Company......................................................... 16
12. Purpose of the Offer and the Merger; Plans for the Company............ 17
13. The Merger Agreement.................................................. 19
14. Dividends and Distributions........................................... 28
15. Certain Conditions to the Offeror's Obligations....................... 28
16. Certain Legal Matters................................................. 30
17. Fees and Expenses..................................................... 33
18. Miscellaneous......................................................... 33
Annex I. Certain Information Concerning the Directors and Executive
Officers of Parent and the Offeror....................................... I-1
</TABLE>
i
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF FIBREBOARD CORPORATION:
INTRODUCTION
Sierra Corp., a Delaware corporation (the "Offeror") and a wholly owned
subsidiary of Owens Corning, a Delaware corporation ("Parent"), hereby offers
to purchase all outstanding shares of Common Stock, $.01 par value per share,
of Fibreboard Corporation, a Delaware corporation (the "Company"), including
the associated preferred stock purchase rights (the "Rights") issued pursuant
to the Rights Agreement dated as of August 25, 1988, as amended (the "Rights
Agreement"), between the Company and The First National Bank of Boston, as
successor Rights Agent (collectively, the "Shares"), at a purchase price of
$55.00 per Share, net to the seller in cash, without interest, upon the terms
and subject to the conditions set forth in this Offer to Purchase and in the
related Letter of Transmittal (which, together with any amendments or
supplements hereto or thereto, collectively constitute the "Offer"). Tendering
holders of Shares will not be obligated to pay brokerage fees or commissions
or, except as set forth in the Letter of Transmittal, stock transfer taxes on
the purchase of Shares by the Offeror pursuant to the Offer. The Offeror will
pay all charges and expenses of Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Dealer Manager" or "Merrill Lynch"), The Bank of New York
(the "Depositary") and Georgeson & Company Inc. (the "Information Agent") in
connection with the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER (AS DEFINED HEREIN), THE MERGER AGREEMENT (AS DEFINED HEREIN), HAS
DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST
INTERESTS OF, THE COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT THE HOLDERS OF
THE SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
The Company has advised the Offeror that Dillon, Read & Co. Inc. ("Dillon
Read"), the Company's financial advisor, has delivered to the Company's Board
of Directors its written opinion that, as of the date of the Merger Agreement,
the per Share consideration to be offered to the Company's stockholders
pursuant to the Offer and the Merger is fair, from a financial point of view,
to such stockholders. A copy of such opinion is set forth in full in the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 which is
being mailed to the Company's stockholders with this Offer to Purchase, and
such stockholders are urged to read the opinion in its entirety.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH
NUMBER OF SHARES THAT WOULD CONSTITUTE A MAJORITY OF THE VOTING POWER OF THE
SHARES (ASSUMING THE EXERCISE OF ALL OPTIONS TO PURCHASE, AND THE CONVERSION
OR EXCHANGE OF ALL SECURITIES CONVERTIBLE OR EXCHANGEABLE INTO, SHARES
OUTSTANDING AT THE EXPIRATION DATE OF THE OFFER) (THE "MINIMUM CONDITION"),
(II) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT
OF 1976, AS AMENDED (THE "HSR ACT"), APPLICABLE TO THE PURCHASE OF SHARES
PURSUANT TO THE OFFER HAVING EXPIRED OR HAVING BEEN TERMINATED PRIOR TO THE
EXPIRATION OF THE OFFER AND (III) THE SATISFACTION OF CERTAIN OTHER TERMS AND
CONDITIONS. SEE SECTION 15.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of May 27, 1997 (the "Merger Agreement"), among Parent, the Offeror and the
Company. The Merger Agreement provides that, among other things, after the
purchase of Shares pursuant to the Offer and the satisfaction of the other
conditions set forth in the Merger Agreement and in accordance with the
relevant provisions of the General Corporation Law of the State of Delaware,
as amended (the "DGCL"), the Offeror will be merged with and into the Company
(the "Merger"). If the Offeror acquires at least 90% of the outstanding Shares
pursuant to the Offer, the Offeror would be able to effect the Merger pursuant
to the "short-form" merger provisions of Section 253 of the DGCL, without
prior notice to, or any action by, any stockholder of the Company. See Section
12. Following consummation of the Merger, the Company will continue as the
surviving corporation (the "Surviving Corporation") and will be a wholly owned
subsidiary of Parent. At the effective time of the Merger (the "Effective
Time"), each Share that is issued and outstanding (other than Shares owned by
the Company, any subsidiary of the Company, Parent, the Offeror, any other
subsidiary of Parent or by stockholders, if any, who
<PAGE>
are entitled to and who properly exercise appraisal rights under the DGCL)
will be cancelled and become the right to receive from the Surviving
Corporation $55.00 (or any higher price that may be paid for each Share
pursuant to the Offer) in cash, without interest thereon (the "Offer Price").
See Section 5 for a description of certain tax consequences of the Offer and
the Merger.
The Merger Agreement provides that, promptly after the Offeror purchases
Shares pursuant to the Offer (but subject to the satisfaction of the Minimum
Condition), the Offeror will be entitled, to the fullest extent permitted by
law, to designate at its option up to that number of directors, rounded to the
nearest whole number, of the Board of Directors of the Company as will make
the percentage of the Company's directors designated by the Offeror equal to
the aggregate voting power of the Shares held by Parent or any of its
subsidiaries. However, Parent shall cause the Board of Directors of the
Company to have at least three directors who were directors on the date of the
Merger Agreement and who are not officers of the Company. The Company has
agreed, at the option of Parent, either to increase the size of the Board of
Directors of the Company and/or obtain the resignation of such number of
directors as is necessary to enable the Offeror's designees to be elected or
appointed to the Board. The Merger Agreement is more fully described in
Section 13.
The Company has advised the Offeror that as of May 22, 1997, there were
8,490,020 Shares issued and outstanding, and as of the date of the Merger
Agreement there were outstanding stock options and rights to purchase not in
excess of 814,300 Shares. As of the date hereof, neither the Offeror nor
Parent beneficially owns any Shares. If the Offeror acquires at least
4,652,161 Shares in the Offer, it will control a majority of the outstanding
Shares (assuming the exercise of all options to purchase, and the conversion
or exchange of all securities convertible or exchangeable into, Shares
outstanding at the expiration date of the Offer). Accordingly, the Offeror
would have sufficient voting power to approve the Merger without the
affirmative vote of any other stockholder.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER.
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 extension or
amendment), the Offeror will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4. The term "Expiration Date" means 12:00 Midnight,
New York City time, on Thursday, June 26, 1997, unless the Offeror shall have
extended the period of time for which the Offer is open, in which event the
term "Expiration Date" shall mean the latest time and date at which the Offer,
as so extended by the Offeror, shall expire.
If the Offeror shall decide, in its sole discretion, to increase the
consideration offered in the Offer to holders of Shares and if, at the time
that notice of such increase is first published, sent or given to holders of
Shares in the manner specified below, the Offer is scheduled to expire at any
time earlier than the expiration of a period ending on the tenth business day
from, and including, the date that such notice is first so published, sent or
given, then the Offer will be extended until the expiration of such period of
10 business days. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or a federal holiday and consists of the time
period from 12:01 a.m. through 12:00 Midnight, New York City time.
THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM CONDITION, ANY
WAITING PERIOD UNDER THE HSR ACT APPLICABLE TO THE PURCHASE OF SHARES PURSUANT
TO THE OFFER HAVING EXPIRED OR HAVING BEEN TERMINATED PRIOR TO THE EXPIRATION
OF THE OFFER AND CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION 15. THE
MERGER AGREEMENT AND THE OFFER MAY BE TERMINATED BY THE OFFEROR AND PARENT IF
CERTAIN EVENTS OCCUR. The Offeror reserves the right (but shall not be
obligated), in accordance with applicable rules and regulations of the United
States Securities and Exchange Commission (the "Commission"), subject to the
limitations set forth in the Merger Agreement and described below, to waive or
reduce the Minimum Condition
2
<PAGE>
or to waive any other condition to the Offer. If the Minimum Condition or any
condition set forth in Section 15 has not been satisfied by 12:00 Midnight,
New York City time, on Thursday, June 26, 1997 (or any other time then set as
the Expiration Date), the Offeror may, subject to the terms of the Merger
Agreement as described below, elect to (1) extend the Offer and, subject to
applicable withdrawal rights, retain all tendered Shares until the expiration
of the Offer, as extended, (2) subject to complying with applicable rules and
regulations of the Commission, accept for payment all Shares so tendered and
not extend the Offer or (3) terminate the Offer and not accept for payment any
Shares and return all tendered Shares to tendering stockholders.
Under the terms of the Merger Agreement, the Offeror may not (except as
described in the next sentence), without the consent of the Company, reduce
the number of Shares to be purchased in the Offer, reduce the Offer Price,
modify or add to the conditions to the Offer other than the conditions set
forth in Section 15 (other than to waive any such conditions to the extent
permitted by the Merger Agreement), extend the Offer, change the form of
consideration payable in the Offer or make any other change or modification in
any of the terms of the Offer in any manner that is adverse to the holders of
Shares. Notwithstanding the foregoing, the Offeror may, without the consent of
the Company, extend the Offer (i) if at the scheduled or extended Expiration
Date of the Offer, any of the conditions shall not have been satisfied or
waived, until such time as such conditions are satisfied or waived, (ii) for
any period required by any rule, regulation, interpretation or position of the
Commission or the Commission staff applicable to the Offer, or (iii) for a
period of up to five business days, if on any scheduled Expiration Date of the
Offer on which the conditions to the Offer shall have been satisfied or
waived, the number of Shares that have been validly transferred and not
withdrawn represent more than 70% of the voting power of the Shares, but less
than 90% of the voting power of the Shares.
Subject to the limitations set forth in this Offer and the Merger Agreement,
the Offeror reserves the right (but will not be obligated), at any time or
from time to time in its sole discretion, to extend the period during which
the Offer is open by giving oral or written notice of such extension to the
Depositary and by making a public announcement of such extension. Except to
the extent required by the Merger Agreement, there can be no assurance that
the Offeror will exercise its right to extend the Offer. See Section 13.
Subject to the applicable rules and regulations of the Commission and
subject to the limitations set forth in the Merger Agreement, the Offeror
expressly reserves the right, at any time and from time to time, in its sole
discretion, (i) to delay payment for any Shares regardless of whether such
Shares were theretofore accepted for payment, or to terminate the Offer and
not to accept for payment or pay for any Shares not theretofore accepted for
payment or paid for, upon the occurrence of any of the conditions set forth in
Section 15, by giving oral or written notice of such delay or termination to
the Depositary, and (ii) at any time or from time to time, to amend the Offer
in any respect. The Offeror's right to delay payment for any Shares or not to
pay for any Shares theretofore accepted for payment is subject to the
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
relating to the Offeror's obligation to pay for or return tendered Shares
promptly after the termination or withdrawal of the Offer.
Any extension of the period during which the Offer is open, delay in
acceptance for payment or payment, termination or amendment of the Offer will
be followed, as promptly as practicable, by public announcement thereof, such
announcement in the case of an extension to be issued not later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the public announcement
requirements of Rules 14d-4(c) and 14e-1(d) under the Exchange Act. Without
limiting the obligation of the Offeror under such rule or the manner in which
the Offeror may choose to make any public announcement, the Offeror currently
intends to make announcements by issuing a press release to the Dow Jones News
Service and making any appropriate filing with the Commission.
If, subject to the terms of the Merger Agreement, the Offeror makes a
material change in the terms of the Offer or the information concerning the
Offer, or if it waives a material condition of the Offer (including, with the
consent of the Company, a waiver of the Minimum Condition), the Offeror will
disseminate additional tender offer materials and extend the Offer if and to
the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under
3
<PAGE>
the Exchange Act or otherwise. The minimum period during which a tender offer
must remain open following material changes in the terms of the offer or the
information concerning the offer, other than a change in price or a change in
percentage of securities sought, will depend upon the facts and circumstances,
including the relative materiality of the terms or information changes. With
respect to a change in price or a change in percentage of securities sought, a
minimum 10 business day period is generally required to allow for adequate
dissemination to stockholders and investor response.
The Company has provided the Offeror with the Company's list of stockholders
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares whose names appear on
the Company's stockholder list and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the
names of whose nominees, appear on the stockholder list or, if applicable, who
are listed as participants in a clearing agency's security position listing
for subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Offeror will accept for payment and will pay for all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4 promptly after the later to occur of (a) the
Expiration Date and (b) the satisfaction or waiver of the conditions set forth
in Section 15 related to regulatory matters. Subject to compliance with Rule
14e-1(c) under the Exchange Act and any other applicable rules of the
Commission, the Offeror expressly reserves the right to delay acceptance for
payment and payment for Shares in order to comply in whole or in part with any
applicable law. See Sections 1 and 16. In all cases, payment for Shares
tendered and accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for such Shares or
timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of
such Shares into the Depositary's account at The Depository Trust Company or
the Philadelphia Depository Trust Company (collectively, the "Book-Entry
Transfer Facilities"), pursuant to the procedures set forth in Section 3, (ii)
a properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof) with all required signature guarantees or, in the
case of a book-entry transfer, an Agent's Message (as defined below) 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 that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Offeror may enforce such agreement against the participant.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as,
if and when the Offeror gives oral or written notice to the Depositary of the
Offeror's acceptance of such Shares for payment pursuant to the Offer. In all
cases, payment for Shares purchased pursuant to the Offer will be made by
deposit of the purchase price with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the Offeror
and transmitting such payment to tendering stockholders. If, for any reason
whatsoever, acceptance for payment of any Shares tendered pursuant to the
Offer is delayed, or the Offeror is unable to accept for payment Shares
tendered pursuant to the Offer, then, without prejudice to the Offeror's
rights under Section 1, the Depositary may, nevertheless, on behalf of the
Offeror, retain tendered Shares, and such Shares may not be withdrawn, except
to the extent that the tendering stockholders are entitled to withdrawal
rights as described in Section 4 below and as otherwise required by Rule 14e-
1(c) under the Exchange Act. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY
THE OFFEROR BECAUSE OF ANY DELAY IN MAKING ANY PAYMENT.
4
<PAGE>
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted
for more Shares than are tendered, certificates for such unpurchased or
untendered Shares will be returned, without expense to the tendering
stockholder (or, in the case of Shares delivered by book-entry transfer to a
Book-Entry Transfer Facility, such Shares will be credited to an account
maintained within such Book-Entry Transfer Facility), as promptly as
practicable after the expiration, termination or withdrawal of the Offer.
If, prior to the Expiration Date, the Offeror increases the price being paid
for Shares accepted for payment pursuant to the Offer, such increased
consideration will be paid to all stockholders whose Shares are purchased
pursuant to the Offer, whether or not such Shares were tendered prior to such
increase in consideration.
The Offeror reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of its affiliates, the right to purchase
Shares tendered pursuant to the Offer, but any such transfer or assignment
will not relieve the Offeror of its obligations under the Offer or prejudice
the rights of tendering stockholders to receive payment for Shares validly
tendered and accepted for payment.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tenders. For Shares to be validly tendered pursuant to the Offer,
either a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof), 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 at one of its addresses
set forth on the back cover of this Offer to Purchase prior to the Expiration
Date or the tendering stockholder must comply with the guaranteed delivery
procedure set forth below. In addition, either (i) certificates representing
such Shares must be received by the Depositary along with the Letter of
Transmittal or such Shares 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 prior to the Expiration Date, or (ii)
the guaranteed delivery procedures set forth below must be complied with. No
alternative, conditional or contingent tenders will be accepted. 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.
Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at each Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in a Book-Entry
Transfer Facility's system may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. Although delivery of Shares may
be effected through book-entry at a Book-Entry Transfer Facility prior to the
Expiration Date, (i) the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message 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 one of its addresses set forth on the back cover
of this Offer to Purchase or (ii) the guaranteed delivery procedures described
below must be complied with.
Signature Guarantee. Signatures on the Letter of Transmittal must be
guaranteed by a member in good standing of the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program, the Stock Exchange Medallion Program, or by any other bank, broker,
dealer, credit union, savings association or other entity which is an
"eligible guarantor institution," as such term is defined in Rule 17Ad-15
under the Exchange Act (each of the foregoing being referred to as an
"Eligible Institution" and, collectively, as "Eligible Institutions"), unless
the Shares tendered thereby are tendered (i) by a registered holder of Shares
who has not completed either the box labeled "Special Delivery Instructions"
or the box labeled "Special Payment Instructions" on the Letter of Transmittal
or (ii) for the account of any
5
<PAGE>
Eligible Institution. If the certificates evidencing Shares are registered in
the name of a person or persons other than the signer of the Letter of
Transmittal, or if payment is to be made, or delivered to, or certificates for
unpurchased Shares 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, 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 to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit all required documents to reach the
Depositary prior to the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis, such Shares may nevertheless
be tendered if all of the following guaranteed delivery procedures are duly
complied with:
(i) the 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 Offeror, is
received by the Depositary, as provided below, prior to the Expiration
Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation), together with a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile
thereof), and any required signature guarantees, or, in the case of a book-
entry transfer, an Agent's Message, and any other documents required by the
Letter of Transmittal are received by the Depositary within three trading
days after the date of such Notice of Guaranteed Delivery. The term
"trading day" is any day on which the New York Stock Exchange ("NYSE") is
open for business.
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 the Notice of Guaranteed
Delivery.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY 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.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for such Shares or a Book-Entry
Confirmation, (ii) a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof), with all required
signature guarantees or, in the case of a book-entry transfer, an Agent's
Message, and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering stockholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations with respect to
Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE
OFFEROR, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING ANY
PAYMENT.
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT 31% "BACKUP" FEDERAL
INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE OF SHARES
PURCHASED PURSUANT TO THE OFFER, EACH STOCKHOLDER MUST, SUBJECT TO CERTAIN
EXCEPTIONS, PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER
IDENTIFICATION NUMBER ("TIN") AND CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT
TO BACKUP FEDERAL INCOME
6
<PAGE>
TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER
OF TRANSMITTAL. FOREIGN HOLDERS MUST GENERALLY SUBMIT A COMPLETED FORM W-8 TO
AVOID 31% BACKUP WITHHOLDING. THIS FORM MAY BE OBTAINED FROM THE DEPOSITARY.
SEE INSTRUCTIONS 8 AND 9 SET FORTH IN THE LETTER OF TRANSMITTAL.
Determination of Validity. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by the Offeror, in its sole
discretion, and its determination will be final and binding on all parties.
The Offeror reserves the absolute right to reject any or all tenders of any
Shares that are determined by it not to be in proper form or the acceptance of
or payment for which may, in the opinion of the Offeror, be unlawful. The
Offeror also reserves the absolute right to waive any of the conditions of the
Offer, subject to the limitations set forth in the Merger Agreement, or any
defect or irregularity in the tender of any Shares. The Offeror's
interpretation of the terms and conditions of the Offer (including the Letter
of Transmittal and the Instructions to the Letter of Transmittal) will be
final and binding on all parties. No tender of Shares will be deemed to have
been validly made until all defects and irregularities have been cured or
waived. None of the Offeror, Parent, the Dealer Manager, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification.
Other Requirements. By executing the Letter of Transmittal as set forth
above (including through delivery of an Agent's Message), a tendering
stockholder irrevocably appoints designees of the Offeror as such
stockholder's attorneys-in-fact and proxies, each with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the
full extent of such stockholder's right with respect to the Shares tendered by
such stockholder and accepted for payment by the Offeror (and any and all
other Shares or other securities issued or issuable in respect of such
Shares). All such powers of attorney and proxies shall be considered coupled
with an interest in the tendered Shares. This appointment is effective when,
and only to the extent that, the Offeror accepts for payment the Shares
deposited with the Depositary. Upon acceptance for payment, all prior powers
of attorney and proxies given by the stockholder with respect to such Shares
or other securities or rights will, without further action, be revoked and no
subsequent proxies may be given or written consent executed (and, if given or
executed, will not be deemed effective). The designees of the Offeror will,
with respect to the Shares and other securities or rights, be empowered to
exercise all voting and other rights of such stockholder as they in their sole
judgment deem proper in respect of any annual or special meeting of the
Company's stockholders, or any adjournment or postponement thereof, any
actions by written consent in lieu of any such meeting or otherwise. The
Offeror reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the Offeror's payment for such Shares, the
Offeror must be able to exercise full voting and other rights with respect to
such Shares and the other securities or rights issued or issuable in respect
of such Shares, including voting at any meeting of stockholders (whether
annual or special or whether or not adjourned) in respect of such Shares.
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer, as well as the tendering stockholder's representation
and warranty that (i) such stockholder has the full power and authority to
tender, sell, assign and transfer the tendered Shares (and any and all other
Shares or other securities issued or issuable in respect of such Shares), and
(ii) when the same are accepted for payment by 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 Offeror's acceptance for payment of Shares tendered pursuant to the Offer
will constitute a binding agreement between the tendering stockholder and the
Offeror 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 made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer
may be withdrawn at any time prior to the Expiration Date and, unless
theretofore accepted for payment pursuant to the Offer, may also be withdrawn
at any time after July 28, 1997. If purchase of or payment for Shares is
delayed for any reason or if the Offeror is unable to purchase or pay for
7
<PAGE>
Shares for any reason, then, without prejudice to the Offeror's rights under
the Offer, tendered Shares may be retained by the Depositary on behalf of the
Offeror and may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as set forth in this Section 4,
subject to Rule 14e-1(c) under the Exchange Act, which provides that no person
who makes a tender offer shall fail to pay the consideration offered or return
the securities deposited by or on behalf of security holders promptly after
the termination or withdrawal of the Offer.
For a withdrawal of Shares tendered pursuant to the Offer to be effective, a
written, telegraphic, telex or facsimile transmission notice of withdrawal
must be timely received by the Depositary at one of its addresses set forth on
the back cover of this Offer to Purchase. Any notice of withdrawal must
specify the name of the person who tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name in which the certificates
representing such Shares are registered, if different from that of the person
who tendered the Shares. If certificates for Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the
physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and, unless such Shares have
been tendered by an Eligible Institution, the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
tendered pursuant to the procedures for book-entry transfer set forth in
Section 3, any notice of withdrawal must also specify the name and number of
the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Shares and must otherwise comply with such Book-Entry Transfer
Facility's procedures. All questions as to the form and validity (including
time of receipt) of notices of withdrawal will be determined by the Offeror,
in its sole discretion, and its determination will be final and binding on all
parties. None of the Offeror, Parent, the Dealer Manager, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
incur any liability for failure to give any such notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to
the Expiration Date by following any of the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of certain United States federal income tax
consequences of the Offer and the Merger to beneficial owners of Shares whose
Shares are purchased pursuant to the Offer or whose Shares are converted to
cash in the Merger. The discussion is for general information only and does
not purport to consider all aspects of federal income taxation that might be
relevant to beneficial owners of Shares. The discussion is based on current
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
existing, proposed and temporary regulations promulgated thereunder and
administrative and judicial interpretations thereof, all of which are subject
to change. The discussion applies only to beneficial owners of Shares in whose
hands Shares are capital assets within the meaning of Section 1221 of the
Code, and may not apply to Shares received pursuant to the exercise of
employee stock options or otherwise as compensation, or to certain types of
beneficial owners of Shares (such as insurance companies, tax-exempt
organizations and broker-dealers) who may be subject to special rules. This
discussion does not discuss the federal income tax consequences to a
beneficial owner of Shares who, for United States federal income tax purposes,
is a non-resident alien individual, a foreign corporation, a foreign
partnership or a foreign estate or trust, nor does it consider the effect of
any foreign, state or local tax laws.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH BENEFICIAL OWNER OF SHARES
SHOULD CONSULT SUCH BENEFICIAL OWNER'S OWN TAX ADVISOR TO DETERMINE THE
APPLICABILITY OF THE RULES DISCUSSED BELOW TO SUCH BENEFICIAL OWNER AND THE
PARTICULAR TAX EFFECTS TO SUCH BENEFICIAL OWNER OF THE OFFER AND THE MERGER,
INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND OTHER TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for federal income tax purposes. In general, for federal
income tax purposes, a beneficial owner of Shares will recognize gain or loss
equal to the difference between the beneficial owner's adjusted tax basis in
the Shares sold pursuant
8
<PAGE>
to the Offer or converted to cash in the Merger and the amount of cash
received therefor. Gain or loss must be determined separately for each block
of Shares (i.e., Shares acquired at the same cost in a single transaction)
sold pursuant to the Offer or converted to cash in the Merger, although, under
proposed legislation not yet effective, gain or loss would be determined based
on the average tax basis of all Shares held by the beneficial owner. Such gain
or loss will be capital gain or loss and will be long-term capital gain or
loss if the beneficial owner held the Shares for more than one year as of the
date of sale (in the case of the Offer) or the Effective Time (in the case of
the Merger). Long-term capital gain of individuals currently is taxed at a
maximum rate of 28%. Legislation has been proposed which, if enacted, would
favorably affect the taxation of capital gains. It is uncertain whether, in
what form, and with what effective date any such legislation will be enacted.
However, the chairmen of the House Ways and Means Committee and the Senate
Finance Committee have stated their present intention that any capital gains
legislation will be effective with respect to transactions occurring on or
after May 7, 1997.
Payments in connection with the Offer or the Merger may be subject to
"backup withholding" at a rate of 31%, unless a beneficial owner of Shares (a)
is a corporation or comes within certain exempt categories and, when required,
demonstrates this fact or (b) provides a correct TIN to the payor, certifies
as to no loss of exemption from backup withholding and otherwise complies with
applicable requirements of the backup withholding rules. A beneficial owner
who does not provide a correct TIN may be subject to penalties imposed by the
Internal Revenue Service. Any amount paid as backup withholding does not
constitute an additional tax and will be creditable against the beneficial
owner's federal income tax liability. Each beneficial owner of Shares should
consult with his or her own tax advisor as to his or her qualification for
exemption from backup withholding and the procedure for obtaining such
exemption. Those tendering their Shares in the Offer may prevent backup
withholding by completing the Substitute Form W-9 included in the Letter of
Transmittal. See Section 3. Similarly, those who convert their Shares into
cash in the Merger may prevent backup withholding by completing a Substitute
Form W-9 and submitting it to the paying agent for the Merger.
Parent and the Offeror will be entitled to deduct and withhold from the
consideration otherwise payable pursuant to the Merger Agreement to any holder
of Shares such amounts as Parent or the Offeror is required to deduct and
withhold with respect to the making of such payment. To the extent that
amounts are so withheld by Parent or the Offeror, such withheld amounts shall
be treated for all purposes of the Merger Agreement as having been paid to the
holder of the Shares in respect of which such deduction and withholding was
made by Parent or the Offeror.
6. PRICE RANGE OF SHARES; DIVIDENDS.
According to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 (the "1996 10-K"), the Shares, together with the
associated Rights, are traded on the American Stock Exchange ("AMEX"). The
following table sets forth for the periods indicated the high and low sales
prices per Share on the AMEX as reported by the Company in the 1996 10-K with
respect to the years ended December 31, 1995 and December 31, 1996, and as
reported by published financial sources with respect to periods after December
31, 1996.
<TABLE>
<CAPTION>
HIGH LOW
------- --------
<S> <C> <C>
Year Ended December 31, 1995:
First Quarter.......................................... $17 $13 3/4
Second Quarter......................................... 27 15 5/16
Third Quarter.......................................... 26 3/8 21 7/8
Fourth Quarter......................................... 26 3/4 19 5/8
Year Ended December 31, 1996:
First Quarter.......................................... $25 1/8 $20 1/4
Second Quarter......................................... 28 23
Third Quarter.......................................... 35 1/2 25
Fourth Quarter......................................... 36 28 3/4
Year Ended December 31, 1997:
First Quarter.......................................... $37 1/2 $32
Second Quarter (through May 29, 1997).................. 54 5/8 33 5/8
</TABLE>
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On May 27, 1997, the last full day of trading prior to the public
announcement of the execution of the Merger Agreement, the closing price per
Share as reported on the AMEX was $47 1/2. On May 29, 1997, the last full day
of trading prior to the commencement of the Offer, the closing price per Share
as reported on the AMEX was $54 1/4. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT
MARKET QUOTATIONS FOR THE SHARES.
Since its spinoff from Louisiana-Pacific Corporation on June 6, 1988, the
Company has not paid cash dividends on its Shares.
7. CERTAIN EFFECTS OF THE TRANSACTION.
The purchase of the Shares by the Offeror pursuant to the Offer will reduce
the number of Shares that might otherwise trade publicly and will reduce the
number of holders of Shares, which will adversely affect the liquidity and
market value of the remaining Shares held by stockholders other than the
Offeror. The Company has advised the Offeror that, as of May 28, 1997, there
were approximately 10,072 holders of record and as of April 9, 1997 there were
approximately 9,088 beneficial owners of the Shares.
Market for Shares. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued inclusion
on the AMEX. According to AMEX's published guidelines, AMEX would consider
delisting such Shares if, among other things, the number of public holders of
such Shares should fall below 300, the number of publicly held Shares
(exclusive of holdings of officers, directors, their immediate families and
other concentrated holdings of 10% or more ("AMEX Excluded Holdings")) should
fall below 200,000 or the aggregate market value of publicly held Shares
(exclusive of AMEX Excluded Holdings) should fall below $1,000,000. If as a
result of the purchase of the Shares pursuant to the Offer or otherwise, the
Shares no longer meet the requirements of the AMEX for continued listing and
the Shares are no longer listed, the market for the Shares would be adversely
affected.
In the event that the Shares should no longer be listed or traded on AMEX,
it is possible that such Shares would continue to trade in the over-the-
counter market and that price quotations would be reported by other sources.
The extent of the public market for such Shares and the availability of such
quotations would, however, depend upon the number of holders of such Shares
remaining at such time, the interest in maintaining a market in Shares on the
part of securities firms, the possible termination of registration of such
Shares under the Exchange Act, as described below, and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration may be terminated upon application by the
Company to the Commission if there are fewer than 300 record holders of such
Shares. It is the intention of the Offeror to seek to cause an application for
such termination to be made as soon after consummation of the Offer as the
requirements for termination of registration of such Shares are met. If such
registration were terminated, the Company would no longer legally be required
to disclose publicly in proxy materials distributed to stockholders the
information which it now must provide under the Exchange Act or to make public
disclosure of financial and other information in annual, quarterly and other
reports required to be filed with the Commission under the Exchange Act; the
Company would no longer be subject to Rule 13e-3 under the Exchange Act
relating to "going private" transactions; and the officers, directors and 10%
stockholders of the Company would no longer be subject to the "short-swing"
insider trading reporting and profit recovery provisions of the Exchange Act.
Furthermore, if such registration were terminated, persons holding "restricted
securities" of the Company may be deprived of their ability to dispose of such
securities under Rule 144 or Rule 144A promulgated under the Securities Act of
1933, as amended (the "Securities Act").
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 has the effect, among other
10
<PAGE>
things, of allowing brokers to extend credit on the collateral of such Shares.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Shares would
no longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers. If registration of Shares under the
Exchange Act were terminated, such Shares would no longer be "margin
securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as otherwise set forth herein, the information concerning the Company
contained in this Offer to Purchase, including financial information, has been
furnished by the Company or has been taken from or based upon publicly
available documents and records on file with the Commission and other public
sources. Although neither the Offeror nor Parent has any knowledge that would
indicate that statements contained herein based upon such documents are
untrue, none of the Offeror, Parent and the Dealer Manager assume any
responsibility for the accuracy or completeness of the information concerning
the Company or for any failure by the Company to disclose events which may
have occurred or may affect the significance or accuracy of any such
information but which are unknown to the Offeror, Parent or the Dealer
Manager.
The Company is a Delaware corporation with its principal executive offices
located at 2200 Ross Avenue, Suite 3600, Dallas, Texas 75201. The Company is a
producer of residential and industrial building products including vinyl
siding and related accessories for exterior residential applications, cast
stone products, molded insulation for industrial applications, fireproofing
board used in commercial construction, metal jacketing and customized exterior
components for the manufactured housing, recreational vehicle, building and
construction and transportation/cargo industries.
Set forth below is certain summary consolidated financial data with respect
to the Company excerpted or derived from financial information contained in
the 1996 10-K, the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 and the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1997. More comprehensive financial information is
included in such reports and other documents filed by the Company with the
Commission, and the following summary is qualified in its entirety by
reference to such reports and such other documents and all the financial
information (including any related notes) contained therein. Such reports and
other documents should be available for inspection and copies thereof should
be obtainable in the manner set forth below.
FIBREBOARD CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
---------------- --------------------------
1997 1996 1996 1995 1994
-------- ------- -------- -------- --------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE
DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales....................... $115,929 $79,813 $468,938 $335,851 $141,983
Operating income................ 1,304 (284) 27,897 18,709 7,123
Income from continuing
operations..................... 1,239 (374) 15,784 9,439 3,504
Income from continuing
operations per share........... .14 (.04) 1.77 1.05 .39
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------ ------------------------------
1997 1996 1995 1994
------------ -------- ---------- ----------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Operating assets.................. $411,630 $451,976 $ 353,816 $ 362,444
Total assets...................... 590,465 688,845 1,183,880 1,174,791
Total stockholders' equity........ 290,774 292,897 239,756 145,389
</TABLE>
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,
11
<PAGE>
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 Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may also be obtained at prescribed
rates from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549. The Commission also maintains a World Wide Web
site on the internet at http://www.sec.gov that contains reports and other
information regarding registrants that file electronically with the
Commission. Such material may also be inspected at the offices of AMEX, 8
Trinity Place, New York, New York 10006.
Certain Company Projections.
To the knowledge of Parent and the Offeror, the Company does not as a matter
of course make public forecasts as to its future financial performance.
However, in connection with the preliminary discussions concerning the
feasibility of the Offer and the Merger, the Company prepared and furnished
Parent with certain financial projections.
The projections presented in the tables below (the "Projections") are
derived or excerpted from information provided by the Company and are based on
numerous assumptions concerning future events. The Projections have not been
adjusted to reflect the effects of the Offer or the Merger or the incurrence
of indebtedness in connection therewith. The Projections should be read
together with the other information contained in this Section 8.
FIBREBOARD CORPORATION
SELECTED PROJECTIONS OF FUTURE ANNUAL OPERATING RESULTS
(IN MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
1999 1998 1997
------ ---- ----
<S> <C> <C> <C>
Revenue........................................................ $1,072 $934 $739
Net Income..................................................... $ 51 $ 39 $ 30
</TABLE>
THE PROJECTIONS WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE OR
COMPLIANCE WITH THE PUBLISHED GUIDELINES OF THE COMMISSION OR THE GUIDELINES
ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
REGARDING PROJECTIONS OR FORECASTS AND ARE INCLUDED HEREIN ONLY BECAUSE SUCH
INFORMATION WAS PROVIDED TO PARENT. THESE FORWARD-LOOKING STATEMENTS ARE
SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THE PROJECTIONS. THE PROJECTIONS REFLECT NUMEROUS
ASSUMPTIONS, ALL MADE BY MANAGEMENT OF THE COMPANY, WITH RESPECT TO INDUSTRY
PERFORMANCE, GENERAL BUSINESS, ECONOMIC, MARKET AND FINANCIAL CONDITIONS AND
OTHER MATTERS INCLUDING ASSUMED INTEREST EXPENSE AND EFFECTIVE TAX RATES
CONSISTENT WITH HISTORICAL LEVELS FOR THE COMPANY, ALL OF WHICH ARE DIFFICULT
TO PREDICT, MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL AND NONE OF WHICH
WERE SUBJECT TO APPROVAL BY PARENT OR THE OFFEROR. ACCORDINGLY, THERE CAN BE
NO ASSURANCE THAT THE ASSUMPTIONS MADE IN PREPARING THE PROJECTIONS WILL PROVE
ACCURATE, AND ACTUAL RESULTS MAY BE MATERIALLY DIFFERENT FROM THOSE CONTAINED
IN THE PROJECTIONS. THE INCLUSION OF THE PROJECTIONS HEREIN SHOULD NOT BE
REGARDED AS AN INDICATION THAT ANY OF PARENT, THE OFFEROR, THE COMPANY AND
THEIR RESPECTIVE FINANCIAL ADVISORS CONSIDERED OR CONSIDER THE PROJECTIONS TO
BE A RELIABLE PREDICTION OF FUTURE EVENTS, AND THE PROJECTIONS SHOULD NOT BE
RELIED UPON AS SUCH. NONE OF PARENT, THE OFFEROR, THE COMPANY AND THEIR
RESPECTIVE FINANCIAL ADVISORS ASSUMES ANY RESPONSIBILITY FOR THE VALIDITY,
REASONABLENESS, ACCURACY OR COMPLETENESS OF THE PROJECTIONS. NONE OF PARENT,
THE OFFEROR, THE COMPANY AND ANY OF THEIR FINANCIAL ADVISORS HAS MADE, OR
MAKES, ANY REPRESENTATION TO ANY PERSON REGARDING THE INFORMATION CONTAINED IN
THE PROJECTIONS AND NONE OF THEM INTENDS TO UPDATE OR OTHERWISE REVISE THE
PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO
REFLECT THE OCCURRENCE OF FUTURE EVENTS EVEN IN THE EVENT THAT ANY OR ALL OF
THE ASSUMPTIONS UNDERLYING THE PROJECTIONS ARE SHOWN TO BE IN ERROR.
12
<PAGE>
9. CERTAIN INFORMATION CONCERNING PARENT AND THE OFFEROR.
The Offeror is a newly incorporated Delaware corporation. To date, the
Offeror has not conducted any business other than that incident to its
formation, the execution and delivery of the Merger Agreement and the
commencement of the Offer. Accordingly, no meaningful financial information
with respect to the Offeror is available. The Offeror is a wholly owned
subsidiary of Parent. The principal executive office of the Offeror is located
at One Owens Corning Parkway, Toledo, Ohio 43659.
Parent, a Delaware corporation, has its principal executive office at One
Owens Corning Parkway, Toledo, Ohio 43659. Parent serves consumers and
industrial customers with high performance glass composites and building
materials systems. These products are used in industries such as home
improvement, new construction, transportation, marine, aerospace, energy,
appliance, packaging and electronics.
Set forth below are certain summary consolidated financial data with respect
to Parent excerpted or derived from financial information contained in
Parent's Annual Report on Form 10-K for the year ended December 31, 1996,
Parent's Annual Report on Form 10-K for the year ended December 31, 1995,
Parent's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997
and Parent's Quarterly Report on Form 10-Q for the quarter ended March 31,
1996. More comprehensive financial information is included in such reports and
other documents filed by Parent with the Commission, and the following summary
is qualified in its entirety by reference to such reports and such other
documents and all the financial information (including any related notes)
contained therein.
OWENS CORNING
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------ ------------------------
1997 1996(A) 1996(B) 1995(C) 1994(D)
---- ------- ------- ------- -------
(IN MILLIONS OF DOLLARS, EXCEPT PER
SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............................... $875 $849 $3,832 $3,612 $3,351
Net income (loss)....................... 42 39 (284) 231 159
Net income (loss) per share (primary)... .79 .75 (5.50) 4.64 3.61
Net income (loss) per share (fully
diluted)............................... .76 .73 (5.50) 4.40 3.35
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
------------ -------------------
1997 1996 1995 1994
------------ ----- ----- -----
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total current assets....................... 1,107 958 927 930
Total assets............................... 4,107 3,913 3,261 3,274
Total assets less excess costs of assets
acquired over book value.................. 3,806 3,627 3,012 3,123
Total current liabilities.................. 1,044 1,121 936 1,073
Total debt................................. 1,235 934 893 1,212
Total MIPS................................. 194 194 194 --
Stockholders' equity (deficit)............. (414) (484) (212) (680)
</TABLE>
- --------
(a) Income from operations for the three months ended March 31, 1996 includes
an after-tax gain of $27 million or $.52 per share from the sale of an
ownership interest in the former Japanese affiliate Asahi Fiber Glass Co.
Ltd, as well as other one time special charges totaling $27 million or,
$.52 per share after-tax which include valuation adjustments associated
with prior divestitures, major product line productivity initiatives and a
contribution to the Owens-Corning Foundation.
(b) Additionally, in 1996 the net loss of $284 million, or $5.50 per share,
includes the items noted in (a) as well as a net after-tax charge of $542
million, or $10.49 per share, for asbestos litigation claims that may be
received after 1999 and probable additional insurance recovery; an after-
tax charge of $26 million, or $.50 per share, for restructuring and other
actions; and a $27 million, or $.52 per share, reduction of tax reserves
due to favorable legislation.
13
<PAGE>
(c) Net income for 1995 of $231 million, or $4.64 per share ($4.40 per share
fully diluted), included a one time gain of $8 million or $.16 per share
($.15 per share fully diluted), which was the result of a tax loss
carryback.
(d) Net income for 1994 of $159 million included the following special items:
an after-tax gain of $123 million, or $2.78 per share ($2.45 per share
fully diluted), reflecting a change to the capital method of accounting
for the rebuilding of glass melting facilities; an after-tax charge of $85
million, or $1.92 per share ($1.69 per share fully diluted), for
productivity initiatives and other actions; a non-cash, after-tax charge
of $10 million, or $.23 per share ($.20 per share fully diluted), to
reflect adoption of Statement of Financial Accounting Standards (SFAS) No.
106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions" for Parent's non-U.S. plans; and a non-cash, after-tax charge of
$28 million, or $.63 per share ($.56 per share fully diluted), to reflect
adoption of SFAS No. 112, "Employers' Accounting for Postemployment
Benefits."
Parent is subject to the informational requirements of the Exchange Act and
in accordance therewith files periodic reports and other information with the
Commission relating to its business, financial condition and other matters.
Such reports and other information are available for inspection and copying at
the offices of the Commission in the same manner as set forth with respect to
the Company in Section 8. Such material may also be inspected at the offices
of the NYSE, 20 Broad Street, New York, New York 10005.
The name, citizenship, business address, present principal occupation and
material positions held during the past five years of each of the directors
and executive officers of Parent and the Offeror are set forth in Annex I to
this Offer to Purchase.
Except as described in this Offer to Purchase, none of the Offeror, Parent,
or to the best knowledge of the Offeror or Parent, any of the persons listed
in Annex I hereto, owns or has any right to acquire any Shares and none of
them has effected any transaction in the Shares during the past 60 days.
Except as set forth in this Offer to Purchase, none of the Offeror, Parent
or, to the best knowledge of the Offeror or Parent, any of the persons listed
in Annex 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, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any
such securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies. Except as set forth in this Offer to Purchase, there have been no
contacts, negotiations or transactions between the Offeror or Parent, or, to
the best of their knowledge, any of the persons listed in Annex I hereto, on
the one hand, and the Company or 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 a sale or other transfer of a material
amount of assets. Except as described in this Offer to Purchase, none of the
Offeror, Parent or, to the best knowledge of Parent or the Offeror, any of the
persons listed in Annex I hereto, has had any transaction with the Company or
any of its executive officers, directors or affiliates that would require
disclosure under the rules and regulations of the Commission applicable to the
Offer.
10. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Offeror to consummate the Offer
and the Merger is expected to be approximately $513 million, which amount
excludes related fees and expenses. The Offeror plans to obtain the necessary
funds under the Credit Facility (as defined below).
Parent has received a written financing commitment (the "Commitment Letter")
from Credit Suisse First Boston ("CSFB") in the aggregate principal amount of
$2 billion (the "Credit Facility"). Although CSFB has committed to provide the
entire Credit Facility, CSFB expects to assemble a syndicate of financial
institutions (the "Lenders") prior to the initial funding under the Credit
Facility. The terms of the definitive agreement providing for the Credit
Facility (the "Loan Agreement") have not yet been finalized. The following is
a
14
<PAGE>
summary of the anticipated principal terms of the Credit Facility based upon
the Commitment Letter. This summary is subject to finalizing of the Loan
Agreement and is qualified in its entirety by reference to the Commitment
Letter, which is filed as an exhibit to the Schedule 14D-1 of which this Offer
to Purchase is an exhibit.
The Credit Facility consists of a revolving loan facility under which loans
may be borrowed, repaid and reborrowed by Parent (and certain of its
subsidiaries) from time to time for the purpose of providing funds to
consummate the Offer and the Merger, to refinance certain indebtedness, to pay
certain fees and expenses incurred in connection with the Offer and the Merger
and to provide working capital and for other general corporate purposes.
The Credit Facility will mature in five years. The Credit Facility will have
no scheduled amortization, but the aggregate principal amount that may be
borrowed thereunder will be reduced (i) to the extent that a portion of the
Credit Facility is not used within six months to refinance certain other
indebtedness of Parent and its subsidiaries unless Parent then has an
investment grade senior long-term debt rating and (ii) in an amount equal to
the net cash proceeds of certain issuances of additional indebtedness and/or
equity by Parent or its subsidiaries up to a maximum of $200 million. The
Credit Facility is unsecured, but will be guaranteed by Parent and certain of
its subsidiaries.
Borrowings under the Credit Facility will bear interest at a floating rate
based upon, at the borrower's option, (i) the higher of CSFB's prime rate or
the Federal funds rate plus 0.50% per annum, or (ii) the London Interbank
Offered Rate ("LIBOR") plus 1% per annum, pending confirmation of Parent's
senior long-term debt rating or issuance of a new rating with respect to such
debt, and thereafter LIBOR plus spreads ranging from 0.20% to 0.525% per
annum, depending upon Parent's senior long-term debt rating, plus, in each
case, a utilization fee. The utilization fee will be applicable when more than
50% of the Credit Facility is drawn and is either 0.25% or 0% per annum,
depending upon Parent's senior long-term debt rating. In addition, Parent will
have a competitive advance option under the Credit Facility which will allow
it to request uncommitted advances from the Lenders at competitive rates on an
auction basis. A facility fee will accrue on the total Credit Facility
regardless of usage at a rate ranging from 0.10% to 0.35% per annum, depending
upon Parent's senior long-term debt rating. Parent will also pay CSFB
underwriting and administration fees, reimburse certain expenses and provide
certain indemnities, all of which Parent believes to be customary for
commitments of this type.
The Loan Agreement will contain conditions precedent, representations and
warranties, covenants (including financial covenants), events of default and
other provisions customary for such financings.
CSFB's commitment to provide the Credit Facility is conditioned on, among
other things: the signing of the Loan Agreement on or before July 31, 1997;
evidence satisfactory to CSFB that requisite legal and regulatory approvals
for the Offer and the Merger have been obtained; the absence of a material
adverse change in the business, assets, liabilities, condition (financial or
otherwise), results of operations or prospects of Parent and its subsidiaries
on a consolidated basis or the Company and its subsidiaries on a consolidated
basis (in each case from that reflected in the December 31, 1996 financial
statements for each such entity); the absence of any material change in or
disruption of financial, banking or capital market conditions that in CSFB's
reasonable opinion would materially and adversely affect the satisfactory
syndication of the Credit Facility; all material conditions to the Offer
(including the Minimum Condition) being satisfied and the purchase of validly
tendered Shares concurrently with the initial borrowing under the Credit
Facility; and the concurrent repayment of Parent's existing $475 million
credit facility and Cdn. $135 million credit facility and all existing credit
facilities of the Company and its subsidiaries.
It is anticipated that the indebtedness incurred through borrowings under
the Credit Facility will be repaid from funds generated internally by Parent
and its subsidiaries, including 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 Parent will employ to repay such indebtedness. Such decisions when made
will be based on Parent's review from time to time of the advisability of
particular actions, as well as on prevailing interest rates and financial and
other economic conditions.
15
<PAGE>
11. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH
THE COMPANY.
On April 17, 1997, management of Parent presented an overview to Parent's
board of directors regarding a possible business combination with the Company.
Thereafter, Glen H. Hiner, Chairman of the Board and Chief Executive Officer
of Parent, contacted John D. Roach, Chairman, President and Chief Executive
Officer of the Company, and inquired whether the Company would be interested
in discussing a possible business combination transaction. On April 24, 1997,
Messrs. Hiner and Roach met in San Antonio, Texas. At such meeting, Mr. Hiner
discussed Parent's preliminary views on possible valuations of the Company and
discussed the desire of Parent to conduct certain due diligence reviews with
respect to the Company. Mr. Hiner indicated that Parent desired to evaluate
further a possible business combination with the Company at a price of $50.00
per Share, subject to satisfactory completion of due diligence, necessary
board approvals and negotiation of acceptable contractual terms. After
discussions regarding the situation between management of the Company and its
Board of Directors at a telephonic meeting on April 28, 1997, the Company
acknowledged that, although Parent's preliminary valuation warranted further
evaluation by the Company and its advisors, the Company would be willing to
provide Parent an opportunity to conduct due diligence with respect to the
Company.
On April 30, 1997, Parent and the Company executed a confidentiality and
standstill agreement relating to the Company. Thereafter, the Company made
certain due diligence materials available to Parent and its advisors.
On May 5, 1997, representatives of Parent attended a presentation by
representatives of the Company with respect to the Company's asbestos-related
litigation. On May 6, 1997, representatives of Parent, including Merrill
Lynch, attended a presentation made by the Company's management in Dallas
regarding the Company's business. A due diligence meeting with selected
members of management of Parent and the Company was held in Dallas on May 9,
1997. During the weeks of May 12 and May 19, representatives of Parent
conducted a further due diligence review of information provided by the
Company, including various information regarding the Company's asbestos-
related litigation. During this period, representatives of Parent also visited
certain major manufacturing and distribution facilities of the Company. In the
course of the discussions during such period, the Company's advisors
communicated to Parent that a price of $50.00 per Share was not likely to be
acceptable to the Company's Board of Directors in connection with a sale of
the Company.
On May 16, 1997, the Board of Directors of Parent reviewed the status of
Parent's evaluation of the Company, and authorized Parent's management to
commence formal negotiations with respect to the possible acquisition by
Parent of all outstanding shares of capital stock of the Company. Later that
day, Mr. Hiner contacted Mr. Roach and proposed such an acquisition at a price
of $52.00 per Share in cash, subject to final board approval and negotiation
of an acceptable merger agreement. In the evening of May 16, Parent's legal
advisors delivered to the Company and its advisors a draft of a proposed
merger agreement. Among other things, the proposed merger agreement
contemplated that the Company grant to Parent a stock option for 19.9% of the
Common Stock in addition to providing for termination fee and expense
reimbursement provisions.
On May 19, 1997, the Board of Directors of the Company held a meeting to
consider Parent's proposal, at which management of the Company discussed the
business and prospects of the Company and alternatives to the proposed
transaction with Parent. At such meeting, Dillon Read also made an extensive
financial presentation, including background information and various financial
analyses. After discussion of such factors, including the economic and other
uncertainties inherent in the Company's business, the Board rejected the
$52.00 per Share proposal, but instructed management and the Company's
financial and legal advisors to pursue discussions with Parent in order to
determine if an acceptable price and merger agreement could be negotiated.
During the week of May 19, 1997, the respective financial and legal advisors
of Parent and the Company held various discussions regarding the economic and
contractual terms of a possible transaction. These discussions culminated in
the submission by Parent, on May 23, 1997, of a revised proposal to purchase
all of the capital stock of the Company at a cash purchase price of $55.00 per
Share, without the aforementioned stock option, subject to board approval and
the negotiation of a satisfactory merger agreement.
16
<PAGE>
During the period of May 23, 1997 through May 27, 1997, negotiations
continued on the terms of a possible transaction and revised drafts of the
proposed merger agreement were delivered, reviewed and negotiated.
In the afternoon of May 27, 1997, the Board of Directors of Parent held a
meeting during which it reviewed and approved the Offer and the Merger
Agreement. Also in the afternoon of May 27, 1997, the Board of Directors of
the Company met to consider Parent's revised proposal and the terms of the
Merger Agreement. At such meeting, the Board of Directors of the Company
considered reports from the Company's financial advisors, as well as the terms
of the Merger Agreement, including provisions relating to the ability of the
Company to consider unsolicited third party proposals and to terminate the
Merger Agreement, under certain circumstances, consistent with the fiduciary
responsibilities of the Board of Directors. Dillon Read then delivered its
opinion to the Board of Directors of the Company to the effect that, as of the
date of such opinion, the per Share consideration to be offered to the
Company's stockholders in the Offer and the Merger is fair, from a financial
point of view, to such stockholders. After discussion and analysis, the Board
of Directors of the Company unanimously approved the Merger Agreement. After
the respective meetings of the Boards of Directors of Parent and the Company,
Parent, the Offeror and the Company executed and delivered the Merger
Agreement.
Before the opening of trading on the NYSE and AMEX on the morning of May 28,
1997, Parent and the Company issued a joint press release announcing the
signing of the definitive Merger Agreement.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY.
The purpose of the Offer, the Merger, the Merger Agreement and the other
transactions contemplated thereby, is to enable Parent to acquire control of,
and the entire equity interest in, the Company.
Pursuant to the DGCL and the Certificate of Incorporation (the "Charter") of
the Company, adoption by the Board of Directors of the Company and the
affirmative vote of the holders of a majority of the outstanding shares of the
Company entitled to vote thereon and, if a class or series is entitled to vote
as a class, the affirmative vote of the holders of a majority of the
outstanding shares of the class or series, is required to approve the Merger
Agreement. The Board of Directors of the Company has unanimously approved the
Offer, the Merger and the Merger Agreement, and, unless the Merger is
consummated pursuant to the short form merger provisions under the DGCL as
described below, the only remaining required corporate action of the Company
is the approval of the Merger Agreement by the affirmative vote of the holders
of a majority of the outstanding Shares. If the Minimum Condition is
satisfied, the Offeror will have sufficient voting power to cause the approval
of the Merger Agreement without the affirmative vote of any other stockholder.
In the Merger Agreement, the Company has agreed that, if approval of the
Merger by stockholders of the Company is required by law, the Company shall,
at Parent's request, as soon as practicable following expiration of the Offer
in accordance with the Merger Agreement, so long as permitted by law, duly
call, give notice of, convene and hold a meeting of its stockholders for the
purpose of obtaining the stockholders' approval. Parent has agreed that all
Shares owned by the Offeror or any other subsidiary of Parent will be voted in
favor of approval of the Merger Agreement. The stockholders meeting shall be
held as soon as practicable following the purchase of Shares pursuant to the
Offer. If the Offeror owns a majority of the outstanding Shares, approval of
the Merger Agreement can be obtained without the affirmative vote of any other
stockholder of the Company.
Short Form Merger. Under the DGCL, if the Offeror acquires at least 90% of
the outstanding Shares, the Offeror will be able to approve the Merger without
a vote of the Company's stockholders. In such event, the Offeror anticipates
that it will take all necessary and appropriate action to cause the Merger to
become effective as soon as reasonably practicable after such acquisition
without a meeting of the Company's stockholders. If the conditions to the
Offeror's obligation to purchase Shares in the Offer are satisfied prior to
the tender of 90% of the outstanding Shares being tendered in the Offer, the
Offeror may, subject to certain limitations set forth in the Merger Agreement,
delay its purchase of the Shares tendered to it in the Offer. See Section 1.
If the Offeror does
17
<PAGE>
not acquire at least 90% of the outstanding Shares pursuant to the Offer or
otherwise, a significantly longer period of time may be required to effect the
Merger, because a vote of the Company's stockholders would be required under
the DGCL. Pursuant to the Merger Agreement, the Company has agreed to take all
action necessary under the DGCL and its Charter and Bylaws to convene a
meeting of its stockholders promptly following consummation of the Offer to
consider and vote on the Merger, if a stockholders' vote is required. If the
Offeror owns a majority of the outstanding Shares, approval of the Merger can
be obtained without the affirmative vote of any other stockholder of the
Company.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders of the Company will
have certain rights under the DGCL to dissent and demand appraisal of and to
receive payment in cash for the fair value of their Shares. Such rights to
dissent, if the statutory procedures are complied with, could lead to a
judicial determination of the fair value of the Shares (excluding any element
of value arising from the accomplishment or expectation of the Merger)
required to be paid in cash to such dissenting holders of their Shares. In
addition, such dissenting stockholders may be entitled to receive payment of a
fair rate of interest from the date of consummation of the Merger on the
amount determined to be the fair value of their Shares. In determining the
fair value of the Shares, a Delaware court would be required to take into
account all relevant factors. Accordingly, such determination could be based
upon considerations other than, or in addition to, the market value of the
Shares, including, among other things, asset values and earning capacity. In
Weinberger v. UPO, Inc., the Delaware Supreme Court stated, among other
things, that "proof of value by any techniques or methods which are generally
considered acceptable in the financial community and otherwise admissible in
court" should be considered in an appraisal proceedings. Therefore, the value
so determined in any appraisal could be different from the price being paid in
the Offer.
In addition, several decisions by Delaware courts have held that, in certain
circumstances, a controlling stockholder of a company involved in a merger has
a fiduciary duty to other stockholders which requires that the merger be fair
to such other stockholders. In determining whether a merger is fair to
minority stockholders, Delaware courts have considered, among other things,
the type and amount of consideration to be received by the stockholders and
whether there was fair dealing among the parties. The Delaware Supreme Court
stated in Weinberger and Rablin v. Philip A. Hunt Chemical Corp. that although
the remedy ordinarily available to minority stockholders in a cash-out merger
is the right to appraisal described above, a damages remedy or injunctive
relief may be available if a merger is found to be the product of procedural
unfairness, including fraud, misrepresentation or other misconduct.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may,
under certain circumstances, be applicable to the Merger or another business
combination in which the Offeror seeks to acquire the remaining Shares not
held by it following the purchase of Shares pursuant to the Offer. The Offeror
believes, however, that Rule 13e-3 will not be applicable to the Merger if the
Merger is consummated within one year after the termination of the Offer at
the Offer Price. If applicable, Rule 13e-3 requires, among other things, that
certain financial information concerning the Company and certain information
relating to the fairness of the proposed transaction and the consideration
offered to minority stockholders in such transaction be filed with the
Commission and disclosed to stockholders prior to consummation of the
transaction.
Plans for the Company. Parent will continue to evaluate the business and
operations of the Company during the pendency of the Offer and after the
consummation of the Offer and the Merger. Parent intends to seek additional
information about the Company during this period. Thereafter, Parent intends
to review such information as part of a comprehensive review of the Company's
business, operations, capitalization and management with a view to optimizing
the Company's potential contribution to Parent's business.
Except as indicated in this Offer to Purchase, Parent does not have any
current plans or proposals which relate to or would result in any of the
following: an extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Company or any of its
subsidiaries; a sale or transfer of a material
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amount of assets of the Company or any of its subsidiaries; any change in the
present Board of Directors or management of the Company; any material change
in the Company's present capitalization or dividend policy; or any other
material change in the Company's corporate structure or business.
Notwithstanding the foregoing, following the acquisition of Shares pursuant to
the Offer, the Offeror may designate up to that number of directors of the
Board of Directors of the Company as will make the percentage of the Company's
directors designated by the Offeror equal to the aggregate voting power of the
Shares held by Parent and any of its subsidiaries. In addition, assuming the
designation of directors as aforesaid and so long as there are holders of
Shares other than Parent or any of its subsidiaries, Parent expects that the
Board of Directors would not declare dividends on the Shares.
13. THE MERGER AGREEMENT.
The following summary of certain provisions of the Merger Agreement, a copy
of which is filed as an exhibit to the Schedule 14D-1, is qualified in its
entirety by reference to the text of the Merger Agreement.
The Merger Agreement
The Offer. The Offeror commenced the Offer in accordance with the terms of
the Merger Agreement. Pursuant to the terms and conditions of the Merger
Agreement, each of the Company, Parent and the Offeror have agreed, subject to
certain exceptions, to use its reasonable best efforts to cause the purchase
of Shares pursuant to the Offer and the consummation of the Merger to occur as
soon as reasonably practicable. Without limiting the foregoing, each of the
Company, Parent and the Offeror have agreed to use its reasonable best efforts
to take, or cause to be taken, all actions necessary to comply promptly with
all legal requirements that may be imposed on itself with respect to the Offer
and the Merger and shall promptly cooperate with and furnish information to
each other in connection with any such requirements imposed upon any of them
in connection with the Offer and the Merger. In addition, neither Parent nor
any of its subsidiaries is obligated in connection with obtaining any required
HSR Act or other governmental approvals to divest or hold separate or to
otherwise take or commit to take any action that limits its freedom of action
with respect to, or its ability to retain, the Company or any of the
businesses, product lines or assets of Parent or any of its subsidiaries or
that would have a material adverse effect on Parent. Pursuant to the Merger
Agreement, the Offeror expressly reserves the right to modify the terms of the
Offer, except that, without the prior written consent of the Company, the
Offeror shall not (i) reduce the number of Shares to be purchased in the
Offer, (ii) reduce the Offer Price, (iii) impose any conditions to the Offer
in addition to the conditions to the Offer as set forth in this Offer to
Purchase (see Section 15) or modify such conditions (other than to waive any
condition to the extent permitted by the Merger Agreement), (iv) except as
provided in the next sentence, extend the Offer, (v) change the form of
consideration payable in the Offer or (vi) make any other change or
modification in any of the terms of the Offer in any manner that is adverse to
the holders of Shares. Notwithstanding the foregoing, the Offeror may, without
the consent of the Company, (i) extend the Offer, if at the scheduled
expiration date of the Offer any of the conditions to the Offer shall not be
satisfied or waived, until such time as such conditions are satisfied or
waived, (ii) extend the Offer for any period required by any rule, regulation,
interpretation or position of the Commission or the staff thereof applicable
to the Offer and (iii) extend the Offer for a period of up to five business
days if, on any scheduled expiration date on which the conditions to the Offer
shall have been satisfied or waived, the number of Shares that have been
validly tendered and not withdrawn represent more than 70% of the voting power
of the Shares (on a fully diluted basis), but less than 90% of the voting
power of the then issued and outstanding Shares. The Merger Agreement further
provides that in the event that the Offeror would otherwise be entitled to
terminate the Offer at any scheduled expiration date thereof due to the
failure of one or more of the conditions to the Offer, unless the Merger
Agreement shall have been terminated pursuant to its terms, the Offeror shall,
and Parent shall cause the Offeror to, extend the Offer until such date as the
conditions to the Offer have been satisfied or such later date as required by
applicable law but not beyond November 30, 1997.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions of the Merger Agreement, and in accordance with the DGCL,
the Offeror shall be merged with and into the Company
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at the Effective Time. Following the Merger, the separate corporate existence
of the Offeror shall cease and the Company shall continue as the Surviving
Corporation and shall succeed to and assume all the rights and obligations of
the Offeror and the Company in accordance with the DGCL. At the Effective
Time, the Charter, as amended as of the Effective Time, and Bylaws of the
Company shall be the Charter and Bylaws of the Surviving Corporation. The
directors of the Offeror shall become the directors of the Surviving
Corporation and the officers of the Company shall become the officers of the
Surviving Corporation.
Conversion of Securities. As of the Effective Time, by virtue of the Merger
and without any action on the part of the Offeror, the Company or the holders
of any securities of the Offeror or the Company, each Share (other than Shares
owned by the Company, any subsidiary of the Company, Parent, the Offeror, any
other subsidiary of Parent or by stockholders, if any, who are entitled to and
who properly exercise appraisal rights under the DGCL) shall be converted into
the right to receive from the Surviving Corporation, in cash, without
interest, the Offer Price. Each share of stock of the Offeror issued and
outstanding immediately prior to the Effective Time shall, at the Effective
Time, by virtue of the Merger and without any action on the part of the holder
of any shares of stock of the Offeror, be converted into and become one fully
paid and nonassessable Share, $.01 par value, of the Surviving Corporation.
Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to Parent and the Offeror. The
representations and warranties of the Company relate, among other things, to
its organization and qualification; subsidiaries; capital structure; authority
to enter into the Merger Agreement and to consummate the transactions
contemplated thereby; required consents and approvals; filings made by the
Company with the Commission under the Securities Act or the Exchange Act
(including financial statements included in the documents filed by the Company
under these acts); absence of any material adverse change; compliance with
laws; tax matters; liabilities; benefit plans and employees and employment
practices; litigation; environmental matters; state takeover statutes and the
execution of an amendment to the Rights Agreement; and asbestos related
matters.
The Offeror and Parent have also made customary representations and
warranties to the Company. Representations and warranties of the Offeror and
Parent relate, among other things, to: their organization and authority to
enter into the Merger Agreement and to consummate the transactions
contemplated thereby; required consents and approvals; and financing.
Covenants Relating to the Conduct of Business. During the period from the
date of the Merger Agreement to such time as Parent's designees shall
constitute a majority of the Board of Directors of the Company, the Company
has agreed that it will, and will cause its subsidiaries to, in all material
respects, except as contemplated by the Merger Agreement, carry on its
business in the ordinary course of its business as currently conducted and, to
the extent consistent therewith, use reasonable efforts to preserve intact its
current business organizations, keep available the services of its current
officers and key employees and preserve its present relationships with
customers, suppliers and others having significant business dealings with it.
The Company has agreed that, except as otherwise expressly contemplated by the
Merger Agreement, during such period, except as contemplated by the Merger
Agreement, the Company will not, and will not permit any of its subsidiaries
to, without the prior written consent of Parent (which consent shall not be
unreasonably withheld or delayed):
(a) (x) declare, set aside or pay any dividends on, or make any other
actual, constructive or deemed distributions in respect of, any of its
capital stock, or otherwise make any payments to its stockholders in their
capacity as such (other than the payment by a subsidiary of the Company of
a dividend or distribution to the Company or another wholly owned
subsidiary of the Company), (y) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock,
or (z) purchase, redeem or otherwise acquire any shares of its capital
stock or those of any subsidiary or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities;
(b) except as set forth in the letter from the Company to Parent dated
the date of the Merger Agreement and except as required under existing
employee benefit plans, agreements, policies, awards or arrangements
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in effect on the date of the Merger Agreement including, without
limitation, the Company Stock Options (as defined below), issue, deliver,
sell, pledge, dispose of or otherwise encumber any shares of its capital
stock, any other voting securities or equity equivalent or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities, equity equivalent or convertible securities
(other than pursuant to the Rights Agreement and other than issuances to a
wholly owned subsidiary of the Company of its capital stock to the
Company);
(c) amend its Charter or Bylaws or other similar organizational
documents;
(d) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of or equity in, or by any
other manner, any business or any corporation, partnership, limited
liability company, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets, other than
transactions that are (i) in the ordinary course of business consistent
with past practice, (ii) which involve assets having a purchase price not
in excess of $1,000,000 individually or $5,000,000 in the aggregate or
(iii) acquisitions or purchases of assets to the extent permitted by
paragraph (n) below;
(e) other than settling disputes with the Company's insurance carriers in
connection with insurance for asbestos-related property damage and other
claims (excluding personal injury asbestos claims), sell, lease, encumber
or otherwise dispose of, or agree to sell, lease, encumber or otherwise
dispose of, any of its assets, other than transactions that are in the
ordinary course of business consistent with past practice or which involve
assets which in the aggregate are not in excess of $2,000,000;
(f) incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or warrants or rights to
acquire any debt securities of the Company or any of its subsidiaries,
guarantee any debt securities of others, enter into any "keep-well" or
other agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any of
the foregoing, except for borrowings incurred in the ordinary course of
business consistent with past practice not to exceed $2,000,000 in the
aggregate or non-acquisition-related borrowings under existing credit
facilities not to exceed $10,000,000 in the aggregate, or make any loans,
advances or capital contributions to, or other investments in, any other
person, other than to or in the Company or any wholly owned subsidiary of
the Company;
(g) except as set forth in the letter from the Company to Parent dated
the date of the Merger Agreement, alter (through merger, liquidation,
reorganization, restructuring or in any other fashion) the corporate
structure or ownership of the Company or any subsidiary of the Company;
(h) except as set forth in the letter from the Company to Parent dated
the date of the Merger Agreement, increase the compensation payable or to
become payable to its directors, officers or employees, except for
increases required under employment agreements existing on the date hereof,
and increases for officers and employees in the ordinary course of business
consistent with past practice, or grant any severance or termination pay
to, or enter into any employment or severance agreement, or establish,
adopt, enter into, or amend or take action to enhance or accelerate any
rights or benefits under, any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee, except, in each case, as may be required by
the terms of any such plan, agreement, trust, fund, policy or arrangement
or to comply with applicable law or regulation;
(i) knowingly violate or fail to perform any material obligation or duty
imposed upon it by any applicable material federal, state or local law,
rule, regulation, guideline or ordinance;
(j) except as set forth in paragraphs (q) or (r) below, settle or
compromise any suit, proceeding or claim or threatened suit, proceeding or
claim for an amount that is more than $100,000 in the case of any
individual suit, proceeding or claim or $250,000 for all suits, proceedings
or claims;
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(k) except to the extent required by law or agreed to by Parent, (i)
compromise any material tax liability or (ii) prepare or file any material
tax return inconsistent with past practice or, on any such material tax
return or otherwise, take any position, make any material election, or
adopt any material accounting method that is inconsistent with positions
taken, elections made or methods used in preparing or filing similar tax
returns;
(l) redeem the Rights or, other than as contemplated by the Merger
Agreement, amend the Rights Agreement;
(m) except as may be required as a result of a change in law or in
generally accepted accounting principles, make any material change in its
methods of accounting;
(n) make or agree to make any new capital expenditure or expenditures not
previously finally committed to that, individually, exceeds $2,500,000;
provided, however, that as to any individual capital expenditure in an
amount equal to or greater than $1,000,000 but less than or equal to
$2,500,000, the Company will consult with Parent (it being understood that
no consent is required under the Merger Agreement);
(o) except as permitted by paragraph (j) above or paragraph (q) or (r)
pay, discharge, settle or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge, settlement or satisfaction, (i) in the
ordinary course of business consistent with past practice or in accordance
with their terms, of liabilities recognized or disclosed in the most recent
consolidated financial statements (or the notes thereto) of the Company
included in the documents filed by the Company pursuant to the Securities
Act or the Exchange Act or incurred since the date of such financial
statements in the ordinary course of business consistent with past practice
or (ii) of liabilities required to be paid, discharged or satisfied
pursuant to the terms of any contract in existence on the date of the
Merger Agreement;
(p) excluding contracts covered by paragraphs (q) or (r) below, enter
into, modify in any material respect, amend in any material respect or
terminate any material contract or agreement to which the Company or any of
its subsidiaries is a party or waive (except to the extent permitted by the
Section entitled "Third Party Standstill Agreements" below), release or
assign any material rights or claims except to the extent permitted by the
Merger Agreement;
(q) except to the extent permitted by the letter from the Company to
Parent dated the date of the Merger Agreement, modify, waive or amend, or
consent to any modification, waiver or amendment of, any provision of the
Asbestos Agreements (as defined in the Merger Agreement);
(r) enter into any agreement, or make any commitment, for the resolution
of any asbestos personal injury lawsuits or for the payment of any
settlement monies, fees, costs or disbursements relating thereto exceeding
$12.5 million in the aggregate per 30 day period after the date of the
Merger Agreement unless (i) any payments in respect of such agreements or
commitments would be made entirely from funds provided by the Company's
insurance carriers and (ii) would not, in the event of Global Court
Disapproval (as defined in the Merger Agreement), result in a reduction or
commitment of the amounts otherwise payable to the Company pursuant to the
Trilateral Settlement Agreement (as defined in the Merger Agreement);
provided, however, that the Company may, without regard to the restriction
set forth in this paragraph (r), pay and discharge, and agree to pay and
discharge, any claims with Outstanding Offers and Interim Claims (as
defined in the Merger Agreement); or
(s) authorize, recommend, propose or announce an intention to do any of
the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
No Solicitation. The Merger Agreement provides that the Company shall not,
nor shall it permit any of its subsidiaries to, nor shall it authorize or
permit any of its officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
or any of its subsidiaries to, directly or indirectly, (1) solicit, initiate
or knowingly encourage (including by way of furnishing information), any
inquiries or the making of any proposal which constitutes, or may reasonably
be expected to lead to, any
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Takeover Proposal or (2) participate in any discussions or negotiations
regarding any Takeover Proposal; provided, however, that if, at any time prior
to the acceptance for payment of Shares pursuant to the Offer, the Board of
Directors of the Company determines in good faith, after consultation with
outside counsel, that it would be consistent with its fiduciary
responsibilities to the Company's stockholders under applicable law, the
Company may, in response to a Takeover Proposal which was not solicited
subsequent to the date of the Merger Agreement, and subject to compliance with
the notification provisions discussed below, (i) furnish information with
respect to the Company to any person pursuant to a confidentiality agreement
in substantially the same form as the confidentiality agreement entered into
between the Company and Parent (other than for provisions similar to Section 6
thereof) and (ii) participate in discussions, investigations and/or
negotiations regarding such Takeover Proposal. The Merger Agreement defines
"Takeover Proposal" as any inquiry, proposal or offer from any person relating
to any direct or indirect acquisition or purchase of 20% or more of the
aggregate assets of the Company and its subsidiaries, taken as a whole, or 20%
or more of the voting power of the Shares then outstanding or any tender offer
or exchange offer that if consummated would result in any person beneficially
owning 20% or more of the voting power of the Shares then outstanding or any
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company other than the
transactions contemplated by the Merger Agreement.
The Merger Agreement provides further that, except as described below,
neither the Board of Directors of the Company nor any committee thereof shall
(i) withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Parent, the approval or recommendation by such Board of Directors
or such committee of the Offer, the Merger or the Merger Agreement; provided
that, the Board of Directors of the Company may, (A) in response to any
Takeover Proposal, suspend such recommendation for a period of up to 24 hours
pending its analysis of such Takeover Proposal or (B) at any time prior to the
consummation of the Offer, modify or withdraw such recommendation if the Board
of Directors of the Company determines in good faith, after consultation with
outside counsel, that it would be consistent with its fiduciary
responsibilities to so modify or withdraw such recommendation (regardless of
the existence of a Superior Proposal (as defined below) at such time);
provided further that, unless the Merger Agreement shall have been terminated,
any such suspension, modification or withdrawal shall not prevent Parent and
the Offeror, in its or their discretion, from consummating the Offer and shall
not affect any of the actions taken by the Company pursuant to the provisions
of the Merger Agreement relating to state takeover statutes and the Rights
Agreement, (ii) approve or recommend, or propose publicly to approve or
recommend, any Takeover Proposal or (iii) cause the Company to enter into any
letter of intent, agreement in principle, acquisition agreement or other
similar agreement (each, an "Acquisition Agreement") related to any Takeover
Proposal. Notwithstanding the foregoing, in the event that prior to the
acceptance for payment of Shares pursuant to the Offer the Board of Directors
of the Company determines in good faith, after consultation with outside
counsel, that it would be consistent with its fiduciary responsibilities to
the Company's stockholders under applicable law, such Board of Directors may
(subject to the other provisions regarding Takeover Proposals described
herein) withdraw or modify its approval or recommendation of the Offer, the
Merger and the Merger Agreement, approve or recommend a Superior Proposal (as
defined below) or terminate the Merger Agreement, but in each case, only at a
time after the second business day following Parent's receipt of written
notice (a "Notice of Superior Proposal") (which obligation may be satisfied by
the delivery of the notice described in the next succeeding paragraph)
advising Parent that the Board of Directors of the Company has received a
Takeover Proposal that may constitute a Superior Proposal, specifying the
material terms and conditions of such Superior Proposal and identifying the
person making such Superior Proposal. For purposes of the Merger Agreement, a
"Superior Proposal" means any proposal determined by the Board of Directors of
the Company in good faith, after consultation with outside counsel, to be a
bona fide proposal and made by a third party to acquire, directly or
indirectly, for consideration consisting of cash, property and/or securities,
more than 50% of the combined voting power of the Shares then outstanding or
all or substantially all the assets of the Company and otherwise on terms
which the Board of Directors of the Company determines in its good faith
judgment, after consultation with outside counsel and with a financial advisor
of nationally recognized reputation (such as Dillon Read), to be more
favorable to the Company's stockholders than the Offer and the Merger.
In addition to the obligations of the Company described in the preceding two
paragraphs, the Merger Agreement provides that the Company shall promptly
advise Parent orally and in writing of any request for
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information or of any Takeover Proposal, the material terms and conditions of
such request or Takeover Proposal and the identity of the person making any
such request or Takeover Proposal. The Company is further required under the
terms of the Merger Agreement to endeavor to keep Parent reasonably informed
of the overall status of any such request or Takeover Proposal.
The Merger Agreement provides that nothing contained therein shall prohibit
the Company from taking and disclosing to its stockholders a position
contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange Act or
from making any disclosure to the Company's stockholders if, in the good faith
judgment of the Board of Directors of the Company, after consultation with
outside counsel, such disclosure is necessary in order to comply with its
fiduciary duties to the Company's stockholders under applicable law or
otherwise required under applicable law.
Third Party Standstill Agreements. During the period from the date of the
Merger Agreement through the Effective Time, the Company has agreed not to
terminate, amend, modify or waive any provision of any confidentiality or
standstill agreement to which the Company or any of its subsidiaries is a
party (other than any involving Parent) unless the Company's Board of
Directors shall have determined in good faith, after consultation with outside
counsel, that failing to release any third party or to amend, modify or waive
such provisions would not be consistent with the Company's Board of Directors'
fiduciary responsibilities under applicable law.
Options. Pursuant to the Merger Agreement, each stock option, stock
appreciation right and limited stock appreciation right of the Company (a
"Company Stock Option") which is outstanding immediately prior to the
consummation of the Offer (an "Option") pursuant to any stock option plan or
long-term incentive plan of the Company in effect on the date of the Merger
Agreement (collectively, the "Company Stock Plans"), whether or not otherwise
exercisable, shall become fully vested and exercisable. Upon the consummation
of the Offer each Option shall be canceled by the Company in return for the
payment, as hereinafter provided for which the holder thereof shall thereupon
be entitled to receive. Each such holder shall receive promptly (but in no
event later than five days) after the consummation of the Offer, a cash
payment in respect of such cancellation from the Company in an amount (if any)
equal to (i) the product of (x) the number of Shares subject or related to
such Option and (y) the excess, if any, of the Offer Price over the exercise
or purchase price per Share subject or related to such Option, minus (ii) all
applicable federal, state and local taxes required to be withheld by the
Company. The Company shall use its reasonable best efforts to ensure that,
after giving effect to the foregoing, no Option shall be exercisable for
Common Stock of the Company following the consummation of the Offer. Each
restricted stock agreement or stock unit agreement which is outstanding
immediately prior to the consummation of the Offer pursuant to any Company
Stock Plan, whether or not otherwise exercisable, shall become fully vested.
Upon the consummation of the Offer each such agreement shall be canceled by
the Company in return for the payment as hereinafter provided for which the
holder thereof shall thereupon be entitled to receive. Each such holder shall
receive promptly (but in no event later than five days) after the consummation
of the Offer, a cash payment in respect of such cancellation from the Company
in an amount equal to (i) the product of (x) the number of Shares subject or
related to such agreement and (y) the Offer Price, minus (ii) all applicable
federal, state and local taxes required to be withheld by the Company. The
Company shall use its reasonable best efforts to ensure that, after giving
effect to the foregoing, no such agreement shall be outstanding following the
consummation of the Offer.
Indemnification. From and after the Effective Time, Parent has agreed that
it will and will cause the Surviving Corporation to exculpate, indemnify and
hold harmless all past and present officers, directors, employees and agents
of the Company and its subsidiaries to the same extent such persons are
currently exculpated and indemnified by the Company pursuant to the Company's
Charter or Bylaws for acts or omissions, occurring at or prior to the
Effective Time and will cause the Surviving Corporation's Charter and Bylaws
to continue to include provisions to such effect. Parent will cause the
Surviving Corporation to provide, for an aggregate period of not less than six
years from the Effective Time, the Company's directors and officers who are
currently covered by the Company's existing insurance and indemnification
policy an insurance and
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indemnification policy that provides coverage for events occurring prior to
the Effective Time (the "D&O Insurance"), that is no less favorable than the
Company's existing policy or, if substantially equivalent insurance coverage
is unavailable, the best available coverage. Notwithstanding the foregoing,
the Surviving Corporation shall not be required to pay an annual premium for
the D&O Insurance in excess of 250% of the last annual premium paid prior to
the date of the Merger Agreement (which the Company has represented and
warranted to Parent to be $400,250), but in such case shall purchase as much
coverage as possible for such amount.
Board Representation. The Merger Agreement provides that promptly after such
time as the Offeror purchases Shares pursuant to the Offer, the Offeror shall
be entitled, to the fullest extent permitted by law, to designate at its
option up to that number of directors, rounded to the nearest whole number, of
the Company's Board of Directors, subject to compliance with Section 14(f) of
the Exchange Act, as will make the percentage of the Company's directors
designated by the Offeror equal to the aggregate voting power of the Shares
held by Parent or any of its subsidiaries. However, in the event that the
Offeror's designees are elected to the Board of Directors of the Company,
until the Effective Time, such Board of Directors shall have at least three
directors who are directors on the date of the Merger Agreement and who are
not officers of the Company (the "Independent Directors"). If the number of
Independent Directors shall be reduced below three for any reason whatsoever,
the remaining Independent Directors shall, to the fullest extent permitted by
law, designate a person to fill such vacancy who shall be deemed to be an
Independent Director for purposes of the Merger Agreement or, if no
Independent Directors then remain, the other directors shall designate three
persons to fill such vacancies who shall not be officers or affiliates of the
Company or any of its subsidiaries, or officers or affiliates of Parent or any
of its subsidiaries, and such persons shall be deemed to be Independent
Directors for purposes of the Merger Agreement. Following the election or
appointment of the Offeror's designees pursuant to the Merger Agreement and
prior to the Effective Time, any amendment, or waiver of any term or
condition, of the Merger Agreement or the Company's Charter or Bylaws, any
termination of the Merger Agreement by the Company, any extension by the
Company of the time for the performance of any of the obligations or other
acts of the Offeror or waiver or assertion of any of the Company's rights
under the Merger Agreement, and any other consent or action by the Board of
Directors of the Company with respect to the Merger Agreement, will require
the concurrence of a majority of the Independent Directors and no other action
by the Company, including any action by any other director of the Company,
shall be required for purposes of the Merger Agreement. In connection with the
foregoing, the Company will promptly, at the option of Parent, to the fullest
extent permitted by law, either increase the size of the Company's Board of
Directors and/or obtain the resignation of such number of its current
directors as is necessary to enable the Offeror's designees to be elected or
appointed to the Company's Board of Directors as provided above.
Employee Benefits; Severance and Other Agreements. The Merger Agreement
provides that during the period from the Effective Time until December 31,
1998, Parent shall maintain or cause to be maintained wages, compensation
levels, employee pension and welfare plans for the benefit of employees and
former employees of the Company or its subsidiaries which, in the aggregate,
are not less favorable than those wages, compensation levels and other
benefits under the benefit plans of the Company that are in effect as of date
of the Merger Agreement; provided, however, that Parent shall not have any
obligation to provide benefits based on equity securities or any equivalent
thereof. For all purposes of eligibility to participate in and vesting in
benefits provided under employee benefits plans maintained by Parent and its
subsidiaries (but not for purposes of determining benefits (or accruals
thereof) under such plans) which employees and former employees of the Company
become eligible to participate in after the Effective Time, all persons
previously employed by the Company and its subsidiaries and then employed by
Parent or its subsidiaries shall be credited with their years of service with
the Company and its subsidiaries and years of service with prior employers to
the extent service with prior employers is taken into account under such
benefit plans.
Parent has agreed to maintain or cause the Offeror to maintain certain
specified severance agreements and employment agreements relating to officers,
directors and employees that have previously been disclosed by the Company to
Parent (it being understood that nothing in the Merger Agreement shall be
deemed to mean that the
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Company shall not be required to honor its obligations under any severance
agreement or employment agreement to which it is a party) and has agreed, to
maintain or cause to be maintained the Company's standard severance policy for
its employees as in effect on the date of the Merger Agreement for a period of
at least 12 months from the Effective Time. In addition, Parent shall honor or
cause to be honored all severance agreements and employment agreements with
the Company's directors, officers and employees to the extent disclosed in the
letter from the Company to Parent dated the date of the Merger Agreement.
Parent will, or will cause the Surviving Corporation to, maintain the
Company's bonus plans (as in effect on or before March 1, 1997) through the
end of the 1997 fiscal year, with bonuses to be paid to the employees
participating thereunder at the greater of (i) the target level, if
applicable, (ii) the prior year's bonus, or (iii) such bonus as the employee
would have earned if the transaction contemplated by the Merger Agreement had
not occurred, in all events on a basis consistent with past practice.
Parent will, or will cause the Surviving Corporation to, (i) waive all
limitations as to preexisting conditions, exclusions and waiting periods with
respect to participation and coverage requirements applicable to the employees
of the Company under any welfare plan that such employees may be eligible to
participate in after the Effective Time, other than limitations or waiting
periods that are already in effect with respect to such employees and that
have not been satisfied as of the Effective Time under any welfare plan
maintained for the Company's employees immediately prior to the Effective
Time, and (ii) provide each employee of the Company with credit for any co-
payments and deductibles paid prior to the Effective Time in satisfying any
applicable deductible or out-of-pocket requirements under any welfare plans
that such employees are eligible to participate in after the Effective Time.
Parent will, or will cause the Surviving Corporation to, prior to the end of
the third month following the end of the current fiscal year, make retirement
contributions to the Company's 401(k) plan on behalf of each eligible Company
employee who was employed on the last day of the current fiscal year of four
percent of such employee's 1997 base salary and bonus up to $6,400 for each
employee; provided, however, that for any amounts to which an employee would
be entitled in excess of $6,400 for those employees whose base salary and
bonuses are in excess of $160,000, such excess amounts shall be paid to each
such employee on a basis consistent with past practice. Notwithstanding the
foregoing, in the case of a Company employee who is terminated prior to
December 31, 1997, the retirement contribution described in the previous
sentence (including any payment for any contribution in excess of $6,400)
shall be made not later than the date of the employee's termination.
Conditions Precedent. The respective obligations of each party to effect the
Merger shall be subject to the fulfillment at or prior to the Effective Time
of the following conditions: (a) if required by applicable law, the
stockholders of the Company shall have approved the Merger Agreement (provided
that Parent and the Offeror vote all of their Shares entitled to vote thereon
in favor of the Merger); (b) no statute, rule, regulation, executive order,
decree, temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other
governmental entity preventing the consummation of the Merger shall be in
effect (provided that each of the parties shall have used its reasonable best
efforts to prevent the entry of any such temporary restraining order,
injunction or other order and to appeal as promptly as possible any injunction
or other order that may be entered); (c) the Offeror shall have previously
accepted for payment and paid for Shares pursuant to the Offer; and (d) any
waiting period (and any extension thereof) under the HSR Act applicable to the
Merger shall have expired or been terminated.
Termination. The Merger Agreement provides that it may be terminated at any
time prior to the Effective Time, whether before or after the approval of the
stockholders of the Company of the Merger (if required by applicable law): (a)
by mutual written consent of Parent, the Offeror and the Company; (b) by
either Parent or the Company: (i) if (x) as a result of the failure of any of
the conditions to the Offer as set forth in this Offer to Purchase (see
Section 15) (other than the Minimum Condition), the Offer shall have
terminated or expired in accordance with its terms without the Offeror having
accepted for payment any Shares pursuant to the Offer consistent with the
Offeror's obligations with respect to extension of the Offer described above,
(y) as a result of
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the failure of the Minimum Condition, the Offer shall have terminated or
expired in accordance with its terms without the Offeror having accepted for
payment any Shares pursuant to the Offer consistent with the Offeror's
obligations with respect to extension of the Offer described above or (z) the
Offeror shall have, consistent with its obligations under the Merger
Agreement, failed to pay for the Shares prior to November 30, 1997 (provided
that the right to terminate the Merger Agreement pursuant to this clause
(b)(i) shall not be available to any party whose failure to perform any of its
obligations under the Merger Agreement results in the failure of any such
condition to the Offer) or (ii) if any United States or Canadian governmental
entity shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the transactions
contemplated by the Merger Agreement and such order, decree or ruling or other
action shall have become final and nonappealable; provided, however, that the
right to terminate the Merger Agreement shall not be available to any party
who has not used its reasonable best efforts to cause such order to be lifted;
(c) by Parent or the Offeror prior to the purchase of Shares pursuant to the
Offer in the event of a breach by the Company of any representation, warranty,
covenant or other agreement contained in the Merger Agreement which (i) would
give rise to the failure of condition (d) or (e) described below in Section 15
and (ii) in the case of a breach of a covenant, cannot be or has not been
cured within 20 days after the giving of written notice to the Company, or, in
the case of a breach of a representation or warranty, cannot be or has not
been cured within 90 days after the giving of written notice to the Company;
(d) by Parent or the Offeror if either Parent or the Offeror is entitled to
terminate the Offer as a result of the occurrence of any event set forth in
paragraph (c) described below in Section 15; provided that the temporary
suspension of the recommendation of the Company's Board of Directors described
above under "No Solicitation" shall not give rise to a right of termination
pursuant to this clause (d); (e) by the Company as described above under "No
Solicitation"; provided, that it has complied with the notice provisions
therein and it complies with requirements of the Merger Agreement relating to
payment of the Expense Reimbursement and the Termination Fee (each as defined
below under "Fees and Expenses"); (f) by the Company, if (i) any of the
representations or warranties of Parent or the Offeror set forth in the Merger
Agreement that are qualified as to materiality shall not be true and correct
in any respect or any such representations or warranties that are not so
qualified shall not be true and correct in any material respect, or (ii)
Parent or the Offeror shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or covenant of Parent or the Offeror to be performed or complied
with by it under the Merger Agreement and, in the case of (i), such untruth or
incorrectness cannot be or has not been cured within 90 days after the giving
of written notice to Parent or the Offeror, and, in the case of (ii), such
failure cannot be or has not been cured within 20 days after the giving of
written notice to Parent or the Offeror; or (g) by the Company, if the Offer
has not been timely commenced. In the event of a termination of the Merger
Agreement by either the Company or Parent, the Merger Agreement shall
forthwith become void (except for certain specified provisions, including
those pertaining to the payment of certain expenses and fees and except for
certain confidentiality obligations of the parties) and there shall be no
liability or obligation on the part of Parent, the Offeror or the Company or
their respective officers or directors, other than for liability for any
breach. If the Merger Agreement is terminated by either Parent or the Offeror
or by the Company, the Offeror shall, and Parent shall cause the Offeror to,
terminate promptly the Offer.
Fees and Expenses. Except as provided in the Merger Agreement, whether or
not the Merger is consummated, all costs and expenses incurred by a party to
the Merger Agreement in connection with the Merger Agreement and the
transactions contemplated thereby, including, without limitation, the fees and
disbursements of counsel, financial advisors and accountants, shall be paid by
the party incurring such costs and expenses.
The Merger Agreement provides that the Company will pay, or cause to be
paid, in same day funds to Parent (a) $3,000,000 for reimbursement of Parent's
expenses (the "Expense Reimbursement") and (b) $13,500,000 (the "Termination
Fee") under the circumstances and at the times set forth as follows: (i) if
Parent or the Offeror terminates the Merger Agreement in accordance with the
provisions described in clause (d) under "Termination" above, the Company
shall pay the Expense Reimbursement and the Termination Fee upon demand; (ii)
if the Company terminates the Merger Agreement in accordance with the
provision described in clause (e) under "Termination" above, the Company shall
pay the Expense Reimbursement and the Termination Fee within one business day
of such termination; and (iii) if Parent or the Company terminates the Merger
Agreement in accordance with the provision described in clause (b)(i)(y) under
"Termination" above or Parent terminates the
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Merger Agreement in accordance with the provision described in clause (c)
under "Termination" above as a result of a breach of a covenant, and, in each
case, prior to such termination, a Takeover Proposal shall have been made
(other than a Takeover Proposal made prior to the date of the Merger
Agreement) and concurrently therewith or within 12 months thereafter, (A) the
Company enters into a merger agreement, acquisition agreement or similar
agreement (including, without limitation, a letter of intent) with respect to
a Takeover Proposal, or a Takeover Proposal is consummated, involving any
party (x) with whom the Company has had any discussions with respect to a
Takeover Proposal, (y) to whom the Company furnished information with respect
to or with a view to a Takeover Proposal or (z) who had submitted a proposal
or expressed any interest publicly in a Takeover Proposal, in the case of each
of clauses (x), (y) and (z), prior to such termination, or (B) the Company
enters into a merger agreement, acquisition agreement or similar agreement
(including, without limitation, a letter of intent) with respect to a Superior
Proposal, or a Superior Proposal is consummated, then in the case of either
(A) or (B) above, the Company shall pay the Termination Fee and the Expense
Reimbursement upon the earlier of the execution of such agreement or upon
consummation of such Takeover Proposal or Superior Proposal.
The Company and Parent are also parties to a Confidentiality Letter dated
April 23, 1997 containing customary terms, including a standstill provision.
The Confidentiality Letter is filed as an exhibit to the Schedule 14D-1 and is
incorporated herein by reference.
14. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that neither the Company nor any of its
subsidiaries will, among other things, from the date of the Merger Agreement
until the time Parent's designees shall constitute a majority of the Board of
Directors of the Company, (a) (x) declare, set aside or pay any dividends on,
or make any other actual, constructive or deemed distributions in respect of,
any of its capital stock, or otherwise make any payments to its stockholders
in their capacity as such, (y) split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock, or (z)
except as required under existing employee benefit plans, agreements,
policies, awards or arrangements in effect on the date of the Merger
Agreement, purchase, redeem or otherwise acquire any shares of its capital
stock or those of any subsidiary or any other securities thereof or any
rights, warrants or options to acquire any such Shares or other securities; or
(b) except as required under existing employee benefit plans, agreements,
policies, awards or arrangements in effect on the date of the Merger
Agreement, issue, deliver, sell, pledge, dispose of or otherwise encumber any
shares of its capital stock, any other voting securities or equity equivalent
or any securities convertible into, or any rights, warrants or options to
acquire, any such Shares, voting securities, equity equivalent or convertible
securities (other than pursuant to the Rights Agreement or the issuance of
Shares upon the exercise of stock options of the Company outstanding on the
date of the Merger Agreement in accordance with their current terms).
15. CERTAIN CONDITIONS TO THE OFFEROR'S OBLIGATIONS.
Notwithstanding any other term of the Offer, but subject, in all cases, to
Parent's and the Offeror's obligations under the Merger Agreement, the Offeror
shall not be required to accept for payment or, subject to any applicable
rules and regulations of the Commission, including Rule 14e-l(c) under the
Exchange Act (relating to the Offeror's obligation to pay for or return
tendered Shares after the termination or withdrawal of the Offer), to pay for
any Shares tendered pursuant to the Offer unless (i) there shall have been
validly tendered and not withdrawn prior to the expiration of the Offer such
number of Shares that would constitute a majority of the voting power of the
Shares (assuming the exercise of all options to purchase, and the conversion
or exchange of all securities convertible or exchangeable into, Shares
outstanding at the Expiration Date), and (ii) any waiting period under the HSR
Act applicable to the purchase of Shares pursuant to the Offer shall have
expired or been terminated prior to the expiration of the Offer. Furthermore,
notwithstanding any other term of the Offer, but subject, in all cases, to
Parent's and the Offeror's obligations set forth in the Merger Agreement, the
Offeror shall not be required to accept for payment or, subject as aforesaid,
to pay for any Shares not theretofore accepted for payment or paid for, and
may terminate the Offer at any time if, at any time on or after the date of
the Merger Agreement and before the acceptance of such Shares for payment or
the payment therefor, any of the following
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conditions exists (other than as a result of any action or inaction of Parent
or any of its subsidiaries that constitutes a breach of the Merger Agreement):
(a) there shall be instituted or pending by any governmental agency or
similar authority in any United States federal or state court or
administrative agency or in any Canadian federal or provincial court or
administrative agency any suit, action, proceeding, application or
counterclaim which would reasonably be expected to (i) restrain or prohibit
the acquisition by Parent or the Offeror of any Shares under the Offer, the
consummation of the Offer or the Merger or the performance of any of the
other transactions contemplated by the Merger Agreement, or require the
Company, Parent or the Offeror to pay any damages that are material in
relation to the Company and its subsidiaries taken as a whole, (ii)
prohibit or limit the ownership or operation by the Company, Parent or any
of their respective subsidiaries of any material business or assets of the
Company and its subsidiaries, or Parent and its subsidiaries, or to compel
the Company or Parent to dispose of or hold separate any material business
or assets of the Company and its subsidiaries, or Parent and its
subsidiaries, as a result of the Offer, the Merger or any of the other
transactions contemplated by the Merger Agreement, (iii) impose material
limitations on the ability of Parent or the Offeror to acquire or hold, or
exercise full rights of ownership of, any Shares to be accepted for payment
pursuant to the Offer, including, without limitation, the right to vote
such Shares on all matters properly presented to the stockholders of the
Company, (iv) prohibit Parent or any of its subsidiaries from effectively
controlling any business or operations of the Company or its subsidiaries
or (v) which otherwise is reasonably likely to have a material adverse
effect on the business, properties, assets, financial condition or results
of operations of the Company and its subsidiaries taken as a whole;
(b) there shall be enacted, entered, enforced, promulgated or deemed
applicable to the Offer or the Merger by any United States federal or state
governmental agency, court or similar authority, any statute, rule,
regulation, judgment, order or injunction, other than the application to
the Offeror the Merger of applicable waiting periods under the HSR Act,
that would reasonably be expected to result, directly or indirectly, in any
of the consequences referred to in clauses (i) through (v) of paragraph (a)
above;
(c) the Board of Directors of the Company or any committee thereof shall
have and be continuing to have suspended, withdrawn or modified in a manner
adverse to Parent or the Offeror its approval or recommendation of the
Offer, the Merger or the Merger Agreement, or approved or recommended any
Takeover Proposal, or shall have resolved to take any of the foregoing
actions;
(d) any of the representations and warranties of the Company set forth in
the Merger Agreement that are qualified as to materiality shall not be true
and correct in any respect or any such representations and warranties that
are not so qualified shall not be true and correct in any material respect,
in each case, at the date of the Merger Agreement and as if such
representations and warranties were made as of such time of determination
(except that representations and warranties that speak as of a specified
date shall only be true and correct to such extent as of such date);
(e) the Company shall have and be continuing to have failed to perform in
any material respect any material obligation or to comply in any material
respect with any material agreement or material covenant of the Company to
be performed or complied with by it under the Merger Agreement;
(f) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on a
national securities exchange in the United States (excluding any
coordinated trading halt triggered solely as a result of a specified
increase or decrease in a market index or similar "circuit breaker"
process), (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) any material
limitation (whether or not mandatory) by any governmental entity on, or
other similar event that materially adversely affects, the extension of
credit in the United States by banks or other lending institutions, (iv) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States
which materially adversely effects the extension of credit, or (v) from the
date of the Merger Agreement through the date of termination or expiration,
a decline of at least 25% in either the Dow Jones Industrial Average or the
Standard & Poor's 500 Index;
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(g) there shall have occurred and be continuing any Material Adverse
Change (as defined in the Merger Agreement) with respect to the Company
(other than changes in general economic conditions or in economic
conditions generally affecting the industry in which the Company operates);
or
(h) the Merger Agreement shall have been terminated in accordance with
its terms;
which, in the judgment of the Offeror with respect to each and every matter
referred to above and regardless of the circumstances (including any action or
inaction by the Offeror or any of its affiliates not inconsistent with the
terms of the Merger Agreement) giving rise to any such condition, makes it
inadvisable to proceed with the Offer or with such acceptance for payment of
or payment for Shares or to proceed with the Merger.
The foregoing conditions are for the sole benefit of Parent and the Offeror
and may, subject to the terms of the Merger Agreement, be waived by Parent and
the Offeror in whole or in part at any time and from time to time in their
sole discretion. The failure by Parent or the Offeror at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right,
the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
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.
16. CERTAIN LEGAL MATTERS.
Except as set forth in this Section, the Offeror is not aware of any
approval or other action by any governmental or administrative agency which
would be required for the acquisition or ownership of Shares by the Offeror as
contemplated herein. Should any such approval or other action be required, it
will be sought, but the Offeror has no current intention to delay the purchase
of Shares tendered pursuant to the Offer pending the outcome of any such
matter, subject, however, to the Offeror's right to decline to purchase Shares
if any of the conditions specified in Section 15 shall have occurred. There
can be no assurance that any such approval or other action, if needed, would
be obtained or 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 business might not have to be disposed of if
any such approvals were not obtained or other action taken.
U. S. Antitrust. Under the provisions of the HSR Act applicable to the
Offer, the acquisition of Shares under the Offer may be consummated following
the expiration of a 15-day waiting period following the filing by of a
Premerger Notification and Report Form with respect to the Offer, unless
Parent receives a request for additional information or documentary material
from the Department of Justice, Antitrust Division (the "Antitrust Division")
or the Federal Trade Commission ("FTC") or unless early termination of the
waiting period is granted. Parent made such a filing on May 28, 1997 and,
accordingly, the initial waiting period will expire on June 11, 1997. If,
within the initial 15-day waiting period, either the Antitrust Division or the
FTC requests additional information or documentary material concerning the
Offer, the waiting period will be extended through the tenth day after the
date of substantial compliance by all parties receiving such requests.
Complying with a request for additional information or documentary material
can take a significant amount of time.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Offeror's proposed acquisition
of the Company. At any time before or after the Offeror's acquisition of
Shares pursuant to the Offer, 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 or the consummation of the Merger, or seeking the
divestiture of Shares acquired by the Offeror or the divestiture of
substantial assets of the Company or its subsidiaries or Parent or its
subsidiaries. Private parties may also bring legal action under the antitrust
laws under certain circumstances. There can be no assurance that a challenge
to the Offer, the consummation of the Merger or the sale of the Shares
pursuant to the Stock Option Agreement on antitrust grounds will not be made,
or, if such a challenge is made, of the result thereof.
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If any applicable waiting period under the HSR Act applicable to the Offer
has not expired or been terminated prior to the Expiration Date, the Offeror
will not be obligated to proceed with the Offer or the purchase of any Shares
not theretofore purchased pursuant to the Offer. See Section 15.
Investment Canada Act. According to the Company's 1996 10-K, the Company
conducts certain operations in Canada. The Investment Canada Act (the "ICA")
requires that notice of the acquisition of "control" (as defined in the ICA) by
"non-Canadians" (as defined in the ICA) of any "Canadian business" (as defined
in the ICA) be furnished to Investment Canada, a Canadian Governmental Entity.
The acquisition of Shares by the Purchaser pursuant to the Offer may
constitute an indirect acquisition of a "Canadian business" within the meaning
of the ICA. The Purchaser intends to file any notice required under the ICA.
Canadian Pre-Merger Notification Requirements. Certain provisions of Canada's
Competition Act require pre-notification to the Director of Investigation and
Research appointed under the Competition Act (the "Canadian Director") of
significant corporate transactions, such as the acquisition of a large
percentage of the stock of a public company that has Canadian operations, or a
merger or consolidation involving such an entity. Pre-notification is generally
required with respect to transactions in which the parties to the transactions
and their affiliates have assets in Canada, or annual gross revenues from sales
in, from or into Canada, in excess of Cdn. $400 million and which involve the
direct or indirect acquisition of an operating business, the value of the
assets of which, or the gross revenues from sales in or from Canada generated
from the assets of which, exceed Cdn. $35 million per year. For transactions
subject to the notification requirements, notice must be given seven or 21 days
prior to the completion of the transaction depending on the information
provided to the Canadian Director. The Canadian Director may waive the waiting
period. After the applicable waiting period expires or its waived, the
transaction may be completed. If the Canadian Director determines that the
proposed transaction prevents or lessens, or is reasonably likely to prevent or
lessen, competition substantially in a definable market, the Canadian Director
may apply to the Competition Tribunal, a special purpose Canadian tribunal, to,
among other things, require the disposition of the Canadian assets acquired in
such transaction. The Purchaser intends to file any required notice and
information with respect to its proposed acquisition with the Canadian Director
and, to the extent necessary, observe the applicable waiting period and/or
apply to the Canadian Director for an advance ruling certificate to the effect
that the Offer or the Merger would not prevent or lessen, or be likely to
prevent or lessen, competition substantially.
State Takeover Laws. The Company is incorporated under the laws of the State
of Delaware. In general, Section 203 of the DGCL ("Section 203") prevents an
"interested stockholder" (including a person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock) from engaging
in a "business combination" (defined to include mergers and certain other
actions) with a Delaware corporation for a period of three years following the
date such person became an interested stockholder unless, among other things,
the "business combination" is approved by the Board of Directors of such
corporation prior to such date. The Company's Board of Directors has approved
the Offer and the Merger. Accordingly, Section 203 is inapplicable to the Offer
and the Merger. A number of other states have adopted laws and regulations
applicable to attempts to acquire securities of corporations which are
incorporated, or have substantial assets, stockholders, principal executive
offices or principal places of business or whose business operations otherwise
have substantial economic effects in such states. In Edgar v. MITE Corp., in
1982, the Supreme Court of the United States (the "U.S. Supreme Court")
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 U.S. 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 acquirer from voting on the affairs of
a target corporation without the prior approval of the remaining stockholders.
The state law before the U.S. Supreme Court was by its terms applicable only to
corporations that had a substantial number of stockholders in the state and
were incorporated there.
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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 Offeror 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 Offeror 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 Offeror might be
required to file certain information with, or receive approvals from, the
relevant state authorities. In addition, if enjoined, the Offeror 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 event,
the Offeror may not be obligated to accept for payment any Shares tendered. See
Section 15.
Certain Charter Provisions. Article Ninth of the Company's Charter provides
that in addition to any action required by law or the Company's Charter, the
approval or authorization of (i) any merger or consolidation of the Company or
any subsidiary of the Company with (a) any Interested Stockholder or (b) any
other corporation (whether or not itself an Interested Stockholder) which is,
or after such merger or consolidation would be, an affiliate of an Interested
Stockholder; or (ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or with
any Interested Stockholder or any affiliate of any Interested Stockholder of
any assets of the Company or any subsidiary of the Company having an aggregate
fair market value of $20,000,000 or more or any loan, advance, guarantee or
other financial assistance, including any tax credit or other tax advantages,
to or with any Interested Stockholder or any affiliate of any Interested
Stockholder which involves a financial obligation or benefit of $20,000,000 or
more; or (iii) the issuance or transfer by the Company or any subsidiary of the
Company (in one transaction or a series of transactions) of any securities of
the Company or any subsidiary of the Company to any Interested Stockholder or
any affiliate of any Interested Stockholder in exchange for cash, securities or
other property (or a combination thereof) having an aggregate fair market value
of $20,000,000 or more; or (iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Company proposed by or on behalf of an
Interested Stockholder of any affiliate of any Interested Stockholder; or (v)
any reclassification of securities (including any reverse stock split), or
recapitalization of the Company or any merger or consolidation of the Company
with any of its subsidiaries or any other transaction (whether or not with or
into or otherwise involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of voting stock of the Company or any
subsidiary of the Company which is directly or indirectly owned by any
Interested Stockholder or any affiliate of any Interested Stockholder shall
require either (a) the approval of a majority of the members of the Board of
Directors of the Company as of June 30, 1988, the members of the Board of
Directors of the Company who are unaffiliated with the Interested Stockholder
and were members of the Board of Directors prior to the time the Interested
Stockholder became an Interested Stockholder, and any successor of any such
director who is unaffiliated with the Interested Stockholder and is recommended
to succeed such a director by a majority of such directors then on the Board of
Directors of the Company or (b) the affirmative vote of at least a majority of
the combined voting power of the outstanding shares of capital stock of the
Company entitled to vote generally in the election of directors, voting
together as a single class, excluding any votes cast with respect to shares
beneficially owned by an Interested Stockholder which is directly or indirectly
a party, or an affiliate or associate of which is, directly or indirectly, a
party, to such transaction.
For purposes of such Article Ninth, "Interested Stockholder" is defined as
any person (other than the Company or any subsidiary of the Company) who or
which: (i) is the beneficial owner, directly or indirectly, of more than 5% of
the outstanding voting stock of the Company; or (ii) is an affiliate of the
Company and at any time within the two-year period immediately prior to the
date in question was the beneficial owner, directly or indirectly, of more than
5% of the outstanding voting stock of the Company; or (iii) is an assignee of
or has otherwise succeeded to any voting stock of the Company which at any time
within the two-year period immediately prior to the date in question was
beneficially owned by any Interested Stockholder, if such assignment or
succession shall have occurred in the course of a transaction or a series of
transaction not involving a public offering within the meaning of the
Securities Act.
32
<PAGE>
The Merger of the Offeror with and into the Company would trigger the
requirements of Article Ninth of the Company's Charter. In accordance with the
Company's Charter, the required approval by the Board of Directors of the
Company of the Merger Agreement has been obtained.
Rights Agreement. The Rights Agreement contains certain provisions that may
delay, defer or prevent a takeover of the Company. In connection with the
Merger Agreement, the Company's Board of Directors has amended the Rights
Agreement to provide that, so long as the Merger Agreement has not been
terminated, such provisions will not apply to the Offer, the Merger and the
Merger Agreement and the transactions contemplated thereby.
17. FEES AND EXPENSES.
Neither the Offeror nor Parent, nor any officer, director, stockholder,
agent or other representative of the Offeror or Parent will pay any fees or
commissions to any broker, dealer or other person (other than the Dealer
Manager, the Information Agent and the Depositary) for soliciting tenders of
Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by the Offeror
for customary mailing and handling expenses incurred by them in forwarding
materials to their customers.
Merrill Lynch is acting as Dealer Manager in connection with the Offer and
is providing certain financial advisory services to Parent and the Offeror in
connection with the Offer. Parent has agreed to pay Merrill Lynch reasonable
and customary compensation for such services. In addition, Parent has agreed
to reimburse Merrill Lynch for its out-of-pocket expenses related to its
engagement, including the reasonable fees and expenses of its counsel, and has
agreed to indemnify Merrill Lynch and certain affiliated persons against
certain liabilities and expenses in connection with its services, including,
without limitation, certain liabilities under the federal securities laws.
The Offeror has retained Georgeson & Company Inc. as Information Agent and
The Bank of New York as Depositary in connection with the Offer. The
Information Agent and the Depositary will receive reasonable and customary
compensation for their services hereunder and reimbursement for their
reasonable out-of-pocket expenses. The Depositary will also be indemnified by
the Offeror against certain liabilities in connection with the Offer. The
Information Agent may contact holders of Shares by mail, telex, telegraph and
personal interviews and may request brokers, dealers and other nominee
stockholders to forward materials relating to the Offer to beneficial owners
of Shares.
18. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making
or acceptance thereof would not be in compliance with the securities, blue sky
or other 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 shall be deemed to be made on behalf of the Offeror by the
Dealer Manager or one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of the Offeror other than as contained in this Offer
to Purchase or in the Letter of Transmittal and, if any such information or
representation is given or made, it should not be relied upon as having been
authorized by the Offeror or Parent.
The Offeror and Parent have filed with the Commission the Schedule 14D-1,
pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-3 promulgated
thereunder, furnishing certain information with respect to the
33
<PAGE>
Offer. The Schedule 14D-1 and any amendments thereto, including exhibits, may
be examined and copies may be obtained at the same places and in the same
manner as set forth with respect to the Company in Section 8 (except that they
will not be available at the regional offices of the Commission).
Sierra Corp.
May 30, 1997
34
<PAGE>
ANNEX I
CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF THE PARENT AND THE OFFEROR
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. Set forth below are the name,
current business address, citizenship, present principal occupation or
employment and employment history (covering a period of not less than five
years) of each executive officer and director of Parent. Unless otherwise
indicated, each such person's business address is One Owens Corning Parkway,
Toledo, Ohio 43659. All persons listed below are citizens of the United States
of America, except Heinz-J. Otto, who is a citizen of Germany and Sir Trevor
Holdsworth, who is a citizen of the United Kingdom.
NAME PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
------------------------------
Glen H. Hiner Chairman of the Board and Chief Executive Officer
since January 1992. Director of Parent since 1992.
Mr. Hiner is also a director of Dana Corporation
and The Prudential Insurance Company of America.
Alan D. Booth Vice President and Process Executive, Customer
Fulfillment Process since June 1996; formerly Vice
President and President, Insulation--North America
(1994), Vice President, Insulation Division,
Construction Products Group (1993) and Vice
President, Mechanical Products Division (1988).
David T. Brown Vice President and President, Building Materials
Sales and Distribution-- North America since
January 1996; formerly Vice President and
President, Roofing/Asphalt (1994), Vice President,
Roofing/Asphalt Division (1993) and Vice President,
Atlanta Regional Sales, Building Materials (1985).
Christian L. Campbell Senior Vice President, General Counsel and
Secretary since January 1995; formerly Vice
President, General Counsel and Secretary at Nalco
Chemical (1990).
Domenico Cecere Vice President and President, Roofing/Asphalt since
January 1996; formerly Vice President and
Controller (1993), also Vice President, Finance and
Administration, Europe at Honeywell, Inc. (1992).
Charles H. Dana Executive Vice President since January 1994;
formerly Senior Vice President and President--
Industrial Materials Group (1989).
David W. Devonshire Senior Vice President and Chief Financial Officer
since July 1993; formerly Corporate Vice President,
Finance at Honeywell, Inc. (1992).
Carl B. Hedlund Vice President and President, Asia Pacific since
December 1995; formerly Vice President and
President, Retail/Distribution (1994), Vice
President, Retail and Distribution, Construction
Products Group (1993), Vice President, Roofing
Products Operating Division (1989).
Robert C. Lonergan President, Building Materials, Europe/Africa since
April 1997; formerly Vice President, Science and
Technology since January 1995; President, Windows
(1993), also President of Reb Plastics, Inc.
(1984).
Heinz-J. Otto
Vice President and President, Composites since
October 1996; formerly Head of Region Europe and
Executive Board Member, Ladis 7 Gyr Corp. (1992).
Bradford C. Oelman
Senior Vice President, Governmental Affairs since
April 1996; formerly Vice President, Corporate
Relations (1985).
I-1
<PAGE>
NAME PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
------------------------------
Steven J. Strobel Vice President and Controller since September 1996;
formerly Chief Financial Officer of Kraft Canada,
Inc. (1994) and Vice President and Controller of
Kraft USA Operations (1991).
Gregory M. Thomson Senior Vice President, Human Resources since
October 1994; formerly Vice President, Human
Resources, Public Service Electric & Gas (1988).
Efthimios O. Vidalis Vice President and President, Insulation since July
1996; formerly Vice President and President,
Composites (1994) and Vice President,
Reinforcements Division, Europe (1986).
Norman P. Blake, Jr. Presently Chairman of the Board, Chief Executive
Officer and President of USF&G Corporation,
insurance and financial services, Baltimore, MD
since 1990. Mr. Blake is also a director of Enron
Corporation and a member of the American Insurance
Association and Community Partnership for
Education. Director of Parent since 1992.
Leonard S. Coleman, Jr. Presently President, The National League of
Professional Baseball Clubs, professional sports,
New York, NY since 1996. Mr. Coleman has been with
the National League of Professional Baseball Clubs
since 1991. Mr. Coleman is also a director of
Beneficial Corporation, the Omnicom Group and New
Jersey Resources. He also serves as an Advisory
Director of the Martin Luther King, Jr. Center for
Non-Violent Social Change, the Metropolitan Opera,
The Newark Museum, the Schumann Fund, The Clark
Foundation, The Children's Defense Fund, Seton Hall
University and The National Urban League. Director
of Parent since 1996.
William W. Colville Presently consultant to and formerly Senior Vice
President, General Counsel and Secretary of Parent
since 1984. Mr. Colville is also a director of
Nordson Corporation. Director of Parent since 1995.
Gaston Caperton Former Governor of the State of West Virginia from
1989-1997. Mr. Caperton was the 1996 chair of the
Democratic Governors' Association and serves on the
National Governors' Association executive
committee. He is also a member of the
Intergovernmental Policy Advisory Committee on U.S.
Trade. Director of Parent since 1997.
John H. Dasburg Presently President and Chief Executive Officer,
Northwest Airlines Corporation, a transportation
company, St. Paul, MN since 1990. Mr. Dasburg has
been with Northwest Airlines Corporation since
1989. Mr. Dasburg is also a director of Northwest
Airlines Corporation and The St. Paul Companies,
Inc. Director of Parent since 1996.
Landon Hilliard Presently Partner, Brown Brothers Harriman & Co.,
private bankers, New York, NY since 1979. Mr.
Hilliard has been with Brown Brothers Harriman &
Co. since 1974. Mr. Hilliard is also a director of
Norfolk Southern Corporation and Chairman of the
Board of Trustees of the Provident Loan Society of
New York. Director of Parent since 1989.
Sir Trevor Holdsworth
Former Chairman, National Power plc., an
electricity generator company, London, England
since 1990. Sir Trevor is also a director of
Beauford plc. and Lambert Howarth plc. Director of
Parent since 1994.
I-2
<PAGE>
NAME PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
------------------------------
Jon M. Huntsman, Jr. Presently Vice Chairman of Huntsman Corporation,
manufacturer of petrochemicals, Salt Lake City, UT
since 1993. From 1992 through June 1993 he served
as U.S. Ambassador to Singapore. Mr. Huntsman is a
director of Valassis Communications, Total
Petroleum Inc. and numerous Huntsman Companies. He
also serves as a director of the National Bureau of
Asian Research and the Pacific Council on
International Policy, and is a member of the
Council of American Ambassadors, the National
Committee on U.S.--China Relations and the Council
on Foreign Relations. He also serves on the
governing board of Intermountain Health Care and
the Board of Directors of KUED Television. Director
of Parent since 1993.
Ann Iverson Presently Group Chief Executive, Laura Ashley
Holdings plc., women's clothing and home
furnishings, London, England since 1995. From 1992
through 1994 she was Chief Executive Officer of
Mothercare. From 1994 to 1995 she was President and
Chief Executive Officer, Kay-Bee Toy Stores. Ms.
Iverson is also a director of Laura Ashley Holdings
plc. Director of Parent since 1996.
W. Walker Lewis Presently Senior Advisor, Dillon, Read & Co., Inc.,
New York, NY, an investment banking firm and Senior
Advisor to Marakon Associates, a consulting firm,
Stamford, CT. Most recently he served as Managing
Director, Kidder, Peabody & Co., Inc. From March
1992 through April 1994 he was President, Avon U.S.
and executive Vice President, Avon Products Inc.
Mr. Lewis is also a director of Unilab Corporation
and American Management Systems, Inc. Director of
Parent since 1993.
Furman C. Moseley, Jr. Presently Director, Simpson Investment Company, a
holding company for subsidiaries manufacturing wood
pulp and paper products, Seattle, WA. Mr. Moseley
joined Simpson Paper in 1960, rising to become
Executive Vice President and then Chairman. He
later became President of Simpson Investment
Company, the parent company of Simpson Paper. He
retired from both companies in 1995. Mr. Moseley is
also a director of Eaton Corporation and Chairman
of Sasquatch Books, Inc. Director of Parent since
1983.
W. Ann Reynolds Presently, Chancellor of City University of New
York, New York, NY since 1990. Ms. Reynolds is also
a director of Humana, Inc., Abbott Laboratories and
Maytag Corporation. Director of Parent since 1993.
2. DIRECTORS AND EXECUTIVE OFFICERS OF OFFEROR. Set forth below are the name,
current business address, citizenship, present principal occupation or
employment and employment history (covering a period of not less than five
years) of each executive officer and director of the Offeror. Unless otherwise
indicated, each such person's business address is One Owens Corning Parkway,
Toledo, Ohio 43659. All persons listed below are citizens of the United States
of America.
NAME PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND
MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
------------------------------
Christian L. Campbell Director and President of Offeror since 1997.
Senior Vice President, General Counsel and
Secretary of Parent since January 1995; formerly
Vice President, General Counsel and Secretary at
Nalco Chemical (1990).
Dennis L. Jarvela
Secretary of Offeror since 1997. Also, Mr. Jarvela
currently holds the position of Vice President--
Corporate Law for Parent, since 1993; formerly
Director--Corporate Law (1985).
I-3
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal and certificates for
Shares and any other required documents should be sent or delivered by each
stockholder of the Company or such stockholder's broker, dealer, commercial
bank, trust company or other nominee to the Depositary at one of the addresses
set forth below:
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail: Facsimile Transmission: By Hand or Overnight
Tender & Exchange (for Eligible Courier:
Department Institutions Only) Tender & Exchange
P.O. Box 11248 (212) 815-6213 Department
Church Street Station 101 Barclay Street
New York, New York 10286- Receive and Deliver
1248 Window
New York, New York 10286
For Confirmation Telephone:
(800) 507-9357
Questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses or telephone numbers
and locations set forth below. Additional copies of this Offer to Purchase,
the Letter of Transmittal and the Notice of Guaranteed Delivery may be
obtained from the Information Agent. Stockholders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
LOGO
Wall Street Plaza
New York, New York 10005
Banks and Brokers call collect: (212) 440-9800
ALL OTHERS CALL TOLL FREE: 1-800-223-2064
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1305
1-800-436-1019 (Toll Free)
(212) 449-8209 (Call Collect)
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
FIBREBOARD CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED MAY 30, 1997
BY
SIERRA CORP.
A WHOLLY OWNED SUBSIDIARY OF
OWENS CORNING
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, JUNE 26, 1997, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail: Facsimile Transmission: By Hand or Overnight
Tender & Exchange Courier:
Department (for Eligible Institutions Only)
(212) 815-6213 Tender & Exchange
P.O. Box 11248 Department
Church Street Station 101 Barclay Street
New York, New York Receive and Deliver
10286-1248 Window
For Confirmation Telephone: New York, New York
(800) 507-9357 10286
---------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE OTHER THAN AS SET FORTH ABOVE, DOES NOT
CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE
SUBSTITUTE FORM W-9 SET FORTH BELOW.
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 Fibreboard
Corporation (the "Company") if certificates evidencing Shares are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if delivery of Shares (as defined below) is to be made
by book-entry transfer to the Depositary's account at The Depository Trust
Company or the 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 (as defined below).
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER-FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITORY.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their Shares and all other documents required hereby to the
Depositary by the Expiration Date (as defined in the Offer to Purchase), or
who cannot comply with the book-entry transfer procedures on a timely basis,
may nevertheless tender their Shares pursuant to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2.
DESCRIPTION OF SHARES TENDERED
<TABLE>
- -----------------------------------------------------------------
<CAPTION>
NAME(S) AND
ADDRESS(ES)
OF
REGISTERED
HOLDER(S)
(PLEASE
FILL IN, IF SHARES TENDERED
BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- -----------------------------------------------------------------
SHARE NUMBER OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
---------------------------
---------------------------
---------------------------
---------------------------
---------------------------
<S> <C> <C> <C>
TOTAL SHARES
- -----------------------------------------------------------------
</TABLE>
*Need not be completed by stockholders tendering by book-entry transfer.
**Unless otherwise indicated, it will be assumed that all Shares
represented by any certificates delivered to the Depositary are being
tendered. See Instruction 4.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
[_] 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
[_] Philadelphia Depository Trust Company
Transaction Code No. ________________________________________________________
[_] 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___________________________
Window Ticket Number (if any) _______________________________________________
Name of Institution which Guaranteed Delivery________________________________
If delivery is by book-entry transfer________________________________________
Name of Tendering Institution _______________________________________________
Account No. ______________________________________________________________ at
[_] The Depository Trust Company
[_] Philadelphia Depository Trust Company
Transaction Code No. ________________________________________________________
---------------
Ladies and Gentlemen:
The undersigned hereby tenders to Sierra Corp. (the "Offeror"), a Delaware
corporation and a wholly owned subsidiary of Owens Corning, a Delaware
corporation ("Parent"), the above-described shares of common stock, $.01 par
value per share of Fibreboard Corporation, a Delaware corporation (the
"Company"), including the associated preferred stock purchase rights issued
pursuant to the Rights Agreement dated as of August 25, 1988, as amended,
between the Company and The First National Bank of Boston, as successor Rights
Agent (collectively, the "Shares"), pursuant to the Offeror's offer to
purchase all of the outstanding Shares at a purchase price of $55.00 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated May 30,
1997 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and
in this Letter of Transmittal (which, together with the Offer to Purchase, and
any amendments or supplements hereto or thereto, collectively constitute the
"Offer"). The Offer is being made in connection with the Agreement and Plan of
Merger, dated as of May 27, 1997 (the "Merger Agreement"), among the Parent,
the Offeror and the Company.
2
<PAGE>
Subject to and effective upon acceptance for payment of and payment for the
Shares 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 that are being tendered hereby (and any and all other Shares or
other securities 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 all such other Shares or securities), with
full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (a) deliver certificates for
such Shares (and all such other Shares or securities), or transfer ownership of
such Shares (and all such other Shares or securities) 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, (b) present such Shares (and all such other Shares or
securities) for transfer on the books of the Company and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and all such other Shares or securities), all in accordance with the
terms of the Offer.
The undersigned hereby irrevocably appoints each designee of the Offeror as
the attorney-in-fact and proxy 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 and proxy or his substitute shall in his sole
judgment deem proper, with respect to all of the Shares tendered hereby which
have been accepted for payment by the Offeror prior to the time of any vote or
other action (and any and all other Shares or other securities or rights issued
or issuable in respect of such Shares) at any meeting of stockholders of the
Company (whether annual or special and whether or not an adjourned meeting),
any actions by written consent in lieu of any such meeting or otherwise. This
proxy is irrevocable and is granted in consideration of, and is effective upon,
the acceptance for payment of such Shares 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 all such other Shares or other securities or rights), and no
subsequent proxies will be given or written consents will be executed by the
undersigned (and if given or executed, will not be deemed effective).
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any and all other Shares or other securities or rights issued or
issuable in respect of such Shares) 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, upon request, will
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 tendered hereby (and all such other Shares or other
securities or rights).
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.
The undersigned understands that tenders of Shares pursuant to any one of the
procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute an agreement between the undersigned and
the Offeror upon the terms and subject to the conditions of the Offer. The
Offeror's acceptance of such Shares for payment will constitute a binding
agreement between the undersigned and the Offeror upon the terms and subject to
the conditions of the Offer, including, without limitation, the undersigned's
representation and warranty that the undersigned owns the Shares being
tendered.
Unless otherwise indicated under "Special Payment Instructions," please issue
the check for the purchase price of any Shares purchased, and return any
certificates evidencing Shares not tendered or not purchased, in the name(s) of
the undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price of any Shares
purchased and return any certificates for Shares 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 purchased and return any
Shares not tendered or not purchased in the name(s) of, and mail said check and
any certificates to, the person(s) so indicated. The undersigned recognizes
that the Offeror has no obligation, pursuant to the "Special Payment
Instructions," to transfer any Shares from the name of the registered holder(s)
thereof if the Offeror does not accept for payment any of the Shares so
tendered.
3
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 5 AND 7)
To be completed ONLY if the check To be completed ONLY if the check
for the purchase price of Shares for the purchase price of Shares
purchased or certificates for purchased or certificates for
Shares not tendered or not Shares not tendered or not
purchased are to be issued in the purchased are to be mailed to
name of someone other than the someone other than the undersigned
undersigned or if Shares tendered or to the undersigned at an address
hereby and delivered by book-entry other than that shown below the
transfer which are not accepted for undersigned's signature (s).
payment are to be returned by
credit to an account at one of the
Book-Entry Transfer Facilities
other than designated above.
Mail check and/or certificates to:
Name _______________________________
(Please Print)
Issue [_] Check [_] Certificate to:
Address ____________________________
Name _______________________________
(Please Print) ------------------------------------
(Zip Code)
Address ____________________________ ------------------------------------
------------------------------------ (Taxpayer Identification or Social
(Zip Code) Security No.)
------------------------------------ (See Substitute Form W-9)
(Taxpayer Identification or Social
Security No.)
(See Substitute Form W-9)
[_] Credit Shares delivered by
book-entry transfer and not
purchased to the account set
forth below
Check appropriate box.
[_] The Depository Trust Company
[_] Philadelphia Depository Trust
Company
4
<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 Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program, the Stock Exchange
Medallion Program, or by any other bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934,
as amended (each of the foregoing constituting an "Eligible Institution"),
unless the Shares tendered thereby are tendered (i) by a registered holder of
Shares who has not completed either the box labeled "Special Payment
Instructions" or the box labeled "Special Delivery Instructions" on the Letter
of Transmittal or (ii) for the account of an Eligible Institution. See
Instruction 5. If the certificates are registered in the name of a person or
persons other than the signer of this Letter of Transmittal, or if payment is
to be made or delivered to, or certificates evidencing unpurchased Shares 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 Shares. This Letter of Transmittal
is to be used either if certificates are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is utilized, if the
delivery of Shares 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, or a confirmation of a book-entry transfer
into the Depositary's account at one of the Book-Entry Transfer Facilities of
all Shares delivered electronically, as well as a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof) and any
other documents required by this Letter of Transmittal, or an Agent's Message
in the case of a book-entry delivery, must be received by the Depositary at one
of its addresses set forth on the front page of this Letter of Transmittal by
the Expiration Date. If certificates are forwarded to the Depositary in
multiple deliveries, a properly completed and duly executed Letter of
Transmittal must accompany each such delivery. Stockholders who cannot deliver
their Shares and all other required documents to the Depositary by 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 prior to the Expiration Date; and (c) the certificates for all
tendered Shares, in proper form for tender, or a confirmation of a book-entry
transfer into the Depositary's account at one of the Book-Entry Transfer
Facilities of all Shares delivered electronically, as well as a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof), and any other documents required by this Letter of
Transmittal must be received by the Depositary within three trading days after
the date of execution of such Notice of Guaranteed Delivery, all as provided in
Section 3 of the Offer to Purchase. The term "trading day" is any day on which
the New York Stock Exchange is open for business.
THE METHOD OF DELIVERY OF CERTIFICATES EVIDENCING SHARES, 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 A CONFIRMATION
OF A BOOK-ENTRY TRANSFER). 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 a manually signed facsimile thereof), the tendering stockholder waives any
right to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
5
<PAGE>
4. Partial Tenders (not applicable to stockholders who tender by book-entry
transfer). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
which are to be tendered in the box entitled "Number of Shares Tendered." In
such case, a new certificate for the remainder of the Shares 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 evidenced 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
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 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 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 tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made, or
certificates evidencing Shares not tendered or not purchased are to be
returned, in the name of any person other than the registered holder(s), in
which case the certificate(s) for such Shares tendered hereby must be endorsed,
or accompanied by, appropriate stock powers, in either case signed exactly as
the name(s) of the registered holder(s) appear(s) on the certificate for such
Shares. 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 tendered hereby, the certificate must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on the certificates for such
Shares. Signature(s) on any such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate evidencing Shares 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. Except as otherwise provided in this Instruction 6,
the Offeror will pay any stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price is to be made to, or Shares 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.
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 Instruction. If the check for the purchase
price of any Shares purchased is to be issued, or any Shares 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 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 by book-entry transfer may request
that Shares 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 not purchased
will be returned by crediting the account at the Book-Entry Transfer Facilities
designated above.
6
<PAGE>
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 below, unless an exemption applies. Failure to provide the information
on the Substitute Form W-9 may subject the tendering stockholder to a $50
penalty and to 31% federal income tax backup withholding on the payment of the
purchase price for the Shares.
9. Foreign Holders. Foreign holders must submit a completed IRS Form W-8 to
avoid 31% backup withholding. IRS Form W-8 may be obtained by contacting the
Depositary at one of the addresses on the face of this Letter of Transmittal.
10. Requests for Assistance or Additional Copies. Questions and requests for
assistance may be directed to the Dealer Manager or the Information Agent at
their respective addresses or telephone numbers set forth below. Additional
copies of the Offer to Purchase, this Letter of Transmittal and the Notice of
Guaranteed Delivery may be obtained from the Information Agent or from brokers,
dealers, commercial banks or trust companies.
11. Waiver of Conditions. The conditions of the Offer may be waived by the
Offeror (subject to certain limitations in the Merger Agreement), in whole or
in part, at any time or from time to time, in the Offeror's sole discretion.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY
HEREOF (TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND
ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN
THE OFFER TO PURCHASE).
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 purchased pursuant to
the Offer may be subject to backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit a statement, signed under penalties 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.
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 purchased pursuant to the Offer, the
stockholder is required to notify the Depositary of such stockholder's 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.
7
<PAGE>
SIGN HERE
(Complete Substitute Form W-9 below)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Signature(s) of Owner(s)
------------------------------------------------------------------------------
Name(s) ______________________________________________________________________
------------------------------------------------------------------------------
Capacity (full title) ________________________________________________________
Address ______________________________________________________________________
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Include Zip Code)
------------------------------------------------------------------------------
Area Code and Telephone Number _______________________________________________
Taxpayer Identification or Social Security Number ____________________________
(See Substitute Form W-9)
Dated: ________________________________________________________________ , 1997
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock 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 set forth full title
and see Instruction 5).
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
Authorized signature(s) ______________________________________________________
Name _________________________________________________________________________
Name of Firm _________________________________________________________________
Address ______________________________________________________________________
------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number _______________________________________________
Dated: ________________________________________________________________ , 1997
8
<PAGE>
PAYOR'S NAME: THE BANK OF NEW YORK
- --------------------------------------------------------------------------------
PART I -- PLEASE PROVIDE TIN: _____________________
SUBSTITUTE YOUR TIN IN THE BOX AT THE Social Security Number or
RIGHT AND CERTIFY BY Employer Identification
SIGNING AND DATING BELOW. Number
FORM W-9
DEPARTMENT OF THE ---------------------------------------------------------
TREASURY, INTERNAL PART II -- For Payees exempt from backup withholding,
REVENUE SERVICE see the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9
and complete as instructed therein.
PAYOR'S REQUEST FOR
TAXPAYER
IDENTIFICATION NUMBER
("TIN") AND
CERTIFICATION
-------------------------------------------------------
Certification -- Under penalties 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 because (a)
I am exempt from backup withholding or (b) I have
not been notified by the Internal Revenue Service
("IRS") that I am subject to backup withholding as
a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I
am no longer subject to backup withholding.
---------------------------------------------------------
SIGNATURE: _______________________ DATE:
CERTIFICATION 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 the instructions in
the enclosed Guidelines.)
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 penalties 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 Officer
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:
9
<PAGE>
The Information Agent for the Offer is:
LOGO
Wall Street Plaza
New York, New York 10005
Banks and Brokers call collect (212) 440-9800
ALL OTHERS CALL TOLL FREE: 1-800-223-2064
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1305
1-800-436-1019
(212) 449-8209 (Call Collect)
<PAGE>
LOGO
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
FIBREBOARD CORPORATION
AT
$55.00 NET PER SHARE
BY
SIERRA CORP.
A WHOLLY OWNED SUBSIDIARY OF
OWENS CORNING
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, JUNE 26, 1997, UNLESS THE OFFER IS EXTENDED.
May 30, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Sierra Corp., a Delaware corporation (the
"Offeror") and a wholly owned subsidiary of Owens Corning, a Delaware
corporation ("Parent"), to act as Dealer Manager in connection with the
Offeror's offer to purchase all outstanding shares of common stock, par value
$.01 per share, of Fibreboard Corporation, a Delaware corporation (the
"Company"), including the associated preferred stock purchase rights issued
pursuant to the Rights Agreement dated as of August 25, 1988, as amended,
between the Company and The First National Bank of Boston, as successor Rights
Agent (collectively, the "Shares"), at a purchase price of $55.00 per Share,
net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated May 30,
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. The Offer is being made in
connection with the Agreement and Plan of Merger, dated as of May 27, 1997,
among Parent, the Offeror and the Company (the "Merger Agreement"). Holders of
Shares whose certificates for such Shares (the "Certificates") are not
immediately available or who cannot deliver their Certificates and all other
required documents to The Bank of New York (the "Depositary") or complete the
procedures for book-entry transfer prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase) must tender their Shares according to the
guaranteed delivery procedures set forth in Section 3 of the Offer to
Purchase.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF
SHARES THAT WOULD CONSTITUTE A MAJORITY OF THE VOTING POWER OF THE SHARES
(ASSUMING THE EXERCISE OF ALL OPTIONS TO PURCHASE, AND THE CONVERSION OR
EXCHANGE OF ALL SECURITIES CONVERTIBLE OR EXCHANGEABLE INTO, SHARES
OUTSTANDING AT THE EXPIRATION DATE OF THE OFFER), (II) ANY WAITING PERIOD
UNDER THE HSR ACT (AS DEFINED IN THE OFFER TO PURCHASE) APPLICABLE TO THE
PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR HAVING BEEN
TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER AND (III) THE SATISFACTION OF
CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION 15 OF THE OFFER TO PURCHASE.
<PAGE>
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares in your name or in the name of your nominee.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following
documents:
1. The Offer to Purchase, dated May 30, 1997.
2. The Letter of Transmittal to be used by holders of Shares in accepting
the Offer and tendering Shares. Facsimile copies of the Letter of
Transmittal (with manual signatures) may be used to tender Shares.
3. A letter to stockholders of the Company from John D. Roach, the
President and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company and mailed to the
stockholders of the Company.
4. The Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if neither of the two procedures for tendering Shares set forth in
the Offer to Purchase can be completed on a timely basis.
5. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name, with space provided for
obtaining such clients' instructions with regard to the Offer.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to the Depositary.
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 Offeror will accept for payment and will pay for all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4 of the Offer to Purchase promptly after the later to
occur of (a) the Expiration Date and (b) the satisfaction or waiver of the
conditions set forth in Section 15 of the Offer to Purchase related to
regulatory matters. Subject to compliance with Rule 14e-1(c) under the
Exchange Act, the Offeror expressly reserves the right to delay payment for
Shares in order to comply in whole or in part with any applicable law. See
Sections 1 and 16 of the Offer to Purchase. In all cases, payment for Shares
tendered and accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for such Shares or
timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company or the Philadelphia
Depository Trust Company, pursuant to the procedures set forth in Section 3 of
the Offer to Purchase, (ii) a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with all required
signature guarantees or, in the case of a book-entry transfer, an Agent's
Message (as defined in Section 2 of the Offer to Purchase) and (iii) any other
documents required by the Letter of Transmittal.
The Offeror will not pay any fees or commissions to any broker or dealer or
any other person (other than the Dealer Manager, the Information Agent and the
Depositary as described in Section 17 of the Offer to Purchase) in connection
with the solicitation of tenders of Shares pursuant to the Offer. The Offeror
will, however, upon request, reimburse you for customary mailing and handling
expenses incurred by you in forwarding the enclosed materials to your clients.
The Offeror will pay any stock transfer taxes incident to the transfer to it
of validly tendered Shares except as otherwise provided in Instruction 6 of
the Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JUNE 26, 1997,
UNLESS THE OFFER IS EXTENDED.
-2-
<PAGE>
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal (or a manually signed facsimile thereof) 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) or other required
documents should be sent to the Depositary and (ii) Certificates representing
the tendered Shares on a timely Book-Entry Confirmation (as defined in the
Offer to Purchase) should be delivered to the Depositary in accordance with the
instructions set forth in the Offer.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Certificates or other required documents or complete the
procedures for book-entry transfer prior to the Expiration Date, a tender must
be effected by following the guaranteed delivery procedures specified in
Section 3 of the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to
Georgeson & Company Inc. or Merrill Lynch, Pierce, Fenner & Smith Incorporated,
the Dealer Manager, at their respective addresses and telephone numbers set
forth on the back cover of the Offer to Purchase.
Additional copies of the enclosed materials may be obtained by calling
Georgeson & Company Inc., the Information Agent, collect at 212-440-9800 or
from brokers, dealers, commercial banks or trust companies.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF PARENT, THE OFFEROR, THE COMPANY, THE
DEPOSITARY, THE INFORMATION AGENT, THE DEALER MANAGER OR ANY AFFILIATE OF ANY
OF THE FOREGOING, 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.
-3-
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
FIBREBOARD CORPORATION
AT
$55.00 NET PER SHARE
BY
SIERRA CORP.
A WHOLLY OWNED SUBSIDIARY OF
OWENS CORNING
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, JUNE 26, 1997, UNLESS THE OFFER IS EXTENDED.
May 30, 1997
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated May 30,
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 Sierra Corp., a Delaware corporation (the
"Offeror") and a wholly owned subsidiary of Owens Corning, a Delaware
corporation ("Parent"), to purchase all outstanding shares of common stock,
par value $.01 per share of Fibreboard Corporation, a Delaware corporation
(the "Company"), including the associated preferred stock purchase rights
issued pursuant to the Rights Agreement dated as of August 25, 1988, as
amended, between the Company and The First National Bank of Boston, as
successor Rights Agent (collectively, the "Shares"), at a purchase price of
$55.00 per Share, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in the Offer. The Offer is
being made in connection with the Agreement and Plan of Merger, dated as of
May 27, 1997, among Parent, the Offeror and the Company (the "Merger
Agreement"). Holders of Shares whose certificates for such Shares (the
"Certificates") are not immediately available or who cannot deliver their
Certificates and all other required documents to The Bank of New York (the
"Depositary") or complete the procedures for book-entry transfer prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase) must tender
their shares according to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase.
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. A TENDER OF
SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR
YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to tender any or
all of the Shares 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 $55.00 per Share, net to you in cash without
interest.
2. The Offer is being made for all of the outstanding Shares.
<PAGE>
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Thursday, June 26, 1997, unless the Offer is extended.
4. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer such number
of Shares that would constitute a majority of the voting power of the
Shares (assuming the exercise of all options to purchase, and the
conversion of all securities convertible or exchangeable into, Shares
outstanding at the expiration date of the Offer). The Offer is also subject
to the other terms and conditions contained in the Offer to Purchase.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions imposed by Parent or the Offeror 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.
The Offer is made solely by 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
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 Merrill Lynch, Pierce, Fenner &
Smith Incorporated or by one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
If you wish to have us tender any or all of the Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction
form contained in this letter. An envelope in which to return your instruction
to us is enclosed. If you authorize the tender of your Shares, all such Shares
will be tendered unless otherwise indicated in such instruction form. PLEASE
FORWARD YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO
TENDER YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
FIBREBOARD CORPORATION
BY
SIERRA CORP.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated May 30, 1997 (the "Offer to Purchase"), and the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer") in connection with the offer by
Sierra Corp., a Delaware corporation (the "Offeror") and a wholly owned
subsidiary of Owens Corning, a Delaware corporation, to purchase all
outstanding shares of common stock, par value $.01 per share of Fibreboard
Corporation, a Delaware corporation (the "Company"), including the associated
preferred stock purchase rights issued pursuant to the Rights Agreement dated
as of August 25, 1988, as amended, between the Company and the First National
Bank of Boston, as successor Rights Agent (collectively, the "Shares"), at a
purchase price of $55.00 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer.
This will instruct you to tender to the Offeror the number of Shares
indicated below (or if no number is indicated below, all Shares) which are
held by you for the account of the undersigned, upon the terms and subject to
the conditions set forth in the Offer.
Number of Shares to be Tendered:* _____
SIGN HERE
-------------------------------------
Account Number: _______________ -------------------------------------
Signature(s)
Date: ___________________, 1997 -------------------------------------
-------------------------------------
(Print Name(s))
-------------------------------------
-------------------------------------
(Print Address(es))
-------------------------------------
(Area Code and Telephone Number(s))
-------------------------------------
(Taxpayer Identification or
Social Security Number(s))
- --------
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
3
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
FIBREBOARD CORPORATION
TO
SIERRA CORP.
A WHOLLY OWNED SUBSIDIARY OF
OWENS CORNING
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, JUNE 26, 1997 UNLESS THE OFFER IS EXTENDED
This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates for shares of common stock, par
value $.01, per share, of Fibreboard Corporation, a Delaware corporation (the
"Company"), including the associated preferred stock purchase rights issued
pursuant to the Rights Agreement dated as of August 25, 1988, as amended,
between the Company and The First National Bank of Boston, as successor Rights
Agent (collectively, the "Shares"), are not immediately available 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). Such form
may be delivered by hand, facsimile transmission, or mail to the Depositary.
See Section 3 of the Offer to Purchase, dated May 30, 1997 (the "Offer to
Purchase").
The Depositary for the Offer is:
THE BANK OF NEW YORK
By Mail: Facsimile Transmission: By Hand or Overnight
Tender & Exchange (for Eligible Courier:
Department Institutions Only) Tender & Exchange
P.O. Box 11248 (212) 815-6213 Department
Church Street Station 101 Barclay Street
New York, New York 10286- Receive and Deliver
1248 Window
For Confirmation Telephone:
(800) 507-9357 New York, New York 10286
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUMENTS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE,
DOES NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
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" (AS DEFINED IN THE OFFER TO PURCHASE) UNDER THE
INSTRUCTION THERETO, SUCH SIGNATURE GUARANTEES 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 or an
Agent's Message and certificates for Shares to the Depositary within the time
period shown herein. Failure to do so could result in a financial loss to such
Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Sierra Corp., a Delaware corporation and a
wholly owned subsidiary of Owens Corning, a Delaware Corporation ("Parent"),
upon the terms and subject to the conditions set forth in the Offer to
Purchase, and the related Letter of Transmittal, receipt of which are hereby
acknowledged, Shares of the Company, pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase.
Number of Shares Tendered: __________ SIGN HERE
Certificate No(s) (if available): Name(s) of Record Holder(s):
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
(Please Print)
If securities will be tendered by Address(es): ________________________
book-entry transfer: -------------------------------------
(Zip Code)
Name of Tendering Institution:
- ------------------------------------- Area Code and Telephone No(s):
-------------------------------------
Account No.: _____________________ at Signature(s): _______________________
[_] The Depository Trust Company -------------------------------------
[_] Philadelphia Depository Trust
Company
Dated: ________________________, 1997
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings association
or other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program, the New York Stock Exchange Medallion Signature
Guarantee Program, the Stock Exchange Medallion Program, or a bank, broker,
dealer, credit union, savings association or other entity which is an
"eligible guarantor institution," as such term is defined in Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended, guarantees the delivery
to the Depositary of the Shares tendered hereby, together with a properly
completed and duly executed Letter of Transmittal (or manually signed
facsimile(s) thereof) and any other required documents, or an Agent's Message
(as defined in the Offer to Purchase) in the case of a book-entry delivery of
Shares, all within three trading days of the date hereof. A "trading day" is
any day on which the New York Stock Exchange is open for business.
Name of Firm: _______________________ Title: ______________________________
- ------------------------------------- Name: _______________________________
(Authorized Signature) (Please Print or Type)
Address: ____________________________ Area Code and Telephone No.: ________
- ------------------------------------- Dated: ______________________________
(Zip Code)
DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM--CERTIFICATES SHOULD BE
SENT WITH LETTER OF TRANSMITTAL
<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>
GIVE THE NAME AND
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- ------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, the first
individual on the
account(1)
3. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
4. a. The usual revocable The grantor-
savings trust (grantor is trustee(1)
also trustee)
b. So-called trust account The actual
that is not a legal or valid owner(1)
trust under state law
5. Sole proprietorship The owner(3)
GIVE THE NAME AND
FOR THIS TYPE OF ACCOUNT: EMPLOYER
IDENTIFICATION
NUMBER OF --
- ----------------------------------------------------------------
6. Sole proprietorship The owner(3)
7. A valid trust, estate or The legal entity
pension trust (Do not furnish
the identifying
number of the
personal
representative or
trustee unless
the legal entity
itself is not
designated in the
account
title.)(4)
8. Corporate The corporation
9. Association, club, The organization
religious, charitable,
educational, or other
tax-exempt organization
10. Partnership The partnership
11. A broker or registered The broker or
nominee nominee
12. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State or
local governmental, school
district, or prison) that
receives agricultural
program payments
- ---------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a SSN, that person's number must be
furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business
or "doing business as" name. You may use either your social security
number or employment identification number (if you have one).
(4) List first and circle the name of the legal trust, estate or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
---------------------------------------
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF 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 Card, or Form SS-
4, Application for Employer Identification Number (for businesses and all
other entities), or Form W-7 for Individual Taxpayer Identification Number
(for alien individuals required to file U.S. tax returns), at an office of the
Social Security Administration or the Internal Revenue Service.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on all payments include
the following:
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under Section 403(b)(7).
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any political 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.
Payees that may be exempted from backup withholding:
. A corporation.
. A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An entity registered at all times during the tax year under the Invest-
ment 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.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident alien partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
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 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 pay-
er.
. Payments of tax-exempt interest (including exempt-interest dividends un-
der section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Mortgage interest paid to you.
Exempt payees described above should file a Substitute Form W-9 to avoid
possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM,
AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS OR
PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends and patronage dividends that
are not subject to information reporting are also not subject to backup with-
holding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049,
6050A, and 6050N, and their regulations.
PRIVACY ACT NOTICE.-- Section 6109 requires most recipients of dividend, in-
terest or other payments to give taxpayer identification numbers to payers who
must report the payments to the IRS. The IRS uses the numbers for identifica-
tion purposes and to help verify the accuracy of your tax return. Payers must
be given the numbers whether or not recipients are required to file tax re-
turns. Payers must generally withhold 31% of taxable interest, dividend and
certain other payments to a payee who does not furnish a taxpayer identifica-
tion number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your correct taxpayer identification number to a payer, you
are subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or im-
prisonment.
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. The Offer is made only by the Offer to Purchase dated
May 30, 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 in any
jurisdiction in which the Offer or the acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such jurisdiction.
However, the Offeror 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 those jurisdictions where
securities 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 Offeror by Merrill Lynch
Pierce, Fenner & Smith Incorporated (the "Dealer Manager") or 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
OF
FIBREBOARD CORPORATION
AT $55.00 PER SHARE
BY
SIERRA CORP.
A WHOLLY OWNED SUBSIDIARY OF
OWENS CORNING
Sierra Corp., a Delaware corporation (the "Offeror") and a wholly owned
subsidiary of Owens Corning, a Delaware corporation ("Parent"), is offering to
purchase all of the shares of common stock, par value $.01 per share, of
Fibreboard Corporation, a Delaware corporation (the "Company"), including the
associated preferred stock purchase rights issued pursuant to the Rights
Agreement dated as of August 25, 1988, as amended, between the Company and The
First National Bank of Boston, as successor Rights Agent (collectively, the
"Shares"), at a price of $55.00 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated May 30, 1997 (the "Offer to Purchase"), and in
the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, JUNE 26, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER SUCH NUMBER OF
SHARES REPRESENTING A MAJORITY OF THE VOTING POWER OF THE SHARES AT THE DATE
OF EXPIRATION OF THE OFFER (ASSUMING THE EXERCISE OF ALL OPTIONS TO PURCHASE,
AND THE CONVERSION OR EXCHANGE OF ALL SECURITIES CONVERTIBLE OR EXCHANGEABLE
INTO, SHARES OUTSTANDING AT THE EXPIRATION DATE OF THE OFFER), (II) ANY
WAITING PERIOD UNDER THE HSR ACT (AS DEFINED IN THE OFFER TO PURCHASE)
APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR
HAVING BEEN TERMINATED PRIOR TO THE EXPIRATION OF THE OFFER, AND (III) THE
SATISFACTION OF CERTAIN OTHER TERMS AND CONDITIONS.
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of May 27, 1997 (the "Merger Agreement") among Parent, the Offeror and the
Company. The Merger Agreement provides that, among other things, after the
purchase of Shares pursuant to the Offer and the satisfaction of the other
conditions set forth in the Merger Agreement and in accordance with relevant
provisions of the General Corporation Law of the State of Delaware, as amended
(the "DGCL"), the Offeror will be merged with and into the Company (the
"Merger"). At the effective time of the Merger (the "Effective Time"), each
Share issued and outstanding immediately prior to the Effective Time (other
than Shares held in the treasury of the Company, Shares held by any subsidiary
of the Company, Parent, the Offeror or any other wholly owned subsidiary of
Parent, or Shares which are held by stockholders, if any, who properly
exercise their appraisal rights under the DGCL) will be cancelled and
converted into the right to receive $55.00 in cash, or any higher price that
is paid in the Offer, without interest.
<PAGE>
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER AND THE MERGER AGREEMENT, HAS DETERMINED THAT EACH OF THE OFFER AND
THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S
STOCKHOLDERS, AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER
AND TENDER ALL THEIR SHARES PURSUANT TO THE OFFER.
For purposes of the Offer, the Offeror will be deemed to have accepted for
payment, and thereby purchased Shares validly tendered and not properly
withdrawn, if and when the Offeror gives oral or written notice to The Bank of
New York (the "Depositary") of the Offeror's acceptance of such Shares for
payment pursuant to the Offer. In all cases, payment for Shares purchased
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which shall act as agent for tendering stockholders for
the purpose of receiving payment from the Offeror and transmitting payment to
validly tendering stockholders. Under no circumstances will interest on the
purchase price be paid by the Offeror, regardless of any delay in making such
payment. Payment for Shares accepted for payment pursuant to the Offer will be
made only after timely receipt by the Depositary (i) of certificates for such
Shares or timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facilities (as defined in the
Offer to Purchase) pursuant to the procedures set forth in the Offer to
Purchase, (ii) a properly completed and duly executed Letter of Transmittal
(or manually signed facsimile thereof), 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.
If any of the conditions set forth in the Offer to Purchase that relate to
the Offeror's obligations to purchase the Shares are not satisfied by 12:00
Midnight, New York City time, on Thursday, June 26, 1997 (or any other time
then set as the Expiration Date), the Offeror may, subject to the terms of the
Merger Agreement, (i) extend the Offer and, subject to applicable withdrawal
rights, retain all tendered Shares until the expiration of the Offer as so
extended, (ii) subject to complying with applicable rules and regulations of
the Securities and Exchange Commission, accept for payment all Shares so
tendered and not extend the Offer, or (iii) terminate the Offer and not accept
for payment any Shares and return all tendered Shares to tendering
stockholders. The term "Expiration Date" shall mean 12:00 Midnight, New York
City time, on Thursday, June 26, 1997, unless the Offeror shall have extended
the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as
so extended by the Offeror, shall expire.
Subject to the limitations set forth in the Offer and the Merger Agreement,
the Offeror reserves the right (but will not be obligated), at any time or
from time to time in its sole discretion, to extend the period during which
the Offer is open by giving oral or written notice of such extension to the
Depositary and by making a public announcement of such extension. There can be
no assurance that the Offeror will exercise its right to extend the Offer. Any
extension of the period during which the Offer is open will be followed, as
promptly as practicable, by public announcement thereof, such announcement to
be issued not later than 9:00 a.m., New York City Time, on the next business
day after the previously scheduled Expiration Date. During any such extension,
all Shares previously tendered and not withdrawn will remain subject to the
Offer, subject to the rights of a tendering stockholder to withdraw such
stockholder's Shares.
Except as otherwise provided in Section 4 of the Offer to Purchase, tenders
of Shares made pursuant to the Offer are irrevocable, except that Shares
tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date, and, unless theretofore accepted for payment, may also be
withdrawn at any time after July 28, 1997. For a withdrawal to be effective, a
written, telegraphic, telex or facsimile transmission notice of withdrawal
must be timely received by the Depositary at one of its addresses set forth on
the back cover of the Offer to Purchase. Any such notice of withdrawal must
specify the name of the person who tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name of the registered holder of such
Shares, if different from the name of the person who tendered the Shares. If
certificates for Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted
to the Depositary and, unless such certificates
<PAGE>
have been tendered for the account of an Eligible Institution (as defined in
the Offer to Purchase), the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been tendered pursuant
to the procedure for book-entry transfer as set forth in the Offer to
Purchase, any notice of withdrawal must also specify the name and number of
the account of the Book-Entry Transfer Facility to be credited with the
withdrawn Shares. All questions as to the form and validity (including time of
receipt) of a notice of withdrawal will be determined by the Offeror, in its
sole discretion, and its determination shall be final and binding on all
parties.
The information required to be disclosed by Paragraph (e)(1)(vii) of Rule
14d-6 of the General Rules and Regulations under the Securities Exchange Act
of 1934, as amended, is contained in the Offer to Purchase and is incorporated
herein by reference.
The Company has provided to the Offeror its lists of stockholders and
security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase, the related Letter of Transmittal
and other related materials are being mailed to record holders of Shares and
will be mailed to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
stockholder lists or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Dealer Manager
or the Information Agent at their respective addresses as set forth below. The
Offeror will not pay any fees or commissions to any broker or dealer or to any
other person (other than the Dealer Manager and the Information Agent) for
soliciting tenders of Shares pursuant to the Offer. Additional copies of the
Offer to Purchase, the Letter of Transmittal and all other tender offer
materials may be obtained from the Information Agent or from brokers, dealers,
commercial banks and trust companies, and will be furnished promptly at the
Offeror's expense.
The Information Agent for the Offer is:
LOGO
Wall Street
New York, New York 10005
Banks and Brokers call collect (212) 440-9800
All others call Toll Free: 1-800-223-2064
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1305
1-800-436-1019 (Toll Free)
(212) 449-8209 (Call Collect)
May 30, 1997
<PAGE>
EXHIBIT 99
OWENS CORNING
One Owens Corning Parkway
Toledo, Ohio 43659
N E W S
FIBREBOARD CORPORATION
2200 Ross Avenue, Suite 3600
Dallas, TX 75201
- --------------------------------------------------------------------------------
Contact: OWENS CORNING FIBREBOARD CORPORATION
William K. Hamilton Stephen L. DeMaria
Media Relations Corporate Relations
(419) 248-6190 (214) 954-9500
Rhonda L. Brooks
Investor Relations
(419) 248-8485
FOR IMMEDIATE RELEASE
OWENS CORNING AND FIBREBOARD CORPORATION
ANNOUNCE MERGER AGREEMENT
OWENS CORNING TO ACQUIRE FIBREBOARD SHARES FOR $55.00 PER SHARE
TOLEDO, OHIO, AND DALLAS, TEXAS; MAY 28, 1997--Owens Corning (NYSE/TSE: OWC) and
Fibreboard Corporation (AMEX: FBD) today announced that they have entered into a
definitive merger agreement providing for Owens Corning to acquire all of the
outstanding shares of Fibreboard Corporation for $55.00 per share.
Under terms of the merger agreement, approved by the Boards of Directors of both
companies, a wholly owned subsidiary of Owens Corning will launch a cash tender
offer for all of the issued and outstanding shares of Fibreboard common stock at
$55.00 per share, net to the seller. The tender offer will be subject to
customary conditions and is expected to commence no later than Tuesday, June 3,
1997.
Following the tender offer, and assuming the purchase by the Owens Corning
subsidiary of a majority of the fully diluted outstanding Fibreboard shares
pursuant to the tender offer, the remaining outstanding Fibreboard shares would
be converted in the merger into $55.00 per share, in cash. As a result of the
merger, Fibreboard will become a wholly owned subsidiary of Owens Corning.
<PAGE>
The merger, Owens Corning's sixteenth acquisition during the past three years
and the largest to date, will substantially strengthen the company's offering in
building materials systems and provide Fibreboard the resources for continued
growth. Assuming expected synergies, the merger is expected to be accretive to
Owens Corning in 1997 and on an ongoing basis, excluding one-time, non-recurring
fees. The companies expect the transaction to close early in the third quarter
of 1997.
Owens Corning is a world leader in high performance glass fiber composites and
building materials with sales in 1996 of $3.8 billion. Fibreboard is a leading
producer of vinyl siding and other residential and industrial building
materials. Sales in 1996 were $469 million. On a pro-forma basis--assuming
Fibreboard's 1997 acquisitions had been completed on January 1, 1997--the
company's sales this year would be expected to be close to $800 million.
"Merging Fibreboard's businesses with Owens Corning will substantially
strengthen our offering of building materials systems and make us a major
producer and marketer of vinyl siding, one of the fastest growing products in
the building materials market," said Glen H. Hiner, Owens Corning chairman and
chief executive officer.
"During the last three years Fibreboard has become one of the top producers of
vinyl siding and accessories in North America," said Hiner. "The company is
among the industry's low-cost producers and it has an extensive network of
distribution centers for both vinyl siding and windows. These products will
become an integral part of our low-maintenance exterior system for the home."
Hiner said Fibreboard's other products--manufactured stone and industrial
insulation products--also complement the company's portfolio of building
materials.
John D. Roach, Fibreboard's chairman and CEO, said, "In the six years I have
served as CEO of Fibreboard, my commitment has consistently been to strengthen
the underlying business units, resolve the company's asbestos situation,
develop a growth strategy and provide superior shareholder value. As a result,
Fibreboard has become one of the most exciting, fastest growing entities in the
building products sector.
"This merger catapults the existing growth platforms to a new, higher level of
performance potential," Roach said. "The transaction brings immediate,
excellent cash value to our shareholders and also benefits the constituent
business units of Fibreboard. Our shareholders should be pleased as should
Owens Corning. They are acquiring an outstanding company."
<PAGE>
According to David Devonshire, Owens Corning's senior vice president and chief
financial officer, the transaction will be financed using a long-term bank
credit facility underwritten by a major financial institution. Devonshire also
indicated that the company remains committed to maintaining its investment grade
credit ratings and intends to implement capital structure modifications to
achieve that objective.
Owens Corning has been acquiring businesses and assets in recent years as part
of the company's growth agenda. Acquisitions during the past three years
accounted for $450 million of the company's sales in 1996.
Last September, Owens Corning introduced a new strategic thrust for the company
called System Thinking/tm/. The first implementation of the new initiative,
System Thinking for the Home/tm/, responds to the fact that a majority of
consumers want integrated systems that address whole-project needs. The merger
with Fibreboard will substantially strengthen the ability to offer exterior
systems for the home.
Headquartered in Dallas, Texas, Fibreboard is currently one of the five largest
producers of vinyl siding and accessories with plants in Georgia, Missouri and
North Carolina in the U.S., and British Columbia and Ontario in Canada.
Marketing products under the brand names Norandex and Vytec, the business also
operates more than 130 company-owned distribution centers in 32 states. The
company employs 3,400 people and operates a total of 21 manufacturing plants
in the U.S. and Canada.
Fibreboard's Stone Products business is the pioneer and leading producer of
manufactured stone, which it sells under the Cultured Stone/R/ brand.
Fibreboard's Pabco business produces calcium silicate insulation for industrial
pipe applications. The business is also a market leader in metal jacketing for
pipe insulation and a specialty producer of fire safety products.
Earlier this month, Fibreboard completed the acquisition of Fabwel, Inc., a
privately held, major producer and supplier of customized exterior components,
including vinyl siding, for the manufactured housing, recreational vehicle and
transportation industries.
Headquartered in Toledo, Ohio, Owens Corning employs 19,000 people in more than
30 countries.
Internet websites for the two companies can be found at
http://www.owenscorning.com, www.norandex.com and www.culturedstone.com.
# # #
<PAGE>
EXHIBIT (a)(9)
NEWS
OWENS CORNING
One Owens Corning Parkway
Toledo, Ohio 43659
- --------------------------------------------------------------------------------
Contact: Owens Corning
William K. Hamilton
Media Relations
(419) 248-6190
Rhonda L. Brooks
Investor Relations
(419) 248-8485
Owens Corning Commences Tender Offer for Fibreboard
Toledo, OH -- May 30, 1997 -- Owens Corning (NYSE/TSE:OWC) announced that a
wholly owned subsidiary of Owens Corning has commenced its previously announced
tender offer for shares of Common Stock, par value $.01 per share, including the
associated preferred stock purchase rights, of Fibreboard Corporation at $55.00
per share, net to the seller in cash. The tender offer is being made pursuant to
an Agreement and Plan of Merger, dated as of May 27, 1997. The tender offer is
scheduled to expire on Thursday, June 26, 1997.
The Bank of New York is the depositary for the tender offer. The dealer
manager is Merrill Lynch & Co. For additional information regarding the tender
and delivery procedures and conditions of the offer, interested parties should
refer to the Offer to Purchase and related transmittal documents, copies of
which can be obtained from Georgeson & Company, Inc., the information agent for
the offer, at 800-223-2064.
Owens Corning is a world leader in high performance glass fiber composites
and building materials with 1996 sales of $3.8 billion.
<PAGE>
Exhibit (b)(1)
May 16, 1997
Owens Corning
One Owens Corning Parkway
Toledo, Ohio 43659
Attention: David W. Devonshire
Senior Vice President and Chief Financial Officer
Re: $2,000,000,000 Revolving Credit Facility Commitment Letter
----------------------------------------------------------
Ladies and Gentlemen:
Owens Corning (the "Borrower") has advised Credit Suisse First Boston
("CSFB") that it intends to acquire, directly or indirectly, all of the
outstanding capital stock of Fibreboard Corporation ("Sierra"). We understand
that the acquisition will take the form of a friendly tender offer (the "Tender
Offer") by the Borrower or a wholly-owned subsidiary thereof ("Acquisition
Corp.") for all of the outstanding shares of capital stock of Sierra, and the
purchase of the Sierra shares tendered pursuant to the Tender Offer. We further
understand that, as promptly as possible following the consummation of the
Tender Offer and the purchase of the tendered Sierra shares, Acquisition Corp.
and Sierra will merge (the "Merger").
CSFB is pleased to confirm to the Borrower that, subject to the terms and
conditions referred to in this letter and in the attached Summary of Proposed
Terms and Conditions (the "Summary of Terms and Conditions"), CSFB is willing to
provide to the "Borrowers", as described under the caption "Borrowers" in the
Summary of Terms and Conditions, a credit facility of up to $2,000,000,000 (the
"Facility") for the purposes specified under the caption "Use of Proceeds" in
the Summary of Terms and Conditions. As indicated in the Summary of Terms and
Conditions, a portion of the Facility will be used to finance the acquisition of
Sierra shares pursuant to the Tender Offer and the subsequent Merger.
You have informed us that the merger agreement will require that the Board
of Directors of Sierra recommend to the shareholders of Sierra that they tender
their shares pursuant to the Tender Offer.
The Facility would be provided by CSFB pursuant to the terms of, and shall
become effective only upon the execution and delivery of, mutually satisfactory
credit
<PAGE>
agreements and other definitive loan documentation incorporating terms and
conditions set forth herein and in the Summary of Terms and Conditions. Although
CSFB is committing to provide all of the Facility on such terms and conditions,
CSFB expects to act as agent for a syndicate of financial institutions (together
with CSFB, the "Lenders") to provide all or a portion of the Facility.
It is agreed that CSFB will act as the sole administrative agent for, and
sole arranger and syndication manager of, the Facility and that no additional
agents, managers or arrangers will be appointed without the prior written
consent of CSFB. CSFB does, however, anticipate that a limited number of co-
agents will be designated by CSFB.
You agree (a) to assist CSFB in forming any such syndicate and to provide
CSFB and the other Lenders, promptly upon request, with all information
reasonably requested by them to complete successfully the syndication,
including, but not limited to, (i) an information package for delivery to
potential syndicate members and participants, and (ii) all information and
projections prepared by you or your advisers relating to the transactions
described herein; (b) to coordinate any other financings by you or any of your
affiliates with the Lenders' syndication effort and to refrain from any such
financings during such syndication process unless otherwise agreed to by CSFB;
(c) to use your best efforts to ensure that CSFB's syndication efforts benefit
from your existing lending relationships; and (d) to make appropriate senior
officers and representatives of the Borrower and its subsidiaries available to
participate in information meetings for potential syndicate members and
participants at such times and places as CSFB may reasonably request.
You represent and warrant and covenant that:
(1) all information which has been or is hereafter made available to
CSFB by you or any of your representatives in connection with the
transactions contemplated hereby is and will be complete and correct in all
material respects and does not and will not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make
the statements contained therein not materially misleading in light of the
circumstances under which such statements are made; and
(2) all financial projections that have been or are hereafter
prepared by you and made available to CSFB or any other participant in the
Facility have been or will be prepared in good faith based upon reasonable
assumptions.
You agree to supplement the information and projections referred to in clauses
(1) and (2) above from time to time until completion of the syndication so that
the representations and warranties in the preceding sentence remain correct. In
arranging and syndicating the Facility, CSFB will use and rely on such
information and projections without independent verification thereof.
-2-
<PAGE>
Upon the acceptance of this letter by you, CSFB shall have the right to
review and approve all public announcements and filings relating to the
transactions contemplated hereby that refer, directly or indirectly, to the
Facility, to all or any of the Lenders or to this letter or the Fee Letter
referred to below before they are made (such approval not to be unreasonably
withheld).
In connection with the syndication of the Facility, CSFB may, in its
discretion, allocate to other Lenders portions of any fees payable to CSFB in
connection with the Facility. You agree that no Lender will receive any
compensation of any kind for its participation in the Facility, except as
expressly provided for in this letter or in the Fee Letter referred to below.
CSFB's commitment hereunder is subject to the following conditions, among
others: (a) after the date hereof there shall not have occurred any material
change in or material disruption of financial, banking or capital market
conditions that in the reasonable opinion of CSFB materially and adversely
affects the satisfactory syndication of the Facility; (b) since December 31,
1996, there shall not have occurred any material adverse change in the business,
assets, liabilities, financial condition, results of operations or business or
financial prospects of the Borrower and its subsidiaries, or Sierra and its
subsidiaries, except as set forth in the report of the Borrower to the
Securities and Exchange Commission on Form 10-Q for the quarter ended March 31,
1997; (c) definitive documentation with respect to the Facility satisfactory in
form and substance to CSFB and its counsel shall have been negotiated, executed
and delivered prior to July 31, 1997, and such documentation shall contain the
terms and conditions set forth in the Summary of Terms and Conditions and such
other indemnities, covenants, representations and warranties, events of default,
conditions precedent and other terms and conditions as shall be satisfactory in
all respects to CSFB; (d) our review of the merger agreement, tender offer
documents and other documents relating to the acquisition, and our reasonable
satisfaction with the terms and conditions thereof; (e) our not becoming aware
after the date hereof of any information or other matter which is inconsistent
in a material and adverse manner with any information or other matter disclosed
to us prior to the date hereof; (f) compliance by the Borrower with all terms
and conditions set forth in this letter; and (g) the additional conditions set
forth in the Summary of Terms and Conditions.
In all events, CSFB shall not be responsible or liable for any damages
which may be alleged as a result of its failure, in accordance with the terms of
this letter, to provide the Facility.
The terms of this letter as to reimbursement and indemnification shall
terminate only at the time, and to the extent, they are expressly superseded by
definitive loan documentation relating to the Facility. Matters which are not
covered by the provisions of this letter and the Summary of Terms and Conditions
are subject to the approval of CSFB and you.
It is understood that, whether or not any loans are made or any loan
documents are executed, you will reimburse CSFB for, or pay directly, all
reasonable costs and expenses
-3-
<PAGE>
(including, without limitation, the reasonable fees and expenses of counsel to
CSFB and CSFB's syndication and other reasonable out-of-pocket expenses) arising
in connection with the preparation, execution and delivery of this letter and
the definitive financing agreements (whether or not executed). You further agree
to indemnify and hold harmless each Lender (including CSFB) and each director,
officer, employee, affiliate and agent thereof (each, an "Indemnified Person")
against and to reimburse each Indemnified Person, upon its demand, for, all
losses, claims, damages, liabilities and other expenses ("Losses") to which such
Indemnified Person may become subject insofar as such Losses arise out of or in
any way relate to or result from the acquisition, this letter or the financing
contemplated hereby, including, without limitation, Losses consisting of legal
or other expenses incurred in connection with investigating, defending or
participating in any legal proceeding relating to any of the foregoing (whether
or not such Indemnified Person is a party thereto); provided, that the foregoing
will not apply to any Losses to the extent they are found by a final decision of
a court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnified Person. Your obligations under this
paragraph shall remain effective whether or not definitive financing
documentation is executed and notwithstanding any termination of this letter.
Neither CSFB nor any other Indemnified Person shall be responsible or liable to
you or any other person for consequential damages which may be alleged as a
result of this letter or the financing contemplated hereby.
You should be aware that CSFB or its affiliates may from time to time
provide financing or other services to parties whose interests may conflict with
yours; however, in accordance with its long-standing policy to hold in
confidence the affairs of its customers, CSFB and its affiliates will not
furnish information obtained from you to any of its other customers.
The provisions of this letter are supplemented as set forth in a separate
fee letter dated the date hereof from us to you (the "Fee Letter") and are
subject to the terms of such Fee Letter. By executing this letter, you
acknowledge that this letter (including the Summary of Terms and Conditions) and
the Fee Letter are the only agreements between you and CSFB with respect to the
Facility and set forth the entire understanding of the parties with respect
thereto. Neither this letter nor the Fee Letter may be changed except pursuant
to a writing signed by each of the parties thereto. This letter shall be
governed by, and construed in accordance with, the law of the State of New York.
By your acceptance hereof, you agree that neither this letter, the Summary
of Terms and Conditions nor the Fee Letter, nor any of their terms or substance,
shall be disclosed, directly or indirectly, to any other person except to your
employees, agents and advisers who are directly involved in the consideration of
this matter or as may be compelled to be disclosed in a judicial or
administrative proceeding or as otherwise required by law; provided, that you
may freely disclose this letter (but not the Fee Letter or its contents, except
to the extent required by applicable law), and its terms and substance, at any
time following your acceptance hereof and payment of any fees specified in the
Fee Letter to be due and payable upon such acceptance.
-4-
<PAGE>
If you are in agreement with the foregoing, please sign and return to CSFB
the enclosed copies of this letter and the Fee Letter, together with the fees
referred to therein, no later than 5:00 p.m., New York time, on May 30, 1997.
This offer shall terminate at such time unless prior thereto we shall have
received signed copies of such letters and payment of such fees.
We look forward to working with you on this transaction.
Very truly yours,
CREDIT SUISSE FIRST BOSTON
By: -------------------------------
Name:
Title:
By:
-------------------------------
Name:
Accepted and agreed to as of
the date first above written:
OWENS CORNING
By:
----------------------------------
Name:
Title:
-5-
<PAGE>
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
AMONG
OWENS CORNING,
SIERRA CORP.
AND
FIBREBOARD CORPORATION
DATED AS OF MAY 27, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
THE OFFER.................................................. 1
SECTION 1.1 The Offer.................................................. 1
SECTION 1.2 Company Actions............................................ 3
ARTICLE II
THE MERGER................................................. 5
SECTION 2.1 The Merger................................................. 5
SECTION 2.2 Closing.................................................... 5
SECTION 2.3 Effective Time............................................. 5
SECTION 2.4 Effects of the Merger...................................... 6
SECTION 2.5 Certificate of Incorporation and By-laws;
Officers and Directors................................... 6
ARTICLE III
EFFECT OF THE MERGER ON THE STOCK OF THE
CONSTITUENT CORPORATIONS; SURRENDER OF CERTIFICATES...... 7
SECTION 3.1 Effect on Stock............................................ 7
SECTION 3.2 Surrender of Certificates.................................. 8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............. 10
SECTION 4.1 Organization............................................... 10
SECTION 4.2 Subsidiaries............................................... 11
SECTION 4.3 Capital Structure.......................................... 11
SECTION 4.4 Authority.................................................. 12
SECTION 4.5 Consent and Approvals; No Violations....................... 12
SECTION 4.6 SEC Documents and Other Reports............................ 14
SECTION 4.7 Absence of Material Adverse Change......................... 14
SECTION 4.8 Information Supplied....................................... 15
SECTION 4.9 Compliance with Laws....................................... 16
SECTION 4.10 Tax Matters................................................ 16
SECTION 4.11 Liabilities................................................ 18
SECTION 4.12 Benefit Plans; Employees and Employment Practices.......... 18
SECTION 4.13 Litigation................................................. 21
SECTION 4.14 Environmental Matters...................................... 21
SECTION 4.15 Certain Agreements......................................... 22
SECTION 4.16 Asbestos Litigation Matters................................ 22
SECTION 4.17 State Takeover Statutes; Charter Provisions;
Rights Agreement......................................... 24
SECTION 4.18 Brokers.................................................... 24
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB........... 25
SECTION 5.1 Organization............................................... 25
SECTION 5.2 Authority.................................................. 25
SECTION 5.3 Consents and Approvals; No Violations...................... 25
SECTION 5.4 Information Supplied....................................... 27
SECTION 5.5 Interim Operations of Sub.................................. 27
SECTION 5.6 Brokers.................................................... 28
SECTION 5.7 Financing.................................................. 28
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS.................. 28
SECTION 6.1 Conduct of Business by the Company Pending
the Merger............................................... 28
SECTION 6.2 No Solicitation............................................ 33
SECTION 6.3 Third Party Standstill Agreements.......................... 35
SECTION 6.4 Disclosure to Parent....................................... 35
SECTION 6.5 Conduct of Asbestos Litigation............................. 36
ARTICLE VII
ADDITIONAL AGREEMENTS...................................... 36
SECTION 7.1 Stockholder Approval; Preparation of
Proxy Statement.......................................... 36
SECTION 7.2 Access to Information...................................... 38
SECTION 7.3 Fees and Expenses.......................................... 38
SECTION 7.4 Options.................................................... 39
SECTION 7.5 Public Announcements....................................... 40
SECTION 7.6 Real Estate Transfer Tax................................... 40
SECTION 7.7 State Takeover Laws........................................ 41
SECTION 7.8 Indemnification; Directors and Officers
Insurance.............................................. 41
SECTION 7.9 Notification of Certain Matters............................ 41
SECTION 7.10 Board of Directors......................................... 42
SECTION 7.11 Reasonable Best Efforts.................................... 43
SECTION 7.12 Certain Litigation......................................... 44
SECTION 7.13 Employee Benefits.......................................... 44
SECTION 7.14 Severance Policy and Other Agreements...................... 45
SECTION 7.15 1997 Bonus................................................. 45
SECTION 7.16 Credit for Deductibles..................................... 45
SECTION 7.17 401(k)/Profit Sharing Contributions for 1997............... 46
ARTICLE VIII
CONDITIONS PRECEDENT....................................... 46
SECTION 8.1 Conditions to Each Party's Obligation to
Effect the Merger........................................ 46
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE IX
TERMINATION AND AMENDMENT.................................. 47
SECTION 9.1 Termination................................................ 49
SECTION 9.2 Effect of Termination...................................... 49
SECTION 9.3 Amendment.................................................. 49
SECTION 9.4 Extension; Waiver.......................................... 49
ARTICLE X
GENERAL PROVISIONS......................................... 50
SECTION 10.1 Non-Survival of Representations and
Warranties and Agreements................................ 50
SECTION 10.2 Notices.................................................... 50
SECTION 10.3 Interpretation............................................. 51
SECTION 10.4 Counterparts............................................... 51
SECTION 10.5 Entire Agreement; No Third-Party
Beneficiaries............................................ 51
SECTION 10.6 Governing Law.............................................. 52
SECTION 10.7 Assignment................................................. 52
SECTION 10.8 Severability............................................... 52
SECTION 10.9 Enforcement of This Agreement.............................. 52
SECTION 10.10 Obligations of Subsidiaries................................ 52
SECTION 10.11 Asbestos Agreements........................................ 53
</TABLE>
Exhibit A - Conditions of the Offer
iii
<PAGE>
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER, dated as of May 27, 1997 (this "Agreement"),
---------
among Owens Corning, a Delaware corporation ("Parent"), Sierra Corp., a Delaware
------
corporation and a wholly-owned subsidiary of Parent ("Sub"), and Fibreboard
---
Corporation, a Delaware corporation (the "Company") (Sub and the Company being
-------
hereinafter collectively referred to as the "Constituent Corporations").
------------------------
W I T N E S S E T H:
--------------------
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have unanimously approved the acquisition of the Company by Parent pursuant to a
tender offer (as it may be amended from time to time as permitted under this
Agreement, the "Offer") by Sub for all of the outstanding shares of Common
-----
Stock, par value $.01 per share (the "Common Stock"), together with the related
------------
Rights (as defined in Section 4.3), of the Company, at a price of $55.00 per
-----------
share (the "Offer Price"), net to the seller in cash, without interest thereon,
-----------
followed by a merger (the "Merger") of Sub with and into the Company upon the
------
terms and subject to the conditions set forth herein (the shares of Common Stock
subject to the Offer, together with the related Rights, are hereinafter referred
to as the "Shares"); and
------
WHEREAS, the Board of Directors of the Company has unanimously (i)
determined that the consideration to be paid for each Share in the Offer and the
Merger is fair to and in the best interests of the stockholders of the Company
and (ii) approved and adopted this Agreement and the transactions contemplated
hereby.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained, the parties agree as follows:
ARTICLE I
THE OFFER
---------
SECTION 1.1 The Offer. (a) Provided that this Agreement shall not have
--------- --------
been terminated in accordance with Section 9.1 and subject to the provisions of
-----------
this Agreement, as promptly as practicable but in no event later than five
business days after the date of the public announcement by Parent and the
Company of this Agreement, Sub shall, and Parent shall cause Sub to, commence
the Offer. The obligation of Sub to, and of Parent
<PAGE>
to cause Sub to, commence the Offer and accept for payment, and pay for, any
Shares tendered pursuant to the Offer shall be subject only to the conditions
set forth in Exhibit A (the "Offer Conditions") (any of which may be waived in
--------- ----------------
whole or in part by Sub in its sole discretion, provided that, without the prior
--------
written consent of the Company, Sub shall not waive the Minimum Condition (as
defined in Exhibit A)). Sub expressly reserves the right to modify the terms of
---------
the Offer, except that, without the prior written consent of the Company, Sub
shall not (i) reduce the number of Shares to be purchased in the Offer, (ii)
reduce the Offer Price, (iii) impose any conditions to the Offer in addition to
the Offer Conditions or modify the Offer Conditions (other than to waive any
Offer Conditions to the extent permitted by this Agreement), (iv) except as
provided in the next sentence, extend the Offer, (v) change the form of
consideration payable in the Offer or (vi) make any other change or modification
in any of the terms of the Offer in any manner that is adverse to the holders of
Shares. Notwithstanding the foregoing, Sub may, without the consent of the
Company, (i) extend the Offer, if at the scheduled or extended expiration date
of the Offer any of the Offer Conditions shall not be satisfied or waived, until
such time as such conditions are satisfied or waived, (ii) extend the Offer for
any period required by any rule, regulation, interpretation or position of the
Securities and Exchange Commission (the "SEC") or the staff thereof applicable
---
to the Offer and (iii) extend the Offer for a period of up to five business days
if, on any scheduled expiration date on which the Offer Conditions shall have
been satisfied or waived, the number of Shares that have been validly tendered
and not withdrawn represent more than 70% of the voting power of the shares of
Common Stock (calculated as described in Annex A), but less than 90% of the
voting power of the then issued and outstanding shares of Common Stock. Parent
and Sub each agrees that Sub will not terminate the Offer between scheduled
expiration dates (except in the event that this Agreement is terminated pursuant
to Section 9.1) and that, in the event that Sub would otherwise be entitled to
-----------
terminate the Offer at any scheduled expiration date thereof due to the failure
of one or more of the Offer Conditions, unless this Agreement shall have been
terminated pursuant to Section 9.1, Sub shall, and Parent shall cause Sub to,
-----------
extend the Offer until such date as the Offer Conditions have been satisfied or
such later date as required by applicable law; provided, however, that nothing
-------- -------
herein shall require Sub to extend the Offer beyond the Outside Date (as defined
in Section 9.1). Subject to the terms and conditions of the Offer and this
-----------
Agreement, Sub shall, and Parent shall cause Sub to, accept for payment and pay
for, all Shares validly tendered and not withdrawn pursuant to the Offer that
Sub is permitted to accept for payment under applicable law, and pay for,
pursuant to the Offer as soon as practicable after the expiration of the Offer.
If this Agreement
-2-
<PAGE>
is terminated by either Parent or Sub or by the Company, Sub shall, and Parent
shall cause Sub to, terminate promptly the Offer.
(b) As soon as reasonably practicable on the date of commencement of the
Offer, Parent and Sub shall file with the SEC a Tender Offer Statement on
Schedule 14D-1 (the "Schedule 14D-1") with respect to the Offer, which shall
--------------
contain an offer to purchase and a related letter of transmittal and summary
advertisement (such Schedule 14D-1 and the documents included therein pursuant
to which the Offer will be made, together with any supplements or amendments
thereto, the "Offer Documents"), and Parent and Sub shall cause the Offer
---------------
Documents to be disseminated to holders of Shares as and to the extent required
by applicable federal securities laws. Parent, Sub and the Company each agrees
promptly to correct any information provided by it for use in the Offer
Documents if and to the extent that such information shall have become false or
misleading in any material respect, and Parent and Sub further agree to take all
steps necessary to cause the Schedule 14D-1 as so corrected to be filed with the
SEC and the other Offer Documents as so corrected to be disseminated to holders
of Shares, in each case as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given reasonable
opportunity to review and comment upon the Offer Documents prior to their filing
with the SEC or dissemination to the stockholders of the Company. Parent and Sub
agree to provide the Company and its counsel any comments Parent, Sub or their
counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments.
(c) Parent shall provide or cause to be provided to Sub on a timely basis
all funds necessary to accept for payment, and pay for, any Shares that Sub is
permitted to accept for payment under applicable law and pay for, pursuant to
the Offer.
SECTION 1.2 Company Actions. (a) The Company hereby approves of and
---------------
consents to the Offer and represents and warrants that the Board of Directors of
the Company, at a meeting duly called and held, at which all directors were
present, duly and unanimously adopted resolutions approving this Agreement, the
Offer and the Merger, determining that the Offer and the Merger are fair to, and
in the best interests of, the Company's stockholders and recommending that
holders of Shares accept the Offer and that the Company's stockholders approve
the Merger (it being understood that, notwithstanding anything in this Agreement
to the contrary, if the Company's Board of Directors modifies or withdraws its
recommendation in accordance with the terms of Section 6.2(b), such modification
--------------
or withdrawal shall not constitute a breach of this Agreement). The Company
represents
-3-
<PAGE>
and warrants that its Board of Directors has received the written opinion of
Dillon, Read & Co. Inc. ("Dillon Read") that, as of the date hereof, the
-----------
proposed consideration to be offered to stockholders pursuant to the Offer and
the Merger is fair to the Company's stockholders from a financial point of view.
The Company has been authorized by Dillon Read to permit, subject to prior
review and consent by Dillon Read (such consent not to be unreasonably
withheld), the inclusion of such fairness opinion (or a reference thereto) in
the Offer Documents and in the Schedule 14D-9 referred to below. The Company
hereby consents to the inclusion in the Offer Documents of the recommendation of
the Company's Board of Directors described in this Section 1.2(a) (subject to
--------------
the right of the Board of Directors to modify or withdraw such recommendation in
accordance with Section 6.2(b)).
--------------
(b) As soon as reasonably practicable on the date the Offer Documents are
filed with the SEC, the Company shall file with the SEC a Solicitation/
Recommendation Statement on Schedule 14D-9 with respect to the Offer (such
Schedule 14D-9, as amended from time to time, the "Schedule 14D-9") containing
--------------
the recommendation described in Section 1.2(a) (subject to the right of the
--------------
Board of Directors to modify or withdraw such recommendation in accordance with
Section 6.2(b)) and shall mail a copy of the Schedule 14D-9 to the stockholders
- --------------
of the Company. The Company shall cooperate with Parent in mailing or otherwise
disseminating the Schedule 14D-9 with the appropriate Offer Documents to the
Company's stockholders. Each of the Company, Parent and Sub agrees promptly to
correct any information provided by it for use in the Schedule 14D-9 if and to
the extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so
amended or supplemented to be filed with the SEC and disseminated to the
Company's stockholders, in each case as and to the extent required by applicable
federal securities laws. Parent and its counsel shall be given reasonable
opportunity to review and comment upon the Schedule 14D-9 prior to its filing
with the SEC or dissemination to stockholders of the Company. The Company
agrees to provide Parent and its counsel any comments the Company or its counsel
may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments.
(c) In connection with the Offer, the Company shall cause its transfer
agent to furnish Sub promptly with mailing labels containing the names and
addresses of the record holders of Shares as of a recent date and of those
persons becoming record holders subsequent to such date, together with copies of
all lists of stockholders, security position listings and computer files and all
other information in the Company's
-4-
<PAGE>
possession or control regarding the beneficial owners of Shares, and shall
furnish to Sub such information and assistance (including updated lists of
stockholders, security position listings and computer files) as Parent or Sub
may reasonably request in communicating the Offer to the Company's stockholders.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent and Sub and their affiliates, associates and
agents shall hold in confidence the information contained in any such labels,
listings and files, will use such information only in connection with the Offer
and the Merger and, if this Agreement shall be terminated, will promptly, upon
request, deliver to the Company or destroy, and will use their reasonable best
efforts to cause their affiliates, associates and agents to deliver or destroy,
all copies of such information then in their possession or control.
ARTICLE II
THE MERGER
----------
SECTION 2.1 The Merger. Upon the terms and subject to the conditions
----------
hereof, and in accordance with the General Corporation Law of the State of
Delaware (the "DGCL"), Sub shall be merged with and into the Company at the
----
Effective Time (as defined in Section 2.3). Following the Merger, the separate
-----------
corporate existence of Sub shall cease and the Company shall continue as the
surviving corporation (the "Surviving Corporation") and shall succeed to and
---------------------
assume all the rights and obligations of Sub and the Company in accordance with
the DGCL. At the election of Parent, any direct or indirect wholly owned
Subsidiary (as defined in Section 10.3) of Parent may be substituted for Sub as
------------
a constituent corporation in the Merger. In such event, the parties agree to
execute an appropriate amendment to this Agreement in order to reflect the
foregoing.
SECTION 2.2 Closing. The closing of the Merger will take place at 10:00
-------
a.m. on a date to be specified by Parent or Sub, which shall be no later than
the second business day after satisfaction or waiver of the conditions set forth
in Article VIII (the "Closing Date"), at the offices of Sidley & Austin, One
------------ ------------
First National Plaza, Chicago, Illinois 60603, unless another date, time or
place is agreed to in writing by the parties hereto.
SECTION 2.3 Effective Time. The Merger shall become effective when a
--------------
Certificate of Merger or, if applicable, a Certificate of Ownership and Merger
(each, the "Certificate of
--------------
-5-
<PAGE>
Merger"), executed in accordance with the relevant provisions of the DGCL, is
- ------
duly filed with the Secretary of State of the State of Delaware, or at such
other time as Sub and the Company shall agree should be specified in the
Certificate of Merger. When used in this Agreement, the term "Effective Time"
--------------
shall mean the later of the date and time at which the Certificate of Merger is
duly filed with the Secretary of State of the State of Delaware or such later
time established by the Certificate of Merger. The filing of the Certificate of
Merger shall be made as soon as practicable after the satisfaction or waiver of
the conditions to the Merger set forth herein.
SECTION 2.4 Effects of the Merger. The Merger shall have the effects set
---------------------
forth in the DGCL.
SECTION 2.5 Certificate of Incorporation and By-laws; Officers and
------------------------------------------------------
Directors. (a) The Certificate of Incorporation of the Company, as in effect
- ---------
immediately prior to the Effective Time, shall be amended as of the Effective
Time so that (i) Article NINTH of such Certificate of Incorporation is deleted
in its entirety and (ii) Article FOURTH of such Certificate of Incorporation is
amended to read in its entirety as follows: "The total number of shares of all
classes of stock that the corporation shall have authority to issue is 1,000
shares of Common Stock, par value $.01 per share." As so amended, such
Certificate of Incorporation shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.
(b) The By-Laws of the Company, as in effect immediately prior to the
Effective Time, shall be the By-laws of the Surviving Corporation until
thereafter changed or amended as provided therein, by the Certificate of
Incorporation of the Surviving Corporation or by applicable law.
(c) The directors of Sub immediately prior to the Effective Time shall be
the directors of the Surviving Corporation, until the next annual meeting of
stockholders (or the earlier of their resignation or removal) and until their
respective successors are duly elected and qualified, as the case may be.
(d) The officers of the Company immediately prior to the Effective Time
shall be the officers of the Surviving Corporation until the earlier of their
resignation or removal and until their respective successors are duly elected
and qualified, as the case may be.
-6-
<PAGE>
ARTICLE III
EFFECT OF THE MERGER ON THE STOCK OF THE
----------------------------------------
CONSTITUENT CORPORATIONS; SURRENDER OF CERTIFICATES
---------------------------------------------------
SECTION 3.1 Effect on Stock. As of the Effective Time, by virtue of the
---------------
Merger and without any action on the part of Sub, the Company or the holders of
any securities of the Constituent Corporations:
(a) Capital Stock of Sub. Each issued and outstanding share of capital
--------------------
stock of Sub shall be converted into and become one validly issued, fully paid
and nonassessable share of Common Stock, par value $.01 per share, of the
Surviving Corporation.
(b) Treasury Stock and Parent Owned Stock. Each share of Common Stock of
-------------------------------------
the Company (and related Right) (including, without limitation, the Shares
purchased pursuant to the Offer) owned by the Company, any Subsidiary of the
Company, Parent, Sub or any other Subsidiary of Parent shall automatically be
canceled and retired and shall cease to exist, and no consideration shall be
delivered in exchange therefor.
(c) Conversion of Shares. Subject to Section 3.1(d), each holder of a
-------------------- --------------
Share issued and outstanding (other than shares to be canceled in accordance
with Section 3.1(b)), shall be canceled and become the right to receive from the
--------------
Surviving Corporation in cash, without interest, the price paid in the Offer
(the "Merger Consideration"). The Merger Consideration shall be allocated $.01
--------------------
to the Right and the balance of the Merger Consideration to the share of Common
Stock. As of the Effective Time, all such Shares shall be canceled in
accordance with this paragraph, and when so canceled, shall no longer be
outstanding and shall automatically be retired and shall cease to exist, and
each holder of a certificate representing any such Shares shall cease to have
any rights with respect thereto, except the right to receive the Merger
Consideration, without interest.
(d) Shares of Dissenting Stockholders. Notwithstanding anything in this
---------------------------------
Agreement to the contrary, any issued and outstanding Shares held by a person (a
"Dissenting Stockholder") who has not voted in favor of or consented to the
----------------------
Merger and complies with all the provisions of Delaware law concerning the right
of holders of Shares to require appraisal of their Shares ("Dissenting Shares")
-----------------
shall not be converted as described in Section 3.1(c), but shall become the
--------------
right to receive such consideration as may be determined to be due to such
Dissenting Stockholder pursuant to Delaware law. If, after the Effective Time,
such Dissenting Stockholder withdraws his demand for
-7-
<PAGE>
appraisal or fails to perfect or otherwise loses his right of appraisal, in any
case pursuant to the DGCL, his Shares shall be deemed to be canceled as of the
Effective Time and become the right to receive the Merger Consideration
allocated as provided in Section 3.1(c). The Company shall give Parent (i)
--------------
prompt notice of any demands for appraisal of shares received by the Company and
(ii) the opportunity to participate in and direct all negotiations and
proceedings with respect to any such demands. The Company shall not, without the
prior written consent of Parent, make any payment with respect to, or settle,
offer to settle or otherwise negotiate, any such demands.
SECTION 3.2 Surrender of Certificates. (a) Paying Agent. Prior to the
------------------------- ------------
Effective Time, Parent shall designate a bank or trust company who shall be
reasonably satisfactory to the Company to act as paying agent in the Merger (the
"Paying Agent"), and on or prior to the Effective Time, Parent shall make
------------
available, or cause the Surviving Corporation to make available, to the Paying
Agent cash in an amount necessary for the payment of the Merger Consideration as
provided in Section 3.1 upon surrender of certificates representing Shares as
-----------
part of the Merger. Funds made available to the Paying Agent shall be invested
by the Paying Agent as directed by Sub or, after the Effective Time, the
Surviving Corporation, provided that such investments shall only be in
--------
obligations of or guaranteed by the United States of America, in commercial
paper obligations rated A-1 or P-1 or better by Moody's Investors Service, Inc.
or Standard & Poor's Corporation, respectively, or in certificates of deposit,
bank repurchase agreements or banker's acceptances of commercial banks with
capital exceeding $1 billion (it being understood that any and all interest or
income earned on funds made available to the Paying Agent pursuant to this
Agreement shall be turned over to Parent).
(b) Exchange Procedure. As soon as reasonably practicable after the
------------------
Effective Time, the Surviving Corporation shall cause the Paying Agent to mail
to each holder of record of a certificate or certificates that immediately prior
to the Effective Time represented Shares (the "Certificates"), (i) a letter of
------------
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and shall be in a form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration as provided in Section 3.1. Upon surrender of a Certificate for
-----------
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Paying Agent, the
-8-
<PAGE>
holder of such Certificate shall be entitled to receive in exchange therefor the
amount of cash into which the Shares theretofore represented by such Certificate
shall have been canceled and become the right to receive pursuant to Section
-------
3.1, and the Certificate so surrendered shall forthwith be canceled. In the
- ---
event of a transfer of ownership of Shares that is not registered in the
transfer records of the Company, payment may be made to a person other than the
person in whose name the Certificate so surrendered is registered, if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 3.2, each Certificate (other than Certificates
-----------
representing Dissenting Shares) shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the amount of
cash, without interest, into which the shares of stock theretofore represented
by such Certificate shall have been converted pursuant to Section 3.1. No
-----------
interest will be paid or will accrue on the cash payable upon the surrender of
any Certificate. Parent or the Paying Agent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any holder of Shares such amounts as Parent or the Paying Agent is required to
deduct and withhold with respect to the making of such payment under the Code
(as hereinafter defined) or under any provision of state, local or foreign tax
law. To the extent that amounts are so withheld by Parent or the Paying Agent,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the Shares in respect of which such deduction
and withholding was made by the Parent or the Paying Agent.
(c) No Further Ownership Rights in Shares. All cash paid upon the
-------------------------------------
surrender of Certificates in accordance with the terms of this Article III shall
-----------
be deemed to have been paid in full satisfaction of all rights pertaining to the
shares of stock theretofore represented by such Certificates. At the Effective
Time, the stock transfer books of the Company shall be closed, and there shall
be no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Common Stock that were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation or the Paying Agent for
any reason, they shall be canceled and exchanged as provided in this Article
-------
III.
- ---
-9-
<PAGE>
(d) Termination of Payment Fund. Any portion of the funds made available
---------------------------
to Paying Agent to pay the Merger Consideration which remains undistributed to
the holders of Shares for six months after the Effective Time shall be delivered
to Parent, upon demand, and any holders of Shares who have not theretofore
complied with this Article III and the instructions set forth in the letter of
-----------
transmittal mailed to such holders after the Effective Time shall thereafter
look only to the Surviving Corporation (subject to abandoned property, escheat
or other similar laws) for payment of the Merger Consideration to which they are
entitled, without interest.
(e) No Liability. None of Parent, Sub, the Company or the Paying Agent
------------
shall be liable to any person in respect of any cash delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to Parent and Sub as follows:
SECTION 4.1 Organization. The Company and each of its Significant
------------
Subsidiaries (as defined in Section 10.3) is a corporation duly organized,
------------
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to carry on
its business as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power and authority
would not reasonably be expected to have a Material Adverse Effect on the
Company (as defined in Section 10.3). The Company and each of its Significant
------------
Subsidiaries is duly qualified or licensed to do business and in good standing
in each jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification or licensing
necessary, except in such jurisdictions where the failure to be so duly
qualified or licensed and in good standing would not reasonably be expected to
have a Material Adverse Effect on the Company or prevent or result in a third
party materially delaying the consummation of the Offer and/or the Merger and
except as set forth in item 4.1 of the letter from the Company to Parent dated
the date hereof, which letter relates to this Agreement and is designated
therein as the Company Letter (the "Company Letter"). The Company has delivered
--------------
to Parent complete and correct copies of its Certificate of Incorporation and
By-laws and has made available to Parent the Certificate of Incorporation and
By-laws (or
-10-
<PAGE>
similar organizational documents) of each of its Significant Subsidiaries.
SECTION 4.2 Subsidiaries. Except as set forth in item 4.2 of the Company
------------
Letter and except for inactive or immaterial Subsidiaries, Exhibit 21 of the
Company's Annual Report on Form 10-K for the year ended December 31, 1996 lists
each Subsidiary of the Company existing as of the date hereof. Except as set
forth in item 4.2 of the Company Letter, all of the outstanding shares of
capital stock of each such Subsidiary are owned by the Company, by another
wholly owned subsidiary of the Company or by the Company and another wholly
owned subsidiary of the Company, free and clear of all pledges, claims, liens,
charges, encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens"), and are duly authorized, validly issued, fully paid and
-----
nonassessable, except where the failure of such shares to be free of Liens would
not reasonably be expected to have a Material Adverse Effect on the Company.
Except as set forth in item 4.2 of the Company Letter and except for the capital
stock of its Subsidiaries, the Company does not own, directly or indirectly, any
capital stock or other ownership interest in any corporation, partnership, joint
venture, limited liability company or other entity which is material to the
business of the Company and its Subsidiaries, taken as a whole.
SECTION 4.3 Capital Structure. The authorized capital stock of the
-----------------
Company consists of 30,000,000 shares of Common Stock and 3,000,000 shares of
Preferred Stock, par value $.01 per share (the "Company Preferred Stock"). At
-----------------------
the close of business on May 22, 1997, (i) 8,490,020 shares of Common Stock were
issued and outstanding, all of which were validly issued, fully paid and
nonassessable and free of preemptive rights, (ii) 240,379 shares of Common Stock
were held by the Company in its treasury and (iii) no shares of Company
Preferred Stock were issued and outstanding. As of the date of this Agreement,
except for (i) the rights to purchase shares of the Series A Junior Preferred
Stock (the "Rights") issued pursuant to the Rights Agreement dated as of August
------
25, 1988, as amended as of February 11, 1994 (as so amended, the "Rights
------
Agreement"), between the Company and the First National Bank of Boston, as
- ---------
successor rights agent, (ii) (A) stock options, stock appreciation rights and
limited stock appreciation rights covering not in excess of 814,300 shares of
Common Stock under the Company's 1995 Stock Incentive Plan, the Company's
Restated 1988 Employee Stock Option and Rights Plan and (B) up to 246,532 shares
of Common Stock subject to subscription under the Company's 1988 Employee Stock
Purchase Plan (collectively, the "Company Stock Options"), (iii) awards under
---------------------
restricted stock agreements and stock unit agreements covering not in excess of
175,541 shares of Common Stock under
-11-
<PAGE>
the Company's 1995 Stock Incentive Plan and the Company's Restated 1988 Employee
Stock Option and Rights Plan and (iv) a program whereby officers may elect to
receive shares of Common Stock and stock units in lieu of cash upon settlement
of certain outstanding phantom stock units scheduled to vest in December 1997,
there are no options, warrants, calls, rights or agreements to which the Company
or any of its Subsidiaries is a party or by which any of them is bound
obligating the Company or any of its Subsidiaries to issue or sell, or cause to
be issued, delivered or sold, additional shares of capital stock of the Company
or any Subsidiary or obligating the Company or any of its Subsidiaries to grant,
extend or enter into any such option, warrant, call, right or agreement.
Except as set forth in the Company Filed SEC Documents (as defined in
Section 4.7) and except as set forth in item 4.3 of the Company Letter, as of
- -----------
the date of this Agreement, there are no outstanding contractual obligations of
the Company or any of its Subsidiaries (i) to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or any Subsidiary or (ii) to
vote or to dispose of any shares of the capital stock of any of the Company's
Subsidiaries.
SECTION 4.4 Authority. The Company has all requisite corporate power and
---------
authority to execute and deliver this Agreement and, subject to approval by the
stockholders of the Company of the Merger (if required), to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to approval by the
stockholders of the Company of this Agreement and the Merger (if required).
This Agreement has been duly executed and delivered by the Company and (assuming
the valid authorization, execution and delivery of this Agreement by Parent and
Sub) constitutes the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except that such
enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to the enforcement of creditors' rights
generally and (ii) is subject to general principles of equity.
SECTION 4.5 Consent and Approvals; No Violations. Except as set forth in
------------------------------------
item 4.5 of the Company Letter and subject to Section 4.16, the execution and
------------
delivery by the Company of this Agreement do not, and the consummation by the
Company of the transactions contemplated hereby and compliance by the Company
with the provisions hereof will not, result in any violation of, or default
(with or without notice or lapse of time, or both)
-12-
<PAGE>
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or the loss of a benefit under, or result in the creation of any
Lien upon any of the properties or assets of the Company or any of its
Subsidiaries under, (i) any provision of the Certificate of Incorporation, By-
laws or comparable organization documents of the Company or any of the
Significant Subsidiaries of the Company, (ii) any loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement (other than, with
respect to termination, agreements terminable at will or upon 90 days' or less
notice by the terminating party), instrument, permit, concession, franchise or
license applicable to the Company or any of its Significant Subsidiaries or
(iii) assuming all the consents, filings and registrations referred to in the
next sentence are made and obtained, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or any of its
Significant Subsidiaries or any of their respective properties or assets, other
than, in the case of clause (ii) or (iii), any such violations, defaults,
rights, losses or Liens, that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or result in a third party materially delaying the consummation of the
Offer and/or the Merger. No filing or registration with, or authorization,
consent or approval of, any domestic (federal and state) or foreign court,
commission, governmental body, regulatory agency, authority or tribunal (a
"Governmental Entity") is required by or with respect to the Company or any of
- --------------------
its Subsidiaries in connection with the execution and delivery of this Agreement
by the Company or is necessary for the consummation of the Offer, the Merger
and the other transactions contemplated by this Agreement, except (i) in
connection, or in compliance, with the provisions of the Hart-Scott-Rodino Anti
trust Improvements Act of 1976, as amended (the "HSR Act"), and the Securities
-------
Exchange Act of 1934, as amended (together with the rules and regulations
promulgated thereunder, the "Exchange Act"), (ii) the filing of the Certificate
------------
of Merger with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which the Company or
any of its Subsidiaries is qualified to do business, (iii) such filings and
consents as may be required under any environmental, health or safety law or
regulation pertaining to any notification, disclosure or required approval
triggered by the Offer, the Merger or the other transactions contemplated by
this Agreement, (iv) such filings, authorizations, orders and approvals as may
be required by state takeover laws (the "State Takeover Approvals") or state
------------------------
securities or "blue sky" laws, (v) such filings as may be required in connection
with the taxes described in Section 7.6, (vi) in connection, or in compliance,
-----------
with the provisions of the Competition Act (Canada) (the "Competition Act"),
---------------
(vii) such
-13-
<PAGE>
other consents, approvals, orders, authorizations, registrations, declarations
and filings as may be required under the laws of any foreign country in which
the Company or any of its Subsidiaries conducts any business or owns any
property or assets and (viii) such other consents, orders, authorizations,
registrations, declarations and filings the failure of which to be obtained or
made would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on the Company or prevent or result in a third party
materially delaying the consummation of the Offer and/or the Merger.
SECTION 4.6 SEC Documents and Other Reports. The Company has filed all
-------------------------------
required documents with the SEC since January 1, 1995 (the "Company SEC
-----------
Documents"). Except as set forth in item 4.6 of the Company Letter, as of their
- ---------
respective filing dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the "Securities
----------
Act"), or the Exchange Act, as the case may be, each as in effect on the date so
- ---
filed, and at the time filed with SEC none of the Company SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Except as set forth in item 4.6 of the Company Letter, the financial statements
of the Company included in the Company SEC Documents comply as of their
respective dates as to form in all material respects with the then applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles (except, in the case of the unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto)
and fairly present the consolidated financial position of the Company and its
consolidated Subsidiaries as at the dates thereof and the consolidated results
of their operations and their consolidated cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments and to any other adjustments described therein).
SECTION 4.7 Absence of Material Adverse Change. Except as disclosed in
----------------------------------
items 4.7 or 4.12(a) of the Company Letter or in the Company SEC Documents filed
and publicly available prior to the date of this Agreement (the "Company Filed
-------------
SEC Documents"), since December 31, 1996, the Company and its Subsidiaries have
- -------------
conducted their respective businesses in all material respects only in the
ordinary course consistent with past practice, and there has not been (i) any
Material Adverse
-14-
<PAGE>
Change (as defined in Section 10.3) with respect to the Company (other than
------------
changes in general economic conditions or in economic conditions affecting the
industry in which the Company operates), (ii) any declaration, setting aside or
payment of any dividend or other distribution with respect to its capital stock
or any redemption, purchase or other acquisition of any of its capital stock,
(iii) any split, combination or reclassification of any of its capital stock or
any issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock, (iv)
(x) any granting by the Company or any of its Subsidiaries to any officer of the
Company or any of its Subsidiaries of any increase in compensation, except in
the ordinary course of business (including in connection with promotions)
consistent with past practice or as was required under employment agreements in
effect as of December 31, 1996, (y) any material change to the Company's or any
of its Subsidiaries' severance or termination plans, agreements or arrangements
with any of their employees, except as part of a standard employment package to
any person promoted or hired (but not including the five most senior officers),
or as was required under employment, severance or termination agreements in
effect as of December 31, 1996, or (z) except for employment agreements in the
ordinary course of business consistent with past practice with employees other
than any executive officer of the Company, any entry by the Company or any of
its Subsidiaries into any employment, consulting, severance, termination or
indemnification agreement with any such employee or executive officer, (v) any
damage, destruction or loss, whether or not covered by insurance, that would
reasonably be expected to have a Material Adverse Effect on the Company, (vi)
any revaluation by the Company of any of its material assets or (vii) any
material change in accounting methods, principles or practices by the Company.
SECTION 4.8 Information Supplied. None of the information supplied or to
--------------------
be supplied by the Company specifically for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
information to be filed by the Company in connection with the Offer pursuant to
Rule 14f-1 promulgated under the Exchange Act (the "Information Statement") or
---------------------
(iv) the proxy statement (together with any amendments or supplements thereto,
the "Proxy Statement") relating to the Stockholders Meeting (as defined in
---------------
Section 7.1), will, in the case of the Offer Documents, the Schedule 14D-9 and
- -----------
the Information Statement, at the respective times the Offer Documents, the
Schedule 14D-9 and the Information Statement are filed with the SEC or first
published, sent or given to the Company's stockholders, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
-15-
<PAGE>
therein, in light of the circumstances under which they are made, not misleading
or, in the case of the Proxy Statement, at the time the Proxy Statement is first
mailed to the Company's stockholders or at the time of the Stockholders Meeting,
be false or misleading with respect to any material fact, or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they are
made, not misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Stockholders
Meeting which has become false or misleading, except that no representation or
warranty is made by the Company in connection with any of the foregoing with
respect to statements made or incorporated by reference therein based on
information supplied by Parent or Sub or any of their respective representatives
specifically for inclusion or incorporation by reference therein. The Schedule
14D-9, the Information Statement and the Proxy Statement will comply as to form
in all material respects with the requirements of the Exchange Act, except that
no representation or warranty is made by the Company in connection with any of
the foregoing with respect to statements made or incorporated by reference
therein based on information supplied by Parent or Sub or any of their
respective representatives specifically for inclusion or incorporation by
reference therein.
SECTION 4.9 Compliance with Laws. Except as disclosed in item 4.9 of the
--------------------
Company Letter or in the Company Filed SEC Documents, the businesses of the
Company and its Subsidiaries are not being conducted in violation of any law,
ordinance or regulation of any Governmental Entity, except for possible
violations that would not reasonably be expected to have a Material Adverse
Effect on the Company or prevent or result in a third party materially delaying
the consummation of the Offer and/or the Merger.
SECTION 4.10 Tax Matters. Except as set forth in item 4.10 of the
-----------
Company Letter:
(a) The Company and each of its Subsidiaries has filed all federal and
state income tax returns and all other material tax returns and reports required
to be filed by it. All such returns are complete and correct in all material
respects. The Company and each of its Subsidiaries has paid (or the Company has
paid on its Subsidiaries' behalf) all taxes shown as due on such returns and all
material taxes (as defined below) for which no return was required to be filed,
and the most recent financial statements contained in the Company Filed SEC
Documents reflect an adequate reserve for all material amounts of taxes payable
by the Company and its Subsidiaries for all taxable periods and portions thereof
through the date of such financial statements.
-16-
<PAGE>
(b) No action, suit, investigation, audit, claim or assessment is pending
or proposed or threatened in writing with respect to a material amount of taxes
of the Company or any of its Subsidiaries.
(c) There is no agreement or other document extending, or having the
effect of extending, the period of assessment or collection of any material
amount of taxes and no power of attorney with respect to any taxes has been
executed or filed with any taxing authority.
(d) No material liens for taxes exist with respect to any assets or
properties of the Company or any of its Subsidiaries, except for statutory liens
for taxes not yet due.
(e) None of the Company or any of its Subsidiaries is a party to or is
bound by any tax sharing agreement, tax indemnity obligation or similar
agreement, arrangement or practice with respect to a material amount of taxes
(including any advance pricing agreement, closing agreement or other agreement
relating to taxes with any taxing authority), and none of the Company or any
Subsidiary has been a member of any group of corporations filing federal tax
returns on a consolidated basis other than each such group of which it is
currently a member.
(f) None of the Company or any of its Subsidiaries shall be required to
include in a taxable period ending after the Effective Time a material amount of
taxable income attributable to income that accrued in a prior taxable period but
was not recognized in any prior taxable period as a result of the installment
method of accounting.
(g) All material amounts of taxes which the Company or any Subsidiary is
required by law to withhold or to collect for payment have been duly withheld
and collected, and have been paid or accrued.
(h) As used in this Agreement, (i) "tax" and "taxes" shall include any
--- -----
federal, state, local or foreign net income, gross income, gross receipts,
windfall profit, severance, property, production, sales, use, license, excise,
franchise, employment, payroll, withholding, alternative or add-on minimum or
any other tax, custom, duty, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest or penalty, addition to tax
or additional amount imposed by any governmental entity and (ii) "tax return"
----------
shall include any return, report or similar statement required to be filed with
respect to any tax including, without limitation, any information
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return, claim for refund, amended return or declaration of estimated tax.
SECTION 4.11 Liabilities. Except (a) for liabilities incurred in the
-----------
ordinary course of business consistent with past practice, (b) for transaction
expenses incurred in connection with this Agreement, (c) for liabilities which
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect on the Company, (d) for liabilities set forth on any
balance sheet (including the notes thereto) included in the Company's financial
statements included in the Company Filed SEC Documents filed with the SEC since
December 31, 1996, or (e) as set forth in item 4.11 of the Company Letter, from
December 31, 1996 until the date hereof, neither the Company nor any of its
Subsidiaries has incurred any liabilities that would be required to be reflected
or reserved against in a consolidated balance sheet of the Company and its
Subsidiaries prepared in accordance with generally accepted accounting
principles as applied in preparing the consolidated balance sheet of the Company
and its Subsidiaries as of December 31, 1996 contained in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1996.
SECTION 4.12 Benefit Plans; Employees and Employment Practices. (a)
-------------------------------------------------
Except as disclosed in the Company Filed SEC Documents and item 4.12(a) of the
Company Letter, since the date of the most recent audited financial statements
included in the Company Filed SEC Documents, there has not been any adoption or
amendment in any material respect (including any increase or improvements in
benefits or coverage) by the Company or any of its Subsidiaries of any
collective bargaining agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical, fringe benefit, excess, supplemental
executive compensation, employee stock purchase, stock appreciation, restricted
stock or other material employee benefit plan, policy, arrangement or
understanding (whether or not in writing) providing benefits to any current or
former employee, officer or director of the Company or any of its Subsidiaries
(collectively, the "Benefit Plans"). To the Company's knowledge, except as
-------------
disclosed in item 4.12(a) of the Company Letter or in the Company Filed SEC
Documents, there exist no material employment, consulting, severance,
termination or indemnification agreements between the Company or any of its
Subsidiaries and any current or former employee, officer or director of the
Company or any of its Subsidiaries.
(b) Item 4.12(b) of the Company Letter contains a list of all "employee
pension benefit plans" (as defined in
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Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") (sometimes referred to herein as "Pension Plans") and "employee
----- -------------
welfare benefit plans" (as defined in Section 3(1) of ERISA) maintained,
sponsored or contributed to, by the Company or any of its U.S. or foreign
Subsidiaries for the benefit of any current or former employees, officers or
directors of the Company or any of such Subsidiaries (collectively, the "ERISA
-----
Benefit Plans"). The Company has made available to Parent true, complete and
- -------------
correct copies of (i) each ERISA Benefit Plan (or, in the case of any unwritten
ERISA Benefit Plans, descriptions thereof), (ii) the most recent annual report
on Form 5500 (and related schedules and financial statements or opinions
required in connection therewith) filed with the Internal Revenue Service with
respect to each ERISA Benefit Plan (if any such report was required), (iii) the
most recent actuarial report with respect to each ERISA Benefit Plan, as
applicable, (iv) the most recent summary plan description (and a summary of
material modifications, if applicable) for each ERISA Benefit Plan and (v) each
trust agreement and group annuity contract relating to any ERISA Benefit Plan.
(c) Except as disclosed in item 4.12(c) of the Company Letter, all Pension
Plans which are intended to be tax-qualified have received determination letters
in respect of such Pension Plans from the Internal Revenue Service to the effect
that such Pension Plans are qualified and exempt from Federal income taxes under
Section 401(a) and 501(a), respectively, of the Code, and, to the best knowledge
of the Company, there is no reason why any such Pension Plan is not currently so
qualified, where such revocation or failure to so qualify would be reasonably
expected to have a Material Adverse Effect.
(d) Except as disclosed in item 4.12(d) of the Company Letter, each
Benefit Plan has been administered in all material respects in conformity with
its terms and the applicable requirements of ERISA and the Code and other
applicable laws and all contributions required to be made have been made in
accordance with the provisions of each such Benefit Plan and with ERISA and the
Code and other applicable laws, where the failure to comply or to make the
required contributions would be reasonably expected to have a Material Adverse
Effect on the Company.
(e) None of the Company or any of its Subsidiaries, or any other person or
entity that, together with the Company, is treated as a single employer under
Section 414 of the Code (an "ERISA Affiliate"), currently maintains or has
---------------
maintained during the five-year period preceding the date hereof any
"multiemployer plan" (within the meaning of Section 3(37) of ERISA), or has
incurred any liability under Title IV of ERISA or to the Pension
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Benefit Guaranty Corporation (other than contributions and premiums in the
ordinary course) that has not been fully paid as of the date hereof, which would
be reasonably expected to have a Material Adverse Effect on the Company. To the
Company's knowledge, none of the Company, any of its Subsidiaries, any officer
of the Company or any of its Subsidiaries or any of the Benefit Plans which are
subject to ERISA, including the Pension Plans, any trusts created thereunder or,
to the knowledge of the Company, any trustee or administrator thereof, has
engaged in a "prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) or any other breach of fiduciary
responsibility that could reasonably be expected to subject the Company, any of
its Subsidiaries or any officer of the Company or any of its Subsidiaries to any
material tax or penalty on prohibited transactions imposed by such Section 4975
or to any material liability under Section 502(i) or (l) of ERISA, where the
liability that would be reasonably expected to occur would have a Material
Adverse Effect on the Company. With respect to each Pension Plan subject to
Title IV of ERISA (other than a multiemployer plan within the meaning of Section
3(37) of ERISA) (i) no proceeding has been initiated to terminate such plan,
(ii) there has been no "reportable event" (as such term is defined in Section
4043(b) of ERISA), (iii) no "accumulated funding deficiency" (within the meaning
of Section 412 of the Code), whether or not waived, has occurred, (iv) no person
has failed to make a required installment or any other payment required under
Section 412 of the Code before the applicable due date and (v) neither the
Company nor any ERISA Affiliate has provided or is required to provide security
to such plan under Section 401(a)(29) of the Code due to a plan amendment that
results in an increase in current liability, where the liability, individually
or in the aggregate, that would be reasonably expected to result would have a
Material Adverse Effect on the Company.
(f) There is no dispute, arbitration, claim, suit or grievance, pending or
threatened, involving a Benefit Plan (other than routine claims for benefits
payable under any such plan), and to the knowledge of the Company, there is no
basis for any such claim, which would reasonably be expected to have a Material
Adverse Effect on the Company.
(g) Except as disclosed in item 4.12(g) of the Company Letter, there are
no controversies, strikes, work stoppages or disputes pending or threatened
between the Company or any of its Subsidiaries and any current or former
employees, and, to the Company's knowledge, no organizational effort by any
labor union or other collective bargaining unit currently is under way or
threatened with respect to any employee, which would reasonably be expected to
have a Material Adverse Effect on the Company. A
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true, complete and correct copy of any applicable collective bargaining
agreement has been made available to Parent, and the Company and its
Subsidiaries are in compliance in all material respects with the terms thereof.
SECTION 4.13 Litigation. Except as disclosed in item 4.13 of the Company
----------
Letter or in the Company Filed SEC Documents, there is no suit, claim, action,
proceeding or investigation pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries that would reasonably
be expected to have a Material Adverse Effect on the Company or prevent or
result in a third party materially delaying the consummation of the Offer and/or
the Merger. Except as disclosed in item 4.13 of the Company Letter or in the
Company Filed SEC Documents, neither the Company nor any of its Subsidiaries is
subject to any outstanding judgment, order, writ, injunction or decree that
would reasonably be expected to have a Material Adverse Effect on the Company or
prevent or result in a third party materially delaying the consummation of the
Offer and/or the Merger.
SECTION 4.14 Environmental Matters. Except as set forth in the Company
---------------------
Filed SEC Documents or in item 4.14 of the Company Letter, neither the Company
nor any of its Subsidiaries has (i) placed, held, located, released, transported
or disposed of any Hazardous Substances (as defined below) on, under, from or at
any of the Company's or any of its Subsidiaries' properties or any other
properties, other than in a manner that would not, in all such cases taken
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect on the Company, (ii) any knowledge of the presence of any
Hazardous Substances that have been released into the environment on, under or
at any of the Company's or any of its Subsidiaries' properties other than that
which would not reasonably be expected to result in a Material Adverse Effect on
the Company, or (iii) received any written notice (A) of any violation of any
applicable statute, law, ordinance, regulation, rule, judgment, decree or order
of any Governmental Entity relating to any matter of pollution, protection of
the environment or environmental regulation or control or regarding Hazardous
Substances (collectively, "Environmental Laws") that has not been resolved or
------------------
settled with the relevant Governmental Entity, (B) of the institution or
pendency of any suit, action, claim, proceeding or investigation by any
Governmental Entity or any third party in connection with any such violation,
(C) requiring the response to or remediation of Hazardous Substances at or
arising from any of the Company's or any of its Subsidiaries' properties or any
other properties, (D) alleging noncompliance by the Company or any of its
Subsidiaries with the terms of any permit required under any Environmental Law
in any manner reasonably likely to require
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<PAGE>
material expenditures or to result in material liability or (E) demanding
payment for response to or remediation of Hazardous Substances at or arising
from any of the Company's or any of its Subsidiaries' properties or any other
properties, except in each case for the notices set forth in item 4.14 of the
Company Letter and except in each case for notices that would not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect on the Company. For purposes of this Agreement, the term "Hazardous
---------
Substance" shall mean any material defined as toxic or hazardous, including any
- ---------
petroleum and petroleum products, under any applicable Environmental Law.
SECTION 4.15 Certain Agreements. Except as set forth in items 4.7,
------------------
4.12(a) or 4.15 of the Company Letter or the Company Filed SEC Documents,
neither the Company nor any of its Subsidiaries is a party to any Benefit Plan,
any of the benefits of which will be increased, or the vesting of the benefits
of which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of which will
be calculated on the basis of any of the transactions contemplated by this
Agreement, where the liability that would reasonably be expected to result would
have a Material Adverse Effect.
SECTION 4.16 Asbestos Litigation Matters. (a) Except as disclosed in
---------------------------
item 4.16 of the Company Letter, to its knowledge, neither the Company nor its
insurance carriers is a party to agreements or commitments for the resolution of
asbestos personal injury claims or lawsuits, or for the payment of settlement
monies, fees, disbursements or costs in connection therewith, which would be
binding upon the Company in the event of Global Court Disapproval (as defined in
the Global Settlement Agreement dated December 23, 1993, among the Company,
Continental Casualty Company ("Continental"), CNA Casualty Company of California
-----------
("CNA"), Columbia Casualty Company ("Columbia"), Pacific Indemnity Company
--- --------
("Pacific") and the Settlement Class (the "Global Settlement Agreement")), and
------- ---------------------------
which would result in a reduction or commitment of amounts otherwise to be made
available after the Trigger Date pursuant to Section 2.3 of the Trilateral
Settlement Agreement, which would exceed $15 million in the aggregate as finally
determined.
(b) Except as disclosed in item 4.16 of the Company Letter, to the
Company's knowledge, there is no judgment which provides that it modifies the
terms of Global Approval Judgment (as defined in the Global Settlement Agreement
and as modified by the March, 1994 Agreement concerning Plant Insulation
Company), and as affirmed by the United States Court of Appeals for the Fifth
Circuit in In re Asbestos Litigation, 90 F.3d 963 (1996), and there is no
-------------------------
litigation challenging the validity of Global
-22-
<PAGE>
Approval Judgment. In the event of Global Approval Judgment, under the terms of
that judgment the Company shall have no further liability for Personal Injury
Asbestos Claims by persons who are members of the Global Settlement Class or of
the Global Third Party Claimant Class, save and except any liability resulting
from a collateral attack on Global Approval Judgment, or from an inability to
enforce Global Approval Judgment according to its terms, or as described in item
4.16 of the Company Letter. Continental Casualty Company is a party to an
agreement with the Company which provides that if Global Approval Judgment is
entered, then on and after the date of such approval, Continental shall pay
indemnity and defense costs with respect to Unsettled Present Claims that are
not Global Class Claims, and shall pay settlement amounts on Presently Settled
Claims when the same become due and payable that are not Global Class Claims.
"Unsettled Present Claims" shall include claims of individuals for asbestos-
related personal injuries brought against the Company in lawsuits filed prior to
the time after which claims are in fact included within the Global Settlement
(and which are not Presently Settled Claims). "Presently Settled Claims" shall
include claims of individuals for asbestos-related personal injuries that do not
fall within the class of claims covered by the Global Settlement and that as of
August 23, 1993 had been settled.
(c) The consummation of the merger set forth in this Agreement in
accordance with its terms is not a breach of, and will not result in a material
forfeiture of rights under, the terms of (i) the Global Settlement Agreement or
any of the exhibits to the Global Settlement Agreement, including, without
limitation, the Glossary of Terms (Exhibit A), the Fibreboard Asbestos
Compensation Trust Agreement (Exhibit B), the Trust Distribution Process (Annex
A to the aforesaid Trust Agreement), the Defendant Class Settlement Agreement
(Exhibit C), the Escrow Agreement (Exhibit D) and the Assignment (Exhibit E);
(ii) the Trilateral Settlement Agreement dated October 12, 1993 among the
Company, Continental, CNA, Columbia and Pacific (the "Trilateral Settlement
---------------------
Agreement")(including, without limitation, the entitlement of the Company to
- ---------
payments under Section 2.3 thereof); (iii) the April 9, 1993 agreement between
the Company and Continental; and (iv) the Settlement Agreement, dated as of
August 5, 1993, as heretofore amended, among the Company, Continental and Ness
Motley Loadholt Richardson & Poole and certain of its affiliate law firms.
(d) To the Company's knowledge, and subject to the assumptions and
calculations set forth in Section 4.16 of the Company Letter, in the event of
Global Court Disapproval, if the Trigger Date (as defined in the Trilateral
Settlement Agreement) were June 30, 1997, the projected amount to be made
available
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<PAGE>
(after adjustments for all allowable deductions and subtractions) pursuant to
Section 2.3 of the Trilateral Settlement Agreement, should be no less than $1.65
billion.
(e) Except as set forth in item 4.16 of the Company Letter, of the $10.0
million payment obligation of the Company as described in Section 2.3(D)(2) of
the Global Settlement Agreement, approximately $9.89 million of such obligation
has been fully funded by The Home Insurance Company, and the Company's future
obligation thereunder is limited to the payment of approximately $110,000 plus
interest at 3.085% from January 1, 1994 through the date of Global Approval
Judgment, together with interest on the sum of $10.0 million at the rate of
3.085% from August 27, 1993 to December 31, 1993.
SECTION 4.17 State Takeover Statutes; Charter Provisions; Rights
---------------------------------------------------
Agreement. The action of the Board of Directors of the Company in approving the
- ---------
Offer (including the purchase of Shares pursuant to the Offer), the Merger, this
Agreement and the transactions contemplated by this Agreement is sufficient to
render inapplicable to the Offer, the Merger and this Agreement the provisions
of Section 203 of the DGCL and Article NINTH of the Company's Certificate of
Incorporation. The Company has made available to Parent a complete and correct
copy of the Rights Agreement, including all amendments (including the amendment
referred to in the immediately following sentence) and exhibits thereto. The
Board of Directors of the Company has taken all action necessary to amend the
Rights Agreement (subject only to the execution of such amendment by the Rights
Agent, which execution the Company shall cause to take place within 48 hours of
the date hereof) to provide that, so long as this Agreement has not been
terminated pursuant to Section 9.1, a Distribution Date (as such term is defined
-----------
in the Rights Agreement) shall not occur or be deemed to occur, the Rights shall
not separate (to the extent the Rights Agreement otherwise provides for such
separation) or become exercisable, and neither Parent nor Sub shall become an
Acquiring Person (as defined in the Rights Agreement) as a result of the
execution, delivery or performance of this Agreement, the announcement, making
or consummation of the Offer, the acquisition of shares of Common Stock pursuant
to the Offer or the Merger, the consummation of the Merger or any other
transactions contemplated by this Agreement. So long as this Agreement has not
been terminated pursuant to Section 9.1, no other action is required to prevent
-----------
the holders of Rights from having any rights under the Rights Agreement as a
result of the Offer, the Merger or any other transaction contemplated by this
Agreement.
SECTION 4.18 Brokers. No broker, investment banker, financial advisor or
-------
other person, other than Dillon Read, the
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fees and expenses of which will be paid by the Company (and are reflected in an
agreement between Dillon Read and the Company, a complete copy of which has been
furnished to Parent), is entitled to any broker's, finder's, financial advisor's
or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
OF PARENT AND SUB
-----------------
Parent and Sub represent and warrant to the Company as follows:
SECTION 5.1 Organization. Each of Parent and Sub is a corporation duly
------------
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to carry on its business as now being conducted, except where the
failure to be so organized, validly existing or in good standing would not have
a Material Adverse Effect on Parent or Sub or prevent or result in a third party
materially delaying the consummation of the Offer or the Merger.
SECTION 5.2 Authority. Parent and Sub have all requisite corporate power
---------
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Parent and Sub and the consummation by Parent and Sub of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Parent and Sub. This Agreement has been duly
executed and delivered by Parent and Sub and (assuming the valid authorization,
execution and delivery of this Agreement by the Company) constitutes a valid and
binding obligation of each of Parent and Sub enforceable against them in
accordance with its terms, except that such enforceability (i) may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to the enforcement of creditors' rights generally and (ii) is subject to general
principles of equity.
SECTION 5.3 Consents and Approvals; No Violations. Except as set forth in
-------------------------------------
item 5.3 of the letter from Parent to the Company dated the date hereof, which
letter relates to this Agreement and is designated therein as the Parent Letter
(the "Parent Letter"), the execution and delivery by Parent and Sub of this
-------------
Agreement do not, and the consummation by Parent and Sub of
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<PAGE>
the transactions contemplated hereby and compliance with the provisions hereof
will not, result in any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or the loss of a benefit under,
or result in the creation of any Lien upon any of the properties or assets of
Parent or any of its Subsidiaries under, (i) any provision of the Certificate of
Incorporation, By-laws or comparable organization documents of Parent, Sub or
any Significant Subsidiaries of Parent, (ii) any loan or credit agreement, note,
bond, mortgage, indenture, lease or other agreement (other than, with respect to
termination, agreements terminable at will or upon 90 days' or less notice by
the terminating party), instrument, permit, concession, franchise or license
applicable to Parent or any of its Significant Subsidiaries or (iii) assuming
all the consents, filings and registrations referred to in the next sentence are
made and obtained, any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent or any of its Significant Subsidiaries or any of
their respective properties or assets, other than, in the case of clause (ii) or
(iii), any such violations, defaults, rights, losses or Liens, that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Parent or Sub or prevent or result in a third party
materially delaying the consummation of the Offer and/or the Merger. No filing
or registration with, or authorization, consent or approval of, any Governmental
Entity is required by or with respect to Parent or any of its Subsidiaries in
connection with the execution and delivery of this Agreement by Parent or Sub or
is necessary for the consummation of the Offer, the Merger and the other
transactions contemplated by this Agreement, except (i) in connection, or in
compliance, with the provisions of the HSR Act and the Exchange Act, (ii) the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware and appropriate documents with the relevant authorities of other states
in which Parent or any of its Subsidiaries is qualified to do business, (iii)
such filings and consents as may be required under any environmental, health or
safety law or regulation pertaining to any notification, disclosure or required
approval triggered by the Offer, the Merger or the other transactions
contemplated by this Agreement, (iv) such filings, authorizations, orders and
approvals as may be required to obtain the State Takeover Approvals or state
securities or "blue sky" laws, (v) such filings as may be required in connection
with the taxes described in Section 7.6, (vi) in connection, or in compliance,
-----------
with the provisions of the Competition Act, (vii) such other consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under the laws of any foreign country in which Parent or any of
its Subsidiaries conducts any business or owns any
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<PAGE>
property or assets and (viii) such other consents, orders, authorizations,
registrations, declarations and filings the failure of which to be obtained or
made would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect on Parent or prevent or result in a third party
materially delaying the consummation of the Offer and/or the Merger.
SECTION 5.4 Information Supplied. None of the information supplied or to
--------------------
be supplied by Parent or Sub specifically for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
Information Statement or (iv) the Proxy Statement will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information Statement, at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to the Company's
stockholders, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading or, in the case of the Proxy Statement, at the time the Proxy
Statement is first mailed to the Company's stockholders or at the time of the
Stockholders Meeting, be false or misleading with respect to any material fact,
or omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they are made, not misleading or necessary to correct any statement
in any earlier communication with respect to the solicitation of proxies for the
Stockholders Meeting which has become false or misleading, except that no
representation or warranty is made by Parent or Sub in connection with any of
the foregoing with respect to statements made or incorporated by reference
therein based on information supplied by the Company or any of its
representatives specifically for inclusion or incorporation by reference
therein. The Offer Documents will comply as to form in all material respects
with the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made by Parent or Sub
in connection with any of the foregoing with respect to statements made or
incorporated by reference therein based on information supplied by the Company
or any of its representatives specifically for inclusion or incorporation by
reference therein.
SECTION 5.5 Interim Operations of Sub. Sub was formed solely for the
-------------------------
purpose of engaging in the transactions contemplated hereby, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby.
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<PAGE>
SECTION 5.6 Brokers. No broker, investment banker, financial advisor or
-------
other person, other than Merrill Lynch, Pierce, Fenner & Smith Incorporated, the
fees and expenses of which will be paid by Parent, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Parent or Sub.
SECTION 5.7 Financing. Parent has funds or commitments to provide funds
---------
in an amount adequate to purchase the Shares pursuant to the Offer and to pay
the Merger Consideration. Parent will have, and shall provide Sub with, the
funds necessary to consummate the Offer and the Merger and the transactions
contemplated hereby in accordance with the terms hereof.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
-----------------------------------------
SECTION 6.1 Conduct of Business by the Company Pending the Merger.
-----------------------------------------------------
During the period from the date of this Agreement until such time as Parent's
designees shall constitute a majority of the Board of Directors of the Company,
the Company shall, and shall cause each of its Subsidiaries to, in all material
respects, except as contemplated by this Agreement, carry on its business in the
ordinary course of its business as currently conducted and, to the extent
consistent therewith, use reasonable efforts to preserve intact its current
business organizations, keep available the services of its current officers and
key employees and preserve its present relationships with customers, suppliers
and others having significant business dealings with it, subject in all respects
to Section 10.11. Without limiting the generality of the foregoing, and except
-------------
as otherwise expressly contemplated by this Agreement, during such period,
except as contemplated by this Agreement and Section 10.11, the Company shall
-------------
not, and shall not permit any of its Subsidiaries to, without the prior written
consent of Parent (which consent shall not be unreasonably withheld or delayed):
(a) (x) declare, set aside or pay any dividends on, or make any other
actual, constructive or deemed distributions in respect of, any of its
capital stock, or otherwise make any payments to its stockholders in their
capacity as such (other than the payment by a Subsidiary of a dividend or
distribution to the Company or another wholly owned Subsidiary), (y) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any
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<PAGE>
other securities in respect of, in lieu of or in substitution for shares
of its capital stock or (z) purchase, redeem or otherwise acquire any
shares of its capital stock or those of any Subsidiary or any other
securities thereof or any rights, warrants or options to acquire any such
shares or other securities;
(b) except as set forth in item 4.12(a) of the Company Letter and
except as required under existing employee benefit plans, agreements,
policies, awards or arrangements in effect on the date of this Agreement
(including, without limitation, the Company Stock Options), issue, deliver,
sell, pledge, dispose of or otherwise encumber any shares of its capital
stock, any other voting securities or equity equivalent or any securities
convertible into, or any rights, warrants or options to acquire any such
shares, voting securities, equity equivalent or convertible securities
(other than pursuant to the Rights Agreement and other than issuances by a
wholly owned Subsidiary of the Company of its capital stock to the
Company);
(c) amend its Certificate of Incorporation or By-laws or other
similar organizational documents;
(d) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of or equity in, or by
any other manner, any business or any corporation, partnership, limited
liability company, association or other business organization or division
thereof or otherwise acquire or agree to acquire any assets, other than
transactions that are (i) in the ordinary course of business consistent
with past practice, (ii) which involve assets having a purchase price not
in excess of $1,000,000 individually or $5,000,000 in the aggregate or
(iii) acquisitions or purchases of assets to the extent permitted by
Section 6.1(n);
--------------
(e) other than settling disputes with the Company's insurance
carriers in connection with insurance for asbestos-related property damage
and other claims (excluding Personal Injury Asbestos Claims), sell, lease,
license, encumber or otherwise dispose of, or agree to sell, lease,
encumber or otherwise dispose of, any of its assets, other than
transactions that are in the ordinary course of business consistent with
past practice or which involve assets which in the aggregate are not in
excess of $2,000,000;
(f) incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt
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<PAGE>
securities or warrants or rights to acquire any debt securities of the
Company or any of its Subsidiaries, guarantee any debt securities of
others, enter into any "keep-well" or other agreement to maintain any
financial statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing, except for
borrowings incurred in the ordinary course of business consistent with past
practice not to exceed $2,000,000 in the aggregate or non-acquisition-
related borrowings under existing credit facilities not to exceed
$10,000,000 in the aggregate, or make any loans, advances or capital
contributions to, or other investments in, any other person, other than to
or in the Company or any wholly owned Subsidiary of the Company;
(g) except as set forth in item 4.2 of the Company Letter, alter
(through merger, liquidation, reorganization, restructuring or in any other
fashion) the corporate structure or ownership of the Company or any
Subsidiary;
(h) except as disclosed in item 4.12(a) of the Company Letter,
increase the compensation payable or to become payable to its directors,
officers or employees, except for increases required under employment
agreements existing on the date hereof, and increases for officers and
employees in the ordinary course of business consistent with past practice,
or grant any severance or termination pay to, or enter into any employment
or severance agreement, or establish, adopt, enter into, or amend or take
action to enhance or accelerate any rights or benefits under, any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, deferred compensation,
employment, termination, severance or other plan, agreement, trust, fund,
policy or arrangement for the benefit of any director, officer or employee,
except, in each case, as may be required by the terms of any such plan,
agreement, trust, fund, policy or arrangement or to comply with applicable
law or regulation;
(i) knowingly violate or fail to perform any material obligation or
duty imposed upon it by any applicable material federal, state or local
law, rule, regulation, guideline or ordinance;
(j) except as set forth in Section 6.1(q) or 6.1(r), settle or
-------------- ------
compromise any suit, proceeding or claim or threatened suit, proceeding or
claim for an amount that is more than $100,000 in the case of any
individual suit, proceeding or claim or $250,000 for all suits, proceedings
or claims;
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<PAGE>
(k) except to the extent required by law or agreed to by Parent, (i)
compromise any material tax liability or (ii) prepare or file any material
tax return inconsistent with past practice or, on any such tax return or
otherwise, take any position, make any material election, or adopt any
material accounting method that is inconsistent with positions taken,
elections made or methods used in preparing or filing similar tax returns;
(l) redeem the Rights or, other than as contemplated by Section 4.17,
------------
amend the Rights Agreement;
(m) except as may be required as a result of a change in law or in
generally accepted accounting principles, make any material change in its
method of accounting;
(n) make or agree to make any new capital expenditure not previously
finally committed to that, individually, exceeds $2,500,000; provided,
---------
however, that as to any individual capital expenditure in an amount equal
-------
to or greater than $1,000,000 but less than or equal to $2,500,000, the
Company will consult with Parent (it being understood that no consent is
required hereunder);
(o) except to the extent permitted by Section 6.1(j), 6.1(q) or
-------------- ------
6.1(r), pay, discharge, settle or satisfy any claims, liabilities or
------
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge, settlement or satisfaction,
(1) in the ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities recognized or disclosed in the
most recent consolidated financial statements (or the notes thereto) of the
Company included in the Company Filed SEC Documents or incurred since the
date of such financial statements in the ordinary course of business
consistent with past practice or (2) of liabilities required to be paid,
discharged or satisfied pursuant to the terms of any contract in existence
on the date hereof;
(p) excluding contracts covered by Section 6.1(q) or 6.1(r), enter
-------------- ------
into, modify in any material respect, amend in any material respect or
terminate any material contract or agreement to which the Company or any of
its Subsidiaries is a party or waive (except to the extent permitted by
Section 6.3), release or assign any material rights or claims;
-----------
(q) except to the extent permitted by item 6.1(q) of the Company
Letter, modify, waive or amend, or consent to
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<PAGE>
any modification, waiver or amendment of, any provision in any of the
following agreements (collectively, the "Asbestos Agreements"); (i) the
-------------------
Global Settlement Agreement; (ii) any of the exhibits to the Global
Settlement Agreement, including, without limitation, the Glossary of Terms
(Exhibit A), the Fibreboard Asbestos Compensation Trust Agreement (Exhibit
B), the Trust Distribution Process (Annex A to the aforesaid Trust
Agreement), the Defendant Class Settlement Agreement (Exhibit C), the
Escrow Agreement (Exhibit D) and the Assignment (Exhibit E); (iii) the
April 9, 1993 agreement between the Company and Continental; (iv) the
Trilateral Settlement Agreement; and (v) the Settlement Agreement, dated as
of August 5, 1993 (the "Ness Motley Agreement"), as heretofore amended,
---------------------
among the Company, Continental and Ness Motley Loadholt Richardson & Poole
and certain of its affiliate law firms (provided, however, that the Company
-----------------
shall be permitted to enter into the Memorandum of Understanding Regarding
Claims Processing, Information, and Payment Obligations among Continental,
the Company and the Fibreboard Asbestos Compensation Trust and to amend the
Ness Motley Agreement with the Ness Motley Statute of Limitations
Agreements and Equitable Allocation Fund amendments, substantially in the
form provided to counsel for Parent prior to the date hereof);
(r) enter into any agreement, or make any commitment, for the
resolution of any asbestos personal injury lawsuits or for the payment of
any settlement monies, fees, costs or disbursements relating thereto
exceeding $12.5 million in the aggregate per thirty (30) day period after
the date hereof unless (i) any payments in respect of such agreements or
commitments would be made entirely from funds provided by the Company's
insurance carriers and (ii) would not, in the event of Global Court
Disapproval (as defined in the Global Settlement Agreement), result in a
reduction or commitment of the amounts otherwise payable to the Company on
the Trigger Date pursuant to Section 2.3 of the Trilateral Settlement
Agreement; provided, however, that the Company may, without regard to the
-------- -------
restrictions set forth in this Section 6.1(r), pay and discharge, and agree
--------------
to pay and discharge, any claims with Outstanding Offers and Interim
Claims. As used herein, "Outstanding Offers" means offers of settlement
issued by the Company on or prior to the date hereof that are accepted
after the date hereof; or
(s) authorize, recommend, propose or announce an intention to do any
of the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
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<PAGE>
SECTION 6.2 No Solicitation. (a) The Company shall, and shall
---------------
direct and use its best efforts to cause its officers, directors, employees,
representatives and agents to, immediately cease any discussions or negotiations
with any parties that may be ongoing with respect to a Takeover Proposal (as
hereinafter defined). The Company shall not, nor shall it permit any of its
Subsidiaries to, nor shall it authorize or permit any of its officers, directors
or employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by it or any of its Subsidiaries to, directly
or indirectly, (i) solicit, initiate or knowingly encourage (including by way of
furnishing information) any inquiries or the making of any proposal which
constitutes, or may reasonably be expected to lead to, any Takeover Proposal or
(ii) participate in any discussions or negotiations regarding any Takeover
Proposal; provided, however, that if, at any time prior to the acceptance for
-------- -------
payment of Shares pursuant to the Offer, the Board of Directors of the Company
determines in good faith, after consultation with outside counsel, that it would
be consistent with its fiduciary responsibilities to the Company's stockholders
under applicable law, the Company may, in response to a Takeover Proposal which
was not solicited subsequent to the date hereof, and subject to compliance with
Section 6.2(c), (x) furnish information with respect to the Company to any
- --------------
person pursuant to a confidentiality agreement in substantially the same form as
the confidentiality agreement entered into between the Company and Parent (other
than for provisions similar to Section 6 thereof) and (y) participate in
discussions, investigations and/or negotiations regarding such Takeover
Proposal. Without limiting the foregoing, it is understood that any violation
of the restrictions set forth in the preceding sentence by any director or
executive officer of the Company or any of its Subsidiaries, whether or not such
person is purporting to act on behalf of the Company or any of its Subsidiaries
or otherwise, shall be deemed to be a breach of this Section 6.2(a) by the
--------------
Company. For purposes of this Agreement, "Takeover Proposal" means any inquiry,
-----------------
proposal or offer from any person relating to any direct or indirect acquisition
or purchase of 20% or more of the aggregate assets of the Company and its
Subsidiaries, taken as a whole, or 20% or more of the voting power of the shares
of Common Stock then outstanding or any tender offer or exchange offer that if
consummated would result in any person beneficially owning 20% or more of the
voting power of the shares of Common Stock then outstanding or any merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving the Company, other than the transactions
contemplated by this Agreement.
(b) Except as set forth in this Section 6.2, neither the Board of
-----------
Directors of the Company nor any committee thereof
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shall (i) withdraw or modify, or propose publicly to withdraw or modify, in a
manner adverse to Parent, the approval or recommendation by such Board of
Directors or such committee of the Offer, the Merger or this Agreement; provided
--------
that, the Board of Directors may, (A) in response to any Takeover Proposal,
suspend such recommendation for a period of up to 24 hours pending its analysis
of such Takeover Proposal or (B) at any time prior to the consummation of the
Offer, modify or withdraw such recommendation if the Board of Directors of the
Company determines in good faith, after consultation with outside counsel, that
it would be consistent with its fiduciary responsibilities to so modify or
withdraw such recommendation (regardless of the existence of a Superior Proposal
(as defined below) at such time); provided further that, unless this Agreement
-------- -------
shall have been terminated, any such suspension, modification or withdrawal
shall not prevent Parent and Sub, in its or their discretion, from consummating
the Offer and shall not affect any of the actions taken by the Company pursuant
to Section 4.17 of this Agreement, (ii) approve or recommend, or propose
------------
publicly to approve or recommend, any Takeover Proposal or (iii) cause the
Company to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement (each, an "Acquisition Agreement") related
---------------------
to any Takeover Proposal. Notwithstanding the foregoing, in the event that
prior to the acceptance for payment of Shares pursuant to the Offer the Board of
Directors of the Company determines in good faith, after consultation with
outside counsel, that it would be consistent with its fiduciary
responsibilities to the Company's stockholders under applicable law, the Board
of Directors of the Company may (subject to this and the following sentences)
withdraw or modify its approval or recommendation of the Offer, the Merger and
this Agreement, approve or recommend a Superior Proposal (as defined below) or
terminate this Agreement, but in each case, only at a time that is after the
second business day following Parent's receipt of written notice (a "Notice of
---------
Superior Proposal") (which obligation may be satisfied by the delivery of the
- -----------------
notice required by Section 6.2(c)) advising Parent that the Board of Directors
--------------
of the Company has received a Takeover Proposal that may constitute a Superior
Proposal, specifying the material terms and conditions of such Superior Proposal
and identifying the person making such Superior Proposal. For purposes of this
Agreement, a "Superior Proposal" means any proposal determined by the Board of
-----------------
Directors of the Company in good faith, after consultation with outside counsel,
to be a bona fide proposal and made by a third party to acquire, directly or
indirectly, for consideration consisting of cash, property and/or securities,
more than 50% of the combined voting power of the shares of Common Stock then
outstanding or all or substantially all the assets of the Company and otherwise
on terms which the Board of Directors of the Company determines in
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<PAGE>
its good faith judgment, after consultation with outside counsel and with a
financial advisor of nationally recognized reputation (such as Dillon Read), to
be more favorable to the Company's stockholders than the Offer and the Merger.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 6.2, the Company shall promptly advise
-----------
Parent orally and in writing of any request for information or of any Takeover
Proposal, the material terms and conditions of such request or Takeover Proposal
and the identity of the person making such request or Takeover Proposal. The
Company will endeavor to keep Parent reasonably informed of the overall status
of any such request or Takeover Proposal.
(d) Nothing contained in this Section 6.2 shall prohibit the Company
-----------
from taking and disclosing to its stockholders a position contemplated by Rules
14d-9 and 14e-2 promulgated under the Exchange Act or from making any disclosure
to the Company's stockholders if, in the good faith judgment of the Board of
Directors of the Company, after consultation with outside counsel, such
disclosure is necessary in order to comply with its fiduciary duties to the
Company's stockholders under applicable law or is otherwise required under
applicable law.
SECTION 6.3 Third Party Standstill Agreements. During the period
---------------------------------
from the date of this Agreement through the Effective Time, the Company shall
not terminate, amend, modify or waive any provision of any confidentiality or
standstill agreement to which the Company or any of its Subsidiaries is a party
(other than any involving Parent) unless the Company's Board of Directors shall
have determined in good faith, after consultation with outside counsel, that
failing to release any third party or to amend, modify or waive such provisions
would not be consistent with the Company's Board of Directors' fiduciary
responsibilities under applicable law.
SECTION 6.4 Disclosure to Parent. (a) The Company shall promptly
--------------------
advise Parent orally and in writing if there occurs, to the knowledge of the
Company, any change or event which results in the executive officers of the
Company having a good faith belief that such change or event has resulted in or
is reasonably likely to result in a Material Adverse Effect on the Company or
will prevent or result in a third party materially delaying the consummation of
the Offer or the Merger. The Company shall provide to Parent, and Parent shall
provide to the Company, copies of all filings made by the Company or Parent, as
the case may be, with any Governmental Entity in connection with this Agreement
and the transactions contemplated hereby.
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<PAGE>
(b) During the period from the date of this Agreement until such time
as Parent's designees shall constitute a majority of the Board of Directors of
the Company, the Company shall, and shall cause each of its Subsidiaries to, (i)
keep Parent and its advisors reasonably apprised of developments in the asbestos
personal injury litigation, including, without limitation, developments relating
to any of the Asbestos Agreements or relating to the Ahearn and Rudd settlement
------ ----
class actions filed in the United States District Court for the Eastern District
of Texas; and (ii) consult with Parent and its advisors concerning positions to
be taken by the Company or its Subsidiaries in the asbestos personal injury
litigation, including, without limitation, matters relating to any of the
Asbestos Agreements or to the Ahearn or Rudd settlement class actions; provided,
------ ---- --------
however, that nothing in this subsection shall obligate the Company to provide
- -------
information which is covered by an existing confidentiality agreement without
the consent of the counterparty thereto, which consent the Company shall seek
upon the request of either Parent or Sub, or to provide information subject to
privilege.
SECTION 6.5 Conduct of Asbestos Litigation. During the period from
------------------------------
the date of this Agreement until such time as Parent's designees shall
constitute a majority of the Board of Directors of the Company, without the
prior written consent of Parent, neither the Company nor any of its Subsidiaries
shall take or omit any action, which action or omission would materially
prejudice the position of the Company or any of its Subsidiaries in the asbestos
personal injury litigation or in the Ahearn or Rudd settlement class actions or
------ ----
under any of the Asbestos Agreements.
ARTICLE VII
ADDITIONAL AGREEMENTS
---------------------
SECTION 7.1 Stockholder Approval; Preparation of Proxy Statement.
----------------------------------------------------
(a) If approval of the Merger by stockholders of the Company (the "Company
-------
Stockholder Approval") is required by law, the Company shall, at Parent's
- --------------------
request, as soon as practicable following the expiration of the Offer in
accordance with the terms of Section 1.1 of this Agreement, so long as permitted
-----------
by law, duly call, give notice of, convene and hold a meeting of its
stockholders (the "Stockholders Meeting") for the purpose of obtaining the
--------------------
Company Stockholder Approval. The Company shall, through its Board of Directors
(but subject to the right of the Board of Directors to withdraw or modify its
approval or recommendation of the Offer, the Merger and this Agreement as set
forth in Section 6.2(b)), recommend to its stockholders that the
--------------
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<PAGE>
Company Stockholder Approval be given. Notwithstanding the foregoing, if Sub or
any other Subsidiary of Parent shall acquire shares entitled to cast 90% or more
of all the votes entitled to be cast on the Merger, the parties shall, at the
request of Parent, take all necessary and appropriate action to cause the Merger
to become effective as soon as reasonably practicable after the expiration of
the Offer without a Stockholders Meeting in accordance with Section 253 of the
DGCL. Without limiting the generality of the foregoing, so long as permitted by
law, the Company agrees that its obligations pursuant to the first sentence of
this Section 7.1 shall not be affected by (i) the commencement, public proposal,
-----------
public disclosure or communication to the Company of any Takeover Proposal or
(ii) the withdrawal or modification by the Board of Directors of the Company of
its approval or recommendation of the Offer, this Agreement or the Merger.
(b) If the Company Stockholder Approval is required by law, the
Company shall, at Parent's request, as soon as practicable following the
expiration of the Offer in accordance with the terms of Section 1.1, and to the
-----------
extent permitted by law, prepare and file a preliminary Proxy Statement with the
SEC and shall use its reasonable best efforts to respond to any comments of the
SEC or its staff, and, to the extent permitted by law, to cause the Proxy
Statement to be mailed to the Company's stockholders as promptly as practicable
after responding to all such comments to the satisfaction of the staff. The
Company shall notify Parent promptly of the receipt of any comments from the SEC
or its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and will supply
Parent with copies of all correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff, on the other hand,
with respect to the Proxy Statement or the Merger. If at any time prior to the
Stockholders Meeting there shall occur any event that should be set forth in an
amendment or supplement to the Proxy Statement, the Company shall promptly
prepare and mail to its stockholders such an amendment or supplement. The
Company shall not mail any Proxy Statement, or any amendment or supplement
thereto, to which Parent reasonably objects. Parent shall cooperate with the
Company in the preparation of the Proxy Statement or any amendment or supplement
thereto.
(c) Parent agrees to cause all Shares purchased pursuant to the Offer
and all other Shares of the Company entitled to vote on the Merger owned by
Parent or any Subsidiary of Parent to be voted in favor of the Company
Stockholder Approval.
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<PAGE>
SECTION 7.2 Access to Information. The Company shall, and shall
---------------------
cause each of its Subsidiaries to, upon reasonable notice, afford to Parent and
to the officers, employees, accountants, counsel, actuaries, financial advisors
and other representatives of Parent reasonable access to, and permit them to
make such inspections as they may reasonably require of, during normal business
hours during the period from the date of this Agreement through the Effective
Time, all their respective properties, books, contracts, commitments, documents
and records and, during such period, the Company shall, and shall cause each of
its Subsidiaries to, furnish promptly to Parent (i) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws and (ii)
all other information concerning its business, properties and personnel as
Parent may reasonably request; provided that the Company shall not be required
--------
to furnish to Parent any information which is subject to an attorney-client
privilege or which constitutes attorney work product or information relating to
asbestos litigation other than that which has been provided prior to the date of
this Agreement. All information obtained by or on behalf of Parent pursuant to
this Section 7.2 shall be kept confidential in accordance with the
-----------
Confidentiality Agreement dated April 23, 1997 between Parent and the Company.
SECTION 7.3 Fees and Expenses. (a) Except as provided below in this
-----------------
Section 7.3, all fees and expenses incurred in connection with the Offer, the
- -----------
Merger, this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such fees or expenses, whether or not the Offer or the
Merger is consummated.
(b) The Company shall pay, or cause to be paid, in same day funds to
Parent (x) $3,000,000 for reimbursement of Parent's expenses (the "Expense
-------
Reimbursement") and (y) $13,500,000 (the "Termination Fee") under the
- ------------- ---------------
circumstances and at the times set forth as follows:
(i) if Parent or Sub terminates this Agreement under Section 9.1(d),
--------------
the Company shall pay the Expense Reimbursement and the Termination Fee
upon demand;
(ii) if the Company terminates this Agreement under Section 9.1(e),
--------------
the Company shall pay the Expense Reimbursement and the Termination Fee
within one business day of such termination; and
(iii) if (1) Parent or the Company terminates this Agreement under
Section 9.1(b)(i)(y) or (2) Parent terminates this Agreement under Section
-------------------- -------
9.1(c) as a result
------
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<PAGE>
of a breach of a covenant, and, in each case, prior to such termination, a
Takeover Proposal shall have been made (other than a Takeover Proposal made
prior to the date hereof) and concurrently therewith or within twelve
months thereafter, (A) the Company enters into a merger agreement,
acquisition agreement or similar agreement (including, without limitation,
a letter of intent) with respect to a Takeover Proposal, or a Takeover
Proposal is consummated, involving any party (x) with whom the Company had
any discussions with respect to a Takeover Proposal, (y) to whom the
Company furnished information with respect to or with a view to a Takeover
Proposal or (z) who had submitted a proposal or expressed any interest
publicly in a Takeover Proposal, in the case of each of clauses (x), (y)
and (z), prior to such termination, or (B) the Company enters into a merger
agreement, acquisition agreement or similar agreement (including, without
limitation, a letter of intent) with respect to a Superior Proposal, or a
Superior Proposal is consummated, then, in the case of either (A) or (B)
above, the Company shall pay the Expense Reimbursement and the Termination
Fee upon the earlier of the execution of such agreement or upon
consummation of such Takeover Proposal or Superior Proposal.
SECTION 7.4 Options. (a) Each Company Stock Option which is
-------
outstanding immediately prior to the consummation of the Offer (an "Option")
------
pursuant to any stock option plan or long-term incentive plan of the Company in
effect on the date hereof (collectively, the "Company Stock Plans"), whether or
-------------------
not otherwise exercisable, shall become fully vested and exercisable. Upon the
consummation of the Offer each Option shall be canceled by the Company in return
for the payment, as hereinafter provided for which the holder thereof shall
thereupon be entitled to receive. Each such holder shall receive promptly (but
in no event later than five days) after the consummation of the Offer, a cash
payment in respect of such cancellation from the Company in an amount (if any)
equal to (i) the product of (x) the number of shares of Common Stock subject or
related to such Option and (y) the excess, if any, of the Merger Consideration
over the exercise or purchase price per share of Common Stock subject or related
to such Option, minus (ii) all applicable federal, state and local taxes
required to be withheld by the Company. The Company shall use its reasonable
best efforts to ensure that, after giving effect to the foregoing, no Option
shall be exercisable for Common Stock of the Company following the consummation
of the Offer.
(b) Each restricted stock agreement or stock unit agreement which is
outstanding immediately prior to the consummation of the Offer pursuant to any
Company Stock Plan,
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<PAGE>
whether or not otherwise exercisable, shall become fully vested. Upon the
consummation of the Offer each such agreement shall be canceled by the Company
in return for the payment as hereinafter provided for which the holder thereof
shall thereupon be entitled to receive. Each such holder shall receive promptly
(but in no event later than five days) after the consummation of the Offer, a
cash payment in respect of such cancellation from the Company in an amount equal
to (i) the product of (x) the number of shares of Common Stock subject or
related to such agreement and (y) the Merger Consideration, minus (ii) all
applicable federal, state and local taxes required to be withheld by the
Company. The Company shall use its reasonable best efforts to ensure that,
after giving effect to the foregoing, no such agreement shall be outstanding
following the consummation of the Offer.
(c) No further awards of any type shall be made under any Company
Stock Plan after the date of this Agreement.
SECTION 7.5 Public Announcements. Parent and the Company will
--------------------
consult with each other before issuing any press release or otherwise making any
public statements with respect to the transactions contemplated by this
Agreement and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by applicable
law, fiduciary duties or by obligations pursuant to any listing agreement with
any national securities exchange.
SECTION 7.6 Real Estate Transfer Tax. Parent and the Company agree
------------------------
that either the Surviving Corporation or Parent (without any liability to any of
the Company's stockholders) will pay any state or local tax which is
attributable to the transfer of the beneficial ownership of the Company's or its
Subsidiaries' real property, if any (collectively, the "Transfer Taxes"), and
--------------
any penalties or interest with respect to the Transfer Taxes, payable in
connection with the consummation of the Offer and the Merger. The Company
agrees to cooperate with Parent in the filing of any returns with respect to the
Transfer Taxes, including supplying in a timely manner a complete list of all
real property interests held by the Company and its Subsidiaries and any
information with respect to such property that is reasonably necessary to
complete such returns. The portion of the consideration allocable to the real
property of the Company and its Subsidiaries shall be determined by Parent in
its reasonable discretion. To the extent permitted by law, the stockholders of
the Company shall be deemed to have agreed to be bound by the allocation
established pursuant to this Section 7.6 in the preparation of any return with
-----------
respect to the Transfer Taxes.
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<PAGE>
SECTION 7.7 State Takeover Laws. If any "fair price" or "control
-------------------
share acquisition" statute or other similar statute or regulation shall become
applicable to the transactions contemplated hereby, Parent and the Company and
their respective Boards of Directors shall use their reasonable best efforts to
grant such approvals and take such actions as are necessary so that the
transactions contemplated hereby may be consummated as promptly as practicable
on the terms contemplated hereby and otherwise act to minimize the effects of
any such statute or regulation on the transactions contemplated hereby.
SECTION 7.8 Indemnification; Directors and Officers Insurance. From
-------------------------------------------------
and after the Effective Time, Parent agrees that it will and will cause the
Surviving Corporation to exculpate, indemnify and hold harmless all past and
present employees, officers, agents and directors of the Company and its
Subsidiaries (the "Indemnified Parties") to the same extent such persons are
-------------------
currently exculpated and indemnified by the Company pursuant to the Company's
Certificate of Incorporation and By-Laws for acts or omissions occurring at or
prior to the Effective Time and will cause the Surviving Corporation's
Certificate of Incorporation and By-Laws to continue to include provisions to
such effect. Parent shall cause the Surviving Corporation to provide, for an
aggregate period of not less than six years from the Effective Time, the
Company's directors and officers who are currently covered by the Company's
existing insurance and indemnification policy an insurance and indemnification
policy that provides coverage for events occurring prior to the Effective Time
(the "D&O Insurance") that is no less favorable than the Company's existing
-------------
policy or, if substantially equivalent insurance coverage is unavailable, the
best available coverage; provided, however, that the Surviving Corporation shall
-------- -------
not be required to pay an annual premium for the D&O Insurance in excess of 250
percent of the last annual premium paid prior to the date hereof (which the
Company represents and warrants to be $400,250), but in such case shall purchase
as much coverage as possible for such amount.
SECTION 7.9 Notification of Certain Matters. Parent shall give
-------------------------------
prompt notice to the Company, and the Company shall give prompt notice to
Parent, of: (i) the occurrence, or non-occurrence, in each case, to the
knowledge of the Company or Parent, as the case may be, of any event the
occurrence, or non-occurrence, of which results in the executive officers of the
Company or Parent, as the case may be, having a good faith belief that such
change or event would be reasonably likely to cause (x) any representation or
warranty of such entity contained in this Agreement that is not qualified as to
materiality to be untrue or inaccurate in any material respect, (y) any
representation or warranty of such entity contained in this Agreement that is
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<PAGE>
qualified as to materiality to be untrue or inaccurate in any respect, or (z)
any covenant, condition or agreement of such entity contained in this Agreement
not to be complied with or satisfied in all material respects; and (ii) the
executive officers of the Company or Parent, as the case may be, believing in
good faith that the Company or Parent, as the case may be, has, to the knowledge
of the Company or Parent, as the case may be, failed to comply with in all
material respects or satisfy in all material respects any covenant, condition or
agreement of such entity to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 7.9
- -------- ------- -----------
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.
SECTION 7.10 Board of Directors. Promptly after such time as Sub
------------------
purchases Shares pursuant to the Offer (but subject to the satisfaction of the
Minimum Condition), Sub shall be entitled, to the fullest extent permitted by
law, to designate at its option up to that number of directors, rounded to the
nearest whole number, of the Company's Board of Directors, subject to compliance
with Section 14(f) of the Exchange Act, as will make the percentage of the
Company's directors designated by Sub equal to the aggregate voting power of the
shares of Common Stock held by Parent or any of its Subsidiaries; provided,
--------
however, that in the event that Sub's designees are elected to the Board of
- -------
Directors of the Company, until the Effective Time, such Board of Directors
shall have at least three directors who are directors on the date of this
Agreement and who are not officers of the Company (the "Independent Directors");
---------------------
and provided, further that, in such event, if the number of Independent
-------- -------
Directors shall be reduced below three for any reason whatsoever, the remaining
Independent Directors shall, to the fullest extent permitted by law, designate a
person to fill such vacancy who shall be deemed to be an Independent Director
for purposes of this Agreement or, if no Independent Directors then remain, the
other directors shall designate three persons to fill such vacancies who shall
not be officers or affiliates of the Company or any of its Subsidiaries, or
officers or affiliates of Parent or any of its Subsidiaries, and such persons
shall be deemed to be Independent Directors for purposes of this Agreement.
Following the election or appointment of Sub's designees pursuant to this
Section 7.10 and prior to the Effective Time, any amendment, or waiver of any
- ------------
term or condition, of this Agreement or the Certificate of Incorporation or By-
Laws of the Company, any termination of this Agreement by the Company, any
extension by the Company of the time for the performance of any of the
obligations or other acts of Sub or waiver or assertion of any of the Company's
rights hereunder, and any other consent or action by the Board of Directors with
respect to this Agreement, will require the concurrence of a majority of the
Independent Directors and no
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other action by the Company, including any action by any other director of the
Company, shall be required for purposes of this Agreement. To the fullest
extent permitted by applicable law, the Company shall take all actions requested
by Parent which are reasonably necessary to effect the election of any such
designee, including mailing to its stockholders the Information Statement
containing the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder, and the Company agrees to make such mailing
with the mailing of the Schedule 14D-9 (provided that Sub shall have provided to
--------
the Company on a timely basis all information required to be included in the
Information Statement with respect to Sub's designees). Parent and Sub will be
solely responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. In connection with the
foregoing, the Company will promptly, at the option of Parent, to the fullest
extent permitted by law, either increase the size of the Company's Board of
Directors and/or obtain the resignation of such number of its current directors
as is necessary to enable Sub's designees to be elected or appointed to the
Company's Board of Directors as provided above.
SECTION 7.11 Reasonable Best Efforts. Subject to fiduciary
-----------------------
responsibilities, each of the Company, Parent and Sub agrees to use its
reasonable best efforts to cause the purchase of Shares pursuant to the Offer
and the consummation of the Merger to occur as soon as practicable. Without
limiting the foregoing, (a) each of the Company, Parent and Sub agree to use its
reasonable best efforts to take, or cause to be taken, all actions necessary to
comply promptly with all legal requirements that may be imposed on itself with
respect to the Offer and the Merger (which actions shall include furnishing all
information required under the HSR Act and in connection with approvals of or
filings with any other Governmental Entity) and shall promptly cooperate with
and furnish information to each other in connection with any such requirements
imposed upon any of them or any of their Subsidiaries in connection with the
Offer and the Merger and (b) each of the Company, Parent and Sub shall, and
shall cause its Subsidiaries to, use its reasonable best efforts to obtain (and
shall cooperate with each other in obtaining) any consent, authorization, order
or approval of, or any exemption by, any Governmental Entity or other public or
private third party required to be obtained or made by Parent, Sub, the Company
or any of their Subsidiaries in connection with the Offer and the Merger or the
taking of any action contemplated thereby or by this Agreement. Notwithstanding
anything to the contrary contained in this Agreement, in connection with any
filing or submission required or action to be taken by Parent, the Company or
any of its respective Subsidiaries to consummate the Offer,
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<PAGE>
the Merger or the other transactions contemplated in this Agreement, the Company
shall not, without Parent's prior written consent, commit to any divestiture of
assets or businesses of the Company and its Subsidiaries if such divested assets
and/or businesses are material to the assets or profitability of the Company and
its Subsidiaries taken as a whole; and neither Parent nor any of its
Subsidiaries shall be required to divest or hold separate or otherwise take or
commit to take any action that limits its freedom of action with respect to, or
its ability to retain, the Company or any of the businesses, product lines or
assets of Parent or any of its Subsidiaries or that would have a Material
Adverse Effect on Parent.
SECTION 7.12 Certain Litigation. The Company agrees that it shall
------------------
not settle any litigation commenced after the date hereof against the Company or
any of its directors by any stockholder of the Company relating to the Offer,
the Merger or this Agreement without the prior written consent of Parent, which
consent shall not be unreasonably withheld.
SECTION 7.13 Employee Benefits. (a) During the period from the
-----------------
Effective Time until December 31, 1998, Parent shall maintain or cause to be
maintained wages, compensation levels, employee pension and welfare plans for
the benefit of employees and former employees of the Company or its Subsidiaries
which, in the aggregate, are not less favorable than those wages, compensation
levels and other benefits under the Benefit Plans that are in effect as of the
date hereof; provided, however, that Parent shall not have any obligation to
-------- -------
provide benefits based on equity securities or any equivalent thereof. For all
purposes of eligibility to participate in and vesting in benefits provided under
employee benefits plans maintained by Parent and its Subsidiaries (but not for
purposes of determining benefits (or accruals thereof) under such plans) which
employees and former employees of the Company become eligible to participate in
after the Effective Time, all persons previously employed by the Company and its
Subsidiaries and then employed by Parent or its Subsidiaries shall be credited
with their years of service with the Company and its Subsidiaries and years of
service with prior employers to the extent service with prior employers is taken
into account under the Benefit Plans.
(b) The foregoing shall not constitute any commitment, contract,
understanding or guarantee (express or implied) on the part of the Parent or Sub
of a post-Effective Time employment relationship of any term of duration or on
any terms other than those that the Parent or Sub may establish. Employment of
any of the employees by Parent will be "at will" and may be terminated by Parent
or Sub at any time for any reason (subject to any legally binding agreement
other than this Agreement, or any
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applicable laws or collective bargaining agreement, or any other arrangement or
commitment). Except as otherwise provided in Sections 7.13 through 7.17,
------------- ----
nothing in this Agreement shall be interpreted as limiting the power of the
Surviving Corporation to amend or terminate any particular Benefit Plan or any
other employee benefit plan, program, agreement or policy or as requiring the
Surviving Corporation or Parent to offer to continue (other than as required by
its terms) any written employment contract.
SECTION 7.14 Severance Policy and Other Agreements. (a) With respect
-------------------------------------
to any officer or employee who is covered by a severance policy or plan separate
from the standard severance policy for the Company's employees (which separate
severance policy or plan is described in item 7.14 of the Company Letter),
Parent shall maintain (or shall cause to be maintained) such separate policy or
plan as in effect as of the date hereof, and, as to all other officers and
employees, Parent shall maintain (or shall cause to be maintained) the Company's
standard severance policy as in effect as of the date hereof for a period of at
least 12 months from the Effective Time.
(b) Parent shall honor or cause to be honored all severance agreements
and employment agreements with the Company's directors, officers and employees
to the extent disclosed in item 7.14 of the Company Letter (it being understood
that nothing herein shall be deemed to mean that the Company shall not be
required to honor its obligations under any severance agreement or employment
agreement to which it is a party).
SECTION 7.15 1997 Bonus. Parent will, or will cause the Surviving
----------
Corporation to, maintain the Company's bonus plans (as in effect on or before
March 1, 1997) through the end of the 1997 fiscal year, with bonuses to be paid
to the employee participating thereunder at the greater of (i) the target level,
if applicable, (ii) the prior year's bonus, or (iii) such bonus as the employee
would have earned if the transaction contemplated by this Agreement had not
occurred, in all events on a basis consistent with past practices.
SECTION 7.16 Credit for Deductibles. Parent will, or will cause the
----------------------
Surviving Corporation to, (i) waive all limitations as to preexisting
conditions, exclusions and waiting periods with respect to participation and
coverage requirements applicable to the employees of the Company under any
welfare plan that such employees may be eligible to participate in after the
Effective Time, other than limitations or waiting periods that are already in
effect with respect to such employees and that have not been satisfied as of the
Effective Time under any welfare plan maintained for the Company's employees
immediately
-45-
<PAGE>
prior to the Effective Time, and (ii) provide each employee of the Company with
credit for any co-payments and deductibles paid prior to the Effective Time in
satisfying any applicable deductible or out-of-pocket requirements under any
welfare plans that such employees are eligible to participate in after the
Effective Time.
SECTION 7.17 401(k)/Profit Sharing Contributions for 1997. Parent
--------------------------------------------
will, or will cause the Surviving Corporation to, prior to the end of the third
month following the end of the current fiscal year, make retirement
contributions to the Company's 401(k) plan on behalf of each eligible Company
employee who was employed on the last day of the current fiscal year of 4
percent of such employee's 1997 base salary and bonus up to $6,400 for each
Employee; provided, however, that for any amounts to which an employee would be
-------- -------
entitled in excess of $6,400 for those employees whose base salary and bonuses
are in excess of $160,000, such excess amounts shall be paid to each such
employee on a basis consistent with past practice. Notwithstanding the
foregoing, in the case of a Company employee who is terminated prior to December
31, 1997, the retirement contribution described in the previous sentence
(including any payment for any contribution in excess of $6,400) shall be made
not later than the date of the employee's termination.
ARTICLE VIII
CONDITIONS PRECEDENT
--------------------
SECTION 8.1 Conditions to Each Party's Obligation to Effect the
---------------------------------------------------
Merger. The respective obligations of each party to effect the Merger shall be
- ------
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) Company Stockholder Approval. If required by applicable law, the
----------------------------
Company Stockholder Approval shall have been obtained; provided, however, that
-------- -------
Parent and Sub shall vote all of their shares of capital stock of the Company
entitled to vote thereon in favor of the Merger.
(b) No Injunction or Restraint. No statute, rule, regulation,
--------------------------
executive order, decree, temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
Governmental Entity preventing the consummation of the Merger shall be in
effect; provided, however, that each of the parties shall have used its
-------- -------
reasonable best efforts to prevent the entry of any such temporary restraining
order, injunction or other order and to
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<PAGE>
appeal as promptly as possible any injunction or other order that may be
entered.
(c) Purchase of Shares. Sub shall have previously accepted for
------------------
payment and paid for Shares pursuant to the Offer.
(d) HSR Act. Any waiting period (and any extension thereof) under the
-------
HSR Act applicable to the Merger shall have expired or been terminated.
ARTICLE IX
TERMINATION AND AMENDMENT
-------------------------
SECTION 9.1 Termination. This Agreement may be terminated at any
-----------
time prior to the Effective Time, whether before or after the Company
Stockholder Approval (if required by applicable law):
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if (x) as a result of the failure of any of the Offer
Conditions set forth in Exhibit A, (other than the Minimum Condition)
---------
the Offer shall have terminated or expired in accordance with its
terms without Sub having accepted for payment any Shares pursuant to
the Offer consistent with Sub's obligations under Section 1.1 of this
-----------
Agreement or (y) as a result of the failure of the Minimum Condition,
the Offer shall have terminated or expired in accordance with its
terms without Sub having accepted for payment any Shares pursuant to
the Offer consistent with Sub's obligations under Section 1.1 of this
-----------
Agreement or (z) Sub shall have, consistent with its obligations
hereunder, failed to pay for the Shares prior to November 30, 1997
(the "Outside Date"); provided, however, that the right to terminate
------------ -------- -------
this Agreement pursuant to this Section 9.1(b)(i) shall not be
-----------------
available to any party whose failure to perform any of its obligations
under this Agreement results in the failure of any such Offer
Condition; or
(ii) if any United States or Canadian Governmental Entity shall
have issued an order, decree or ruling or taken any other action
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<PAGE>
permanently enjoining, restraining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree or
ruling or other action shall have become final and nonappealable;
provided, however, that the right to terminate this Agreement pursuant
-------- -------
to this Section 9.1(b)(ii) shall not be available to any party who has
------------------
not used its reasonable best efforts to cause such order to be lifted;
(c) by Parent or Sub prior to the purchase of Shares pursuant to the
Offer in the event of a breach by the Company of any representation,
warranty, covenant or other agreement contained in this Agreement which (i)
would give rise to the failure of a condition set forth in paragraph (d) or
(e) of Exhibit A and (ii) in the case of a breach of a covenant, cannot be
---------
or has not been cured within 20 days after the giving of written notice to
the Company, or, in the case of a breach of a representation or warranty,
cannot be or has not been cured within 90 days after the giving of written
notice to the Company;
(d) by Parent or Sub if either Parent or Sub is entitled to terminate
the Offer as a result of the occurrence of any event set forth in paragraph
(c) of Exhibit A to this Agreement); provided that the temporary suspension
--------- --------
of the recommendation of the Company's Board of Directors referred to
herein in accordance with Section 6.2(b) shall not give rise to a right of
--------------
termination pursuant to this Section 9.1(d);
--------------
(e) by the Company in accordance with Section 6.2(b); provided,
-------------- --------
however, that it has complied with all provisions thereof, including the
-------
notice provisions therein, and that it complies with the requirements of
Section 7.3 relating to the payment (including the timing of any payment)
-----------
of the Expense Reimbursement and the Termination Fee;
(f) by the Company, if (i) any of the representations or warranties
of Parent or Sub set forth in this Agreement that are qualified as to
materiality shall not be true and correct in any respect or any such
representations or warranties that are not so qualified shall not be true
and correct in any material respect, or (ii) Parent or Sub shall have
failed to perform in any material respect any material obligation or to
comply in any material respect with any material agreement or covenant of
Parent or Sub to
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<PAGE>
be performed or complied with by it under this Agreement and, in the case
of (i), such untruth or incorrectness cannot be or has not been cured
within 90 days after the giving of written notice to Parent or Sub, and, in
the case of (ii), such failure cannot be or has not been cured within 20
days after the giving of written notice to Parent or Sub; or
(g) by the Company, if the Offer has not been timely commenced in
accordance with Section 1.1;
-----------
SECTION 9.2 Effect of Termination. In the event of a termination of
---------------------
this Agreement by either the Company or Parent as provided in Section 9.1, this
-----------
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Sub or the Company or their respective
officers or directors, except with respect to Section 7.3, this Section 9.2 and
----------- -----------
Article X and the last sentences of each of Section 1.1(a), Section 1.2(c) and
- --------- -------------- --------------
Section 7.2; provided, however, that nothing herein shall relieve any party for
- ----------- -------- -------
liability for any breach hereof.
SECTION 9.3 Amendment. Subject to Section 7.10, this Agreement may
--------- ------------
be amended by the parties hereto, by action taken or authorized by their
respective Boards of Directors at any time before or after obtaining the Company
Stockholder Approval (if required by law), but after the Company Stockholder
Approval no amendment shall be made which by law requires further approval by
the stockholders of the Company without obtaining such further approval. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.
SECTION 9.4 Extension; Waiver. At any time prior to the Effective
-----------------
Time, the parties hereto, by action taken or authorized by their respective
Board of Directors, may, to the extent legally allowed, (i) subject to the
provisions of Section 7.10, extend the time for the performance of any of the
------------
obligations or other acts of the other parties hereto, (ii) subject to the
provisions of Section 7.10, waive any inaccuracies in the representations and
------------
warranties contained herein or in any document delivered pursuant hereto or
(iii) subject to the provisions of Section 7.10, waive compliance with any of
------------
the agreements or conditions contained herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
a written instrument signed on behalf of such party. The failure of any party
to this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of those rights.
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<PAGE>
ARTICLE X
GENERAL PROVISIONS
------------------
SECTION 10.1 Non-Survival of Representations and Warranties and
--------------------------------------------------
Agreements. None of the representations and warranties in this Agreement or in
- ----------
any instrument delivered pursuant to this Agreement shall survive the Effective
Time except that the agreements set forth in Article III, Sections 7.8, 7.13,
----------- ------------ ----
7.14, 7.15, 7.16 and 7.17 and Article X shall survive the Effective Time.
- ---- ---- ---- ---- ---------
SECTION 10.2 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given when delivered personally, one day
after being delivered to an overnight courier or when telecopied (with a
confirmatory copy sent by overnight courier) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Parent or Sub, to:
Owens Corning
One Owens Corning Parkway
Toledo, Ohio 43659
Attn: Christian L. Campbell
with a copy to:
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attn: Larry A. Barden
Paul L. Choi
(b) if to the Company, to:
Fibreboard Corporation
2200 Ross Avenue, Suite 3600
Dallas, Texas 75201
Attn: Michael R. Douglas
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attn: Robert E. Spatt
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<PAGE>
SECTION 10.3 Interpretation. When a reference is made in this
--------------
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." As used in this Agreement, the term
"subsidiary" or "Subsidiary" of any person means another person, an amount of
---------- ----------
the voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person. As used in this Agreement, the term "Significant Subsidiary" of any
----------------------
person means a Subsidiary of such person that would constitute a "significant
subsidiary" of such person within the meaning of Rule 1.02(v) of Regulation S-X
as promulgated by the SEC. As used in this Agreement, "Material Adverse Change"
-----------------------
or "Material Adverse Effect" means, when used in connection with the Company or
-----------------------
Parent, as the case may be, any change or effect that is materially adverse to
the business, financial condition or results of operations of the Company and
its Subsidiaries taken as a whole or Parent and its Subsidiaries taken as a
whole, as the case may be. As used in this Agreement, "consummation of the
-------------------
Offer" means the purchase of Shares pursuant to the Offer. Whenever the word
- -----
"knowledge" is used in this Agreement, it shall mean the actual knowledge of the
officers of the Company and the individuals identified in item 10.3 of the
Company Letter, in the case of the Company, or the officers of Parent, in the
case of Parent.
SECTION 10.4 Counterparts. This Agreement may be executed in
------------
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
SECTION 10.5 Entire Agreement; No Third-Party Beneficiaries. Except
-----------------------------------------------
for the Confidentiality Letter referred to in the last sentence of Section 7.2,
-----------
this Agreement constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof; provided, however, that it is expressly
-------- -------
agreed that the transactions contemplated by this Agreement do not violate
Section 6 of the Confidentiality Letter. This Agreement, except for the
provisions of Section 7.8, is not intended to confer upon any person other than
-----------
the parties hereto any rights or remedies hereunder.
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<PAGE>
SECTION 10.6 Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 10.7 Assignment. Neither this Agreement nor any of the
----------
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties, except
that Sub may assign, in its sole discretion, any of or all its rights, interests
and obligations under this Agreement to Parent or to any direct or indirect
wholly owned Subsidiary of Parent, but no such assignment shall relieve Sub of
any of its obligations hereunder. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
SECTION 10.8 Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated by this Agreement may be consummated as
originally contemplated to the fullest extent possible.
SECTION 10.9 Enforcement of This Agreement. The parties hereto agree
-----------------------------
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, such remedy being in addition to
any other remedy to which any party is entitled at law or in equity.
SECTION 10.10 Obligations of Subsidiaries. Whenever this Agreement
---------------------------
requires any Subsidiary of Parent (including Sub) or of the Company to take any
action, such requirement shall be deemed to include an undertaking on the part
of Parent or the Company, as the case may be, to cause such Subsidiary to take
such action.
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SECTION 10.11 Asbestos Agreements. Nothing herein contained shall
-------------------
require, or be construed to require, the Company to take or omit any action,
which action or omission would constitute a breach of, or a default under, any
of the Asbestos Agreements, and any action or omission required to avoid a
breach of, or default under, any of the Asbestos Agreements shall not be deemed
a willful or intentional breach hereof. Both parties recognize the Company's
obligations on the Interim Committee pursuant to Article 7 of the Global
Settlement Agreement and subsequent court orders to resolve Interim Claims and
to resolve Unsettled Present Claims and Presently Settled Claims (as defined in
the Asbestos Agreements) in accordance with applicable law.
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<PAGE>
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
OWENS CORNING
By: /s/ Glen H. Hiner
--------------------------------
Name: Glen H. Hiner
Title: Chairman & CEO
SIERRA CORP.
By: /s/ Christian L. Campbell
--------------------------------
Name: Christian L. Campbell
Title: Senior Vice President, General
Counsel & Secretary
FIBREBOARD CORPORATION
By: /s/ John D. Roach
---------------------------------
Name: John D. Roach
Title: Chairman, President & CEO
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<PAGE>
EXHIBIT A
---------
CONDITIONS OF THE OFFER
-----------------------
Notwithstanding any other term of the Offer, but subject, in all
cases, to Parent's and Sub's obligations set forth under the Merger Agreement,
including, without limitation, under Section 1.1 and Section 7.11, Sub shall not
----------- ------------
be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating
to Sub's obligation to pay for or return tendered Shares after the termination
or withdrawal of the Offer), to pay for any Shares tendered pursuant to the
Offer unless (i) there shall have been validly tendered and not withdrawn prior
to the expiration of the Offer such number of Shares that would constitute a
majority of the voting power of the shares of Common Stock (assuming the
exercise of all options to purchase, and the conversion or exchange of all
securities convertible or exchangeable into, shares of Common Stock outstanding
at the expiration date of the Offer) (the "Minimum Condition") and (ii) any
-----------------
waiting period under the HSR Act applicable to the purchase of Shares pursuant
to the Offer shall have expired or been terminated prior to the expiration of
the Offer. Furthermore, notwithstanding any other term of the Offer, but
subject, in all cases, to Parent's and Sub's obligations set forth in the Merger
Agreement under Section 1.1 and, as to paragraphs (a) and (b) below, Section
----------- -------
7.11, Sub shall not be required to accept for payment or, subject as aforesaid,
- ----
to pay for any Shares not theretofore accepted for payment or paid for, and may
terminate the Offer at any time if, at any time on or after the date of this
Agreement and before the acceptance of such Shares for payment or the payment
therefor, any of the following conditions exists (other than as a result of any
action or inaction of Parent or any of its Subsidiaries that constitutes a
breach of this Agreement):
(a) there shall be instituted or pending by any governmental agency
or similar authority in any United States federal or state court or
administrative agency or in any Canadian federal or provincial court or
administrative agency any suit, action, proceeding, application or
counterclaim which would reasonably be expected to (i) restrain or prohibit
the acquisition by Parent or Sub of any Shares under the Offer, the
consummation of the Offer or the Merger or the performance of any of the
other transactions contemplated by this Agreement, or require the Company,
Parent or Sub to pay any damages that are material in
A-1
<PAGE>
relation to the Company and its Subsidiaries taken as a whole, (ii)
prohibit or limit the ownership or operation by the Company, Parent or any
of their respective Subsidiaries of any material business or assets of the
Company and its Subsidiaries, or Parent and its Subsidiaries, or to compel
the Company or Parent to dispose of or hold separate any material business
or assets of the Company and its Subsidiaries or Parent and its
Subsidiaries, as a result of the Offer, the Merger or any of the other
transactions contemplated by this Agreement, (iii) impose material
limitations on the ability of Parent or Sub to acquire or hold, or exercise
full rights of ownership of, any Shares to be accepted for payment pursuant
to the Offer, including, without limitation, the right to vote such Shares
on all matters properly presented to the stockholders of the Company, (iv)
prohibit Parent or any of its Subsidiaries from effectively controlling any
business or operations of the Company or its Subsidiaries or (v) which
otherwise is reasonably likely to have a material adverse effect on the
business, properties, assets, financial condition or results of operations
of the Company and its Subsidiaries taken as a whole;
(b) there shall be enacted, entered, enforced, promulgated or deemed
applicable to the Offer or the Merger by any United States federal or state
governmental agency, court or similar authority, any statute, rule,
regulation, judgment, order or injunction, other than the application to
the Offer or the Merger of applicable waiting periods under the HSR Act,
that would reasonably be expected to result, directly or indirectly, in any
of the consequences referred to in clauses (i) through (v) of paragraph (a)
above;
(c) the Board of Directors of the Company or any committee thereof
shall have and be continuing to have suspended, withdrawn or modified in a
manner adverse to Parent or Sub its approval or recommendation of the
Offer, the Merger or this Agreement, or approved or recommended any
Takeover Proposal, or shall have resolved to take any of the foregoing
actions;
(d) any of the representations and warranties of the Company set
forth in this Agreement that are qualified as to materiality shall not be
true and correct in any respect or any such representations and warranties
that are not so qualified shall not be true
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and correct in any material respect, in each case, at the date of this
Agreement and as if such representations and warranties were made as of
such time of determination (except that representations and warranties that
speak as of a specified date shall only be true and correct to such extent
as of such date);
(e) the Company shall have and be continuing to have failed to
perform in any material respect any material obligation or to comply in any
material respect with any material agreement or material covenant of the
Company to be performed or complied with by it under this Agreement;
(f) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on a
national securities exchange in the United States (excluding any
coordinated trading halt triggered solely as a result of a specified
increase or decrease in a market index or similar "circuit breaker"
process), (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (iii) any material
limitation (whether or not mandatory) by any Governmental Entity on, or
other similar event that materially adversely affects, the extension of
credit in the United States by banks or other lending institutions, (iv) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States
which materially adversely affects the extension of credit, or (v) from the
date of this Agreement through the date of termination or expiration, a
decline of at least 25% in either the Dow Jones Industrial Average or the
Standard & Poor's 500 Index;
(g) there shall have occurred and be continuing any Material Adverse
Change with respect to the Company (other than changes in general economic
conditions or in economic conditions generally affecting the industry in
which the Company operates); or
(h) this Agreement shall have been terminated in accordance with its
terms;
which, in the judgment of Sub with respect to each and every matter referred to
above and regardless of the circumstances (including any action or inaction by
Sub or any of its affiliates not inconsistent with the terms hereof) giving rise
to any such
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condition, makes it inadvisable to proceed with the Offer or with such
acceptance for payment of or payment for Shares or to proceed with the Merger.
The foregoing conditions are for the sole benefit of Parent and Sub
and may, subject to the terms of this Agreement, be waived by Parent and Sub in
whole or in part at any time and from time to time in their sole discretion.
The failure by Parent or Sub at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right, the waiver of any such right
with respect to particular facts and circumstances shall not be deemed a waiver
with respect to any other facts and circumstances and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
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