<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
(AMENDMENT NO. 4)
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
AND
AMENDMENT NO. 8 TO
SCHEDULE 13D UNDER
THE SECURITIES EXCHANGE ACT OF 1934
---------------------
ASARCO INCORPORATED
(Name of Subject Company)
ASMEX CORPORATION
AND
GRUPO MEXICO, S.A. DE C.V.
(Bidders)
------------------------
COMMON STOCK, NO PAR VALUE
(INCLUDING THE ASSOCIATED JUNIOR
PARTICIPATING PREFERRED STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
------------------------
04341310
(CUSIP Number of Class of Securities)
------------------------
Daniel Tellechea Salido
Managing Director for Administration and Finance
Grupo Mexico, S.A. de C.V.
Baja California 200
Colonia Roma Sur
06760 Mexico City, Mexico
Telephone: 011-525-574-2067
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
COPY TO:
Lori Anne Czepiel, Esq.
Brown & Wood LLP
One World Trade Center
New York, New York 10048
Telephone: (212) 839-5300
Facsimile: (212) 839-5599
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<PAGE>
This amendment constitutes Amendment No. 4 to the Tender Offer Statement on
Schedule 14D-1 as the same may have been amended from time to time (as amended
hereby, the "Statement") and the Amendment No. 8 to Schedule 13D and relates to
the offer by Grupo Mexico, S.A. de C.V., a Mexican corporation ("Parent")
through its wholly owned subsidiary, ASMEX Corporation, a Delaware corporation
("Purchaser"), to purchase all of the outstanding shares of common stock,
without par value (together with the associated junior participating preferred
stock purchase rights, the "Common Stock"), of ASARCO Incorporated, a New Jersey
corporation ("ASARCO"), at a purchase price of $29.75 per share of Common Stock,
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 September 27, 1999,
as amended (the "Offer to Purchase"), a copy of which is attached to this
Statement as Exhibit (a)(1), as amended and supplemented by Supplement No. 1
thereto dated October 8, 1999 ("Supplement No. 1"), a copy of which is attached
to this Statement as Exhibit (a)(10), as amended and supplemented by Supplement
No. 2 thereto dated October 26, 1999 ("Supplement No. 2"), a copy of which is
attached to this Statement as Exhibit (a)(14) (which, as may have be amended or
supplemented from time to time, together with the Offer to Purchase constitute
the "Offer"). Capitalized terms not defined herein have the meanings ascribed in
the Offer to Purchase. The item numbers and responses thereto below are in
accordance with the requirements of Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
Item 1 is hereby amended and supplemented by the following:
(b) The information set forth in the "INTRODUCTION" and "Section 1--Amended
Terms of the Offer; Expiration Date" in Supplement No. 2 is incorporated herein
by reference.
(c) The information set forth in "Section 2--Price Range of Shares of Common
Stock; Dividends" in Supplement No. 2 is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
Item 3 is hereby amended and supplemented by the following:
(a), (b) The information set forth in the "INTRODUCTION",
"Section 5--Background of the Offer; Contacts with ASARCO", and "Section 6--The
Merger Agreement" in Supplement No. 2 is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 4 is hereby amended and supplemented by the following:
(a), (b) The information set forth in "Section 4--Source and Amount of
Funds" in Supplement No. 2 is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
Item 5 is hereby amended and supplemented by the following:
The information in "INTRODUCTION", "Section 5--Background of the Offer;
Contacts with ASARCO" and "Section 8--Purpose of the Offer and Merger; Plans for
ASARCO; Certain Considerations" in Supplement No. 2 is incorporated herein by
reference.
2
<PAGE>
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
Item 7 is hereby amended and supplemented by the following:
The information set forth in the "INTRODUCTION", "Section 5--Background of
the Offer; Contacts with ASARCO", and "Section 6--The Merger Agreement" in
Supplement No. 2 is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Item 9 is hereby amended and supplemented by the following:
The information set forth in "Section 3--Certain Information Concerning
Purchaser, Parent and Certain Affiliates" in Supplement No. 2 is incorporated
herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
Item 10 is hereby amended and supplemented by the following:
On October 25, 1999, Parent issued a press release relating to the execution
of the Agreement, a copy of which is filed as Exhibit (a)(18) and incorporated
herein by reference. Exhibit (a)(12), which was previously filed in an erroneous
transmission, is superseded for all purposes by Exhibit (a)(18).
(b), (c) The information set forth in "Section 9--Certain Legal Matters;
Regulatory Approvals; Certain Litigation" in Supplement No. 2 is incorporated by
reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<S> <C>
(a)(1) Offer to Purchase dated September 27, 1999.*
(a)(2) Form of Letter of Transmittal.*
(a)(3) Form of Notice of Guaranteed Delivery.*
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(a)(5) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.*
(a)(6) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.*
(a)(7) Form of Summary Advertisement dated September 27, 1999.*
(a)(8) Press release of Parent dated September 24, 1999.*
(a)(9) Press release of Parent dated September 27, 1999.*
(a)(10) Supplement No. 1 to the Offer to Purchase dated October 8,
1999.*
(a)(11) Press release of Parent dated October 7, 1999.*
(a)(12) Press release of Parent dated October 25, 1999.+
(a)(13) Supplement No. 2 to the Offer to Purchase dated October 26,
1999.
(a)(14) Form of Revised Letter of Transmittal.
(a)(15) Form of Revised Notice of Guaranteed Delivery.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
(a)(16) Form of Revised Letter to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(17) Form of Revised Letter to Clients for use by Brokers,
Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(a)(18) Press release of Parent dated October 25, 1999 (supersedes
Exhibit (a)(12)).
(b)(1) Commitment Letter from The Chase Manhattan Bank and Chase
Securities Inc. dated September 24, 1999.*
(b)(2) First Amended and Restated Commitment Letter from the Chase
Manhattan Bank and Chase Securities Inc. dated October 5,
1999.*
(b)(3) Second Amended and Restated Commitment Letter from The Chase
Manhattan Bank and Chase Securities Inc. dated October 7,
1999.*
(b)(4) Third Amended and Restated Commitment Letter from The Chase
Manhattan Bank and Chase Securities Inc. dated October 15,
1999.*
(b)(5) Fourth Amended and Restated Commitment Letter from The Chase
Manhattan Bank and Chase Securities Inc. dated October 22,
1999.
(c)(1) Agreement and Plan of Merger among ASARCO, Parent and
Purchaser, dated as of October 25, 1999.*
(d) Not applicable.
(e) Not applicable.
(f) None.
(g)(1) 1997 Annual Report of Parent.*
(g)(2) 1998 Annual Report of Parent.*
</TABLE>
- ------------------------
* Previously filed.
+ Exhibit (a)(12) is superseded by Exhibit (a)(18).
4
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: October 26, 1999
<TABLE>
<S> <C> <C> <C>
GRUPO MEXICO, S.A. DE C.V.
By: /s/ DANIEL TELLECHEA SALIDO
-----------------------------------------
Name: Daniel Tellechea Salido
Title: MANAGING DIRECTOR FOR ADMINISTRATION
AND FINANCE
GRUPO MEXICO, S.A. DE C.V.
By: /s/ HECTOR CALVA RUIZ
-----------------------------------------
Name: Hector Calva Ruiz
Title: MANAGING DIRECTOR FOR EXPLORATION
AND PROJECTS
ASMEX CORPORATION
By: /s/ DANIEL TELLECHEA SALIDO
-----------------------------------------
Name: Daniel Tellechea Salido
Title: VICE PRESIDENT AND TREASURER
</TABLE>
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<S> <C>
(a)(1) Offer to Purchase dated September 27, 1999.*
(a)(2) Form of Letter of Transmittal.*
(a)(3) Form of Notice of Guaranteed Delivery.*
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(a)(5) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.*
(a)(6) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.*
(a)(7) Form of Summary Advertisement dated September 27, 1999.*
(a)(8) Press release of Parent dated September 24, 1999.*
(a)(9) Press release of Parent dated September 27, 1999.*
(a)(10) Supplement No. 1 to the Offer to Purchase dated October 8,
1999.*
(a)(11) Press release of Parent dated October 7, 1999.*
(a)(12) Press release of Parent dated October 25, 1999.+
(a)(13) Supplement No. 2 to the Offer to Purchase dated October 26,
1999.
(a)(14) Form of Revised Letter of Transmittal.
(a)(15) Form of Revised Notice of Guaranteed Delivery.
(a)(16) Form of Revised Letter to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(17) Form of Revised Letter to Clients for use by Brokers,
Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(a)(18) Press release of Parent dated October 25, 1999 (supersedes
Exhibit (a)(12)).
(b)(1) Commitment Letter from The Chase Manhattan Bank and Chase
Securities Inc. dated September 24, 1999.*
(b)(2) First Amended and Restated Commitment Letter from the Chase
Manhattan Bank and Chase Securities Inc. dated October 5,
1999.*
(b)(3) Second Amended and Restated Commitment Letter from The Chase
Manhattan Bank and Chase Securities Inc. dated October 7,
1999.*
(b)(4) Third Amended and Restated Commitment Letter from The Chase
Manhattan Bank and Chase Securities Inc. dated October 15,
1999.*
(b)(5) Fourth Amended and Restated Commitment Letter from The Chase
Manhattan Bank and Chase Securities Inc. dated October 22,
1999.
(c)(1) Agreement and Plan of Merger among ASARCO, Parent and
Purchaser, dated as of October 25, 1999.*
(d) Not applicable.
(e) Not applicable.
(f) None.
(g)(1) 1997 Annual Report of Parent.*
(g)(2) 1998 Annual Report of Parent.*
</TABLE>
- ------------------------
* Previously filed.
+ Exhibit (a)(12) is superseded by Exhibit (a)(18).
6
<PAGE>
SUPPLEMENT NO. 2 TO THE OFFER TO PURCHASE DATED SEPTEMBER 27, 1999
ASMEX CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
GRUPO MEXICO, S.A. DE C.V.
HAS INCREASED THE PRICE OF ITS
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE RIGHTS)
OF
ASARCO INCORPORATED
TO
$29.75 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 9, 1999,
UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF ASARCO INCORPORATED ("ASARCO") HAS UNANIMOUSLY
DETERMINED THAT THE MERGER AGREEMENT (AS DEFINED HEREIN) AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING EACH OF THE OFFER AND THE MERGER ARE FAIR TO,
AND IN THE BEST INTERESTS OF, THE HOLDERS OF ASARCO COMMON STOCK, HAS APPROVED
AND ADOPTED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER (AS DEFINED HEREIN), AND RECOMMENDS THAT
SHAREHOLDERS OF ASARCO ACCEPT THE OFFER AND TENDER THEIR SHARES OF COMMON STOCK
PURSUANT TO THE OFFER.
--------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT
NUMBER OF SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED JUNIOR PARTICIPATING
PREFERRED STOCK PURCHASE RIGHTS (INCLUDING ANY SUCCESSORS THERETO, THE
"RIGHTS")), WITHOUT PAR VALUE (THE "COMMON STOCK"), OF ASARCO, WHICH, TOGETHER
WITH SHARES OF COMMON STOCK OWNED BY GRUPO MEXICO, S.A. DE C.V., CONSTITUTE AT
LEAST 80% OF THE SHARES OF COMMON STOCK OUTSTANDING ON THE DATE SUCH SHARES ARE
PURCHASED. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS DESCRIBED IN
SECTION 7.
--------------------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
shares of Common Stock should either (i) complete and sign the original (blue)
Letter of Transmittal or the revised (yellow) Letter of Transmittal (or a
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, have such shareholder's signature thereon guaranteed if required by
Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of
Transmittal (or such facsimile thereof) and any other required documents to the
Depositary and either deliver the certificates for such shares of Common Stock
and, if separate, the certificates representing the associated Rights to the
Depositary along with the Letter of Transmittal (or a facsimile thereof) or
deliver such shares of Common Stock (and Rights, if applicable) pursuant to the
procedure for book-entry transfer set forth in Section 3 of the Offer to
Purchase prior to the expiration of the Offer or (ii) request such shareholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such shareholder. A shareholder having shares of Common Stock
(and, if applicable, Rights) registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if such shareholder
desires to tender such shares of Common Stock (and, if applicable, Rights).
Any shareholder who desires to tender shares of Common Stock (and, if
applicable, Rights) and whose certificates for such shares (and, if applicable,
Rights) are not immediately available, or who cannot comply with the procedures
for book-entry transfer described in the Offer to Purchase on a timely basis,
may tender such shares of Common Stock (and, if applicable, Rights) by following
the procedures for guaranteed delivery set forth in Section 3 of the Offer to
Purchase.
Questions and requests for assistance may be directed to the Information
Agent (as defined in the Offer to Purchase) or the Dealer Manager (as defined in
the Offer to Purchase) at their respective addresses and telephone numbers set
forth on the back cover of this Supplement. Additional copies of the original
Offer to Purchase, Supplement No. 1 thereto, dated October 8, 1999, this
Supplement, the Letter of Transmittal or other tender offer materials may be
obtained from the Information Agent.
----------------------------------
THE DEALER MANAGER FOR THE OFFER IS:
CHASE SECURITIES INC.
October 26, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C> <C>
INTRODUCTION..................................................... 1
1. Amended Terms of the Offer; Expiration Date................. 3
2. Price Range of Shares of Common Stock; Dividends............ 4
3. Certain Information Concerning Purchaser, Parent and Certain
Affiliates.................................................. 4
4. Source and Amount of Funds.................................. 6
5. Background of the Offer; Contacts with ASARCO............... 6
6. The Merger Agreement........................................ 8
7. Conditions of the Offer..................................... 17
8. Purpose of the Offer and the Merger; Plans for ASARCO;
Certain Considerations...................................... 19
9. Dividends and Distributions.................................
10. Certain Legal Matters, Regulatory Approvals; Certain
Litigation................................................ 19
11. Miscellaneous............................................... 19
</TABLE>
ii
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF ASARCO INCORPORATED:
INTRODUCTION
The following information amends and supplements the Offer to Purchase,
dated September 27, 1999, of ASMEX Corporation ("Purchaser"), a Delaware
corporation and a wholly owned subsidiary of Grupo Mexico, S.A. de C.V., a
Mexican corporation ("Parent"), as previously supplemented by Supplement No. 1
("Supplement No. 1"), dated October 8, 1999 (as supplemented by Supplement No.
1, this Supplement, and as may be further amended and supplemented the "Offer to
Purchase"; capitalized terms not otherwise defined herein having the meanings
ascribed therein). Pursuant to this Supplement, Purchaser is offering to
purchase all of the outstanding shares of common stock, without par value (the
"Common Stock"), of ASARCO Incorporated, a New Jersey corporation ("ASARCO"),
including the associated Junior Participating Preferred Stock Purchase Rights
(the "Rights") issued pursuant to the Rights Agreement, dated as of January 28,
1998, as amended as of July 15, 1999, between ASARCO and The Bank of New York,
as Rights Agent (as such agreement may be further amended and including any
successor agreement, the "Rights Agreement"), at a price of $29.75 per share of
Common Stock, net to the seller in cash, without interest thereon (the "Offer
Price"), upon the terms and subject to the conditions set forth in the Offer to
Purchase, this Supplement and in the related revised (yellow) Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"). Unless the context otherwise requires, all references to Common Stock
shall include the associated Rights, and all references to the Rights shall
include the benefits that may inure to holders of the Rights pursuant to the
Rights Agreement, including the right to receive any payment due upon redemption
of the Rights.
This Supplement should be read in conjunction with the Offer to Purchase.
Except as set forth in this Supplement and in the revised (yellow) Letter of
Transmittal, the terms and conditions previously set forth in the Offer to
Purchase, and the original (blue) Letter of Transmittal mailed with the Offer to
Purchase and Supplement No. 1, remain applicable in all respects to the Offer.
Procedures for tendering shares of Common Stock are set forth in Section 3
of the Offer to Purchase. Tendering shareholders may continue to use the
original (blue) Letter of Transmittal and the original (grey) Notice of
Guaranteed Delivery previously circulated with the Offer to Purchase, or they
may use the revised (yellow) Letter of Transmittal and the revised (salmon)
Notice of Guaranteed Delivery circulated with this Supplement. While the
original (blue) Letter of Transmittal previously circulated with the Offer to
Purchase refers only to the Offer to Purchase, shareholders using such document
to tender their shares of Common Stock will nevertheless be deemed to be
tendering pursuant to the amended Offer (including the amendments and
supplements made by this Supplement) and will receive the increased Offer price
per share of Common Stock described in this Supplement if shares of Common Stock
are accepted for payment and paid for by Purchaser pursuant to the Offer.
SHARES OF COMMON STOCK PREVIOUSLY VALIDLY TENDERED AND NOT WITHDRAWN
CONSTITUTE VALID TENDERS FOR PURPOSES OF THE OFFER. SHAREHOLDERS ARE NOT
REQUIRED TO TAKE ANY FURTHER ACTION WITH RESPECT TO SUCH SHARES IN ORDER TO
RECEIVE THE INCREASED OFFER PRICE OF $29.75 PER SHARE OF COMMON STOCK IF SHARES
OF COMMON STOCK ARE ACCEPTED FOR PAYMENT AND PAID FOR BY PURCHASER PURSUANT TO
THE OFFER, EXCEPT AS MAY BE REQUIRED BY THE GUARANTEED DELIVERY PROCEDURE IF
SUCH PROCEDURE WAS UTILIZED. SEE SECTION 4 OF THE OFFER TO PURCHASE FOR THE
PROCEDURES FOR WITHDRAWING SHARES TENDERED PURSUANT TO THE OFFER.
ASARCO, Parent and Purchaser have entered into an Agreement and Plan of
Merger, dated as of October 25, 1999 (the "Merger Agreement"), which provides
for, among other things, (i) an increase in the price per share of Common Stock
to be paid pursuant to the Offer from $29.50 per share to $29.75 per share, net
to the seller in cash, (ii) the amendment and restatement of the conditions to
the Offer as set forth in their entirety in Section 7 of this Supplement,
(iii) the extension of the Offer such that the Offer
1
<PAGE>
and withdrawal rights will expire at 12:00 Midnight, New York City time, on
Tuesday, November 9, 1999 and (iv) the merger of the Purchaser with and into
ASARCO (the "Merger") following the consummation of the Offer. In the Merger,
each share of Common Stock issued and outstanding immediately prior to the
effective time (the "Effective Time") of the Merger (other than any shares of
Common Stock held in the treasury of ASARCO or by any wholly owned subsidiary of
ASARCO, or such shares owned by Parent, Purchaser or any other wholly owned
subsidiaries of Parent) shall be converted into the right to receive the Offer
Price in cash, payable to the holder thereof, without interest thereon, upon
surrender of the certificate formerly representing such share of Common Stock in
accordance with the terms of the Merger Agreement.
THE ASARCO BOARD HAS UNANIMOUSLY DETERMINED THAT THE MERGER AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING EACH OF THE OFFER AND THE
MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE HOLDERS OF ASARCO COMMON
STOCK, HAS APPROVED AND ADOPTED THE MERGER AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER AND RECOMMENDS THAT
HOLDERS OF ASARCO ACCEPT THE OFFER AND TENDER THEIR SHARES OF COMMON STOCK
PURSUANT TO THE OFFER.
Pursuant to the Merger Agreement, ASARCO has represented that (i) the
PD Merger Agreement has been terminated pursuant to the Notice of Termination,
dated October 25, 1999, delivered by ASARCO to Phelps Dodge, which Notice of
Termination was accompanied by the wire transfer to Phelps Dodge by ASARCO of
the required termination fee, (ii) the ASARCO Board has taken all necessary
action to render the Rights Agreement inapplicable to the transactions
contemplated by the Merger Agreement and (iii) the ASARCO Board approved and
adopted the Merger Agreement and the transactions contemplated thereby,
including, without limitation, for purposes of Article 10 of the ASARCO
Certificate of Incorporation and the New Jersey Business Corporation Act.
ASARCO has advised Parent and Purchaser that ASARCO has been advised by each
of its directors and executive officers that they either intend to tender all
shares of Common Stock beneficially owned by such persons pursuant to the Offer
or to vote such shares of Common Stock in favor of the approval and adoption by
the shareholders of the Merger Agreement and the transactions contemplated
thereby.
Credit Suisse First Boston Corporation, ASARCO's financial advisor, has
delivered to the ASARCO Board a written opinion dated October 23, 1999 to the
effect that, as of such date and based upon and subject to the matters stated in
its opinion, the $29.75 per share of Common Stock consideration to be received
by holders of shares of Common Stock is fair pursuant to the Offer and the
Merger, taken together, to such holders from a financial point of view.
This Supplement does not constitute a solicitation of proxies for any
meeting of ASARCO's shareholders. Any such solicitation by Parent or Purchaser
would be made only pursuant to separate proxy materials complying with the
requirements of the Exchange Act.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE MINIMUM CONDITION.
CERTAIN OTHER TERMS AND CONDITIONS TO THE CONSUMMATION OF THE OFFER ARE
DESCRIBED IN SECTION 7 OF THIS SUPPLEMENT.
On September 30, 1999, there were outstanding approximately 39,921,427
shares of Common Stock according to ASARCO and 1,799,699 Incentive Shares
subject to issuance. As of such date, 3,900,000 shares of Common Stock were
beneficially owned by the Purchaser and its affiliates. As a result, the Minimum
Condition would be satisfied if at least 28,817,136, plus 80% of any Incentive
Shares issued prior to the Expiration Date shares of Common Stock were validly
tendered and not withdrawn prior to the Expiration Date.
THIS SUPPLEMENT, THE OFFER TO PURCHASE AND THE RELATED REVISED (YELLOW)
LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH
2
<PAGE>
SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
1. AMENDED TERMS OF THE OFFER; EXPIRATION DATE. The discussion set forth
in Section 1 of the Offer to Purchase is hereby amended and supplemented as
follows:
A. Pursuant to the Merger Agreement, Purchaser has agreed to purchase all
outstanding shares of Common Stock at $29.75 per share, net to the seller in
cash, upon the terms and subject to the conditions of the Offer. All
shareholders whose shares of Common Stock are validly tendered and not withdrawn
and accepted for payment pursuant to the Offer (including shares of Common Stock
tendered and not withdrawn prior to the date of this Supplement) will receive
this increased Offer Price.
Pursuant to the Merger Agreement, ASARCO has represented that the ASARCO
Board has taken all necessary action to render the Rights Agreement inapplicable
to the transactions contemplated by the Merger Agreement (including without
limitation the Offer).
The Offer has been amended such that the Offer will expire at 12:00
Midnight, New York City time, on Tuesday, November 9, 1999, unless and until
Purchaser, subject to the provisions of the Merger Agreement, shall have
extended the period during which the Offer is open. The term "Expiration Date"
shall mean 12:00 Midnight, New York City time, on Tuesday, November 9, 1999 or
any later time and date at which the Offer, as so extended by Purchaser, shall
expire.
As of the close of business on October 25, 1999, approximately 9,084,968
shares of Common Stock had been tendered and not withdrawn pursuant to the
Offer. See Section 6 of this Supplement for a description of the provisions of
the Merger Agreement regarding extensions of the Offer by the Purchaser.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition and each of the other conditions described in Section 7 of
this Supplement.
B. The second paragraph on page 13 in the original Offer to Purchase under
"Section 1--Terms of the Offer; Expiration Date" is restated as follows:
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition. The Merger Agreement provides that Purchaser shall not amend
or waive the Minimum Condition and shall not decrease the Offer Price or
decrease the number of shares of Common Stock sought, or amend any other
condition of the Offer in any manner adverse to the holders of shares of Common
Stock (other than with respect to insignificant changes or amendments) without
the prior written consent of ASARCO (such consent to be authorized by the ASARCO
Board). The Merger Agreement further provides that, notwithstanding the
foregoing, Purchaser shall, and Parent agrees to cause Purchaser to, extend the
Offer at any time up to February 29, 2000 for one or more periods of not more
than 10 business days each, if at the Expiration Date of the Offer, or any
extension thereof, the Minimum Condition or any of the conditions to the Offer
set forth in clauses (a), (b) or (e) of clause B of Section 7 of this Supplement
are not satisfied or waived; PROVIDED, HOWEVER, if all of the conditions to the
Offer are satisfied or waived but the number of shares of Common Stock tendered
(together with the shares of Common Stock then owned by Parent and Purchaser)
constitutes 80% or more, but less than 90%, of the then outstanding number of
shares of Common Stock, Purchaser shall extend the Offer for an aggregate period
of not more than three business days beyond the Expiration Date. In addition,
the Merger Agreement provides that the Offer Price may be increased and the
Offer may be extended to the extent required by law in connection with such
increase in each case without the consent of ASARCO. In connection with any
extension of the Offer, Purchaser may, subject to the right of shareholders to
withdraw shares of Common Stock prior to the Expiration Date, retain the shares
of Common Stock that have been tendered during the period or periods for which
the Offer is extended.
3
<PAGE>
2. PRICE RANGE OF SHARES OF COMMON STOCK; DIVIDENDS. The discussion set
forth in Section 6 of the Offer to Purchase is hereby amended and supplemented
as follows:
As reported by the NYSE Composite Tape, the high and low sale prices per
share of Common Stock for the fourth quarter of 1999 (through October 25, 1999)
were $30 1/8 and $26 4/16, respectively. On October 22, 1999, the last full
trading day prior to Parent's announcement that it was amending the terms of the
Offer upon the terms set forth in this Supplement, the reported closing sale
price per share of Common Stock as reported by the NYSE Composite Tape was
$29 9/16. Shareholders are urged to obtain a current market quotation for the
Common Stock.
3. CERTAIN INFORMATION CONCERNING PURCHASER, PARENT AND CERTAIN
AFFILIATES. The discussion set forth in "Section 9--Certain Information
Concerning Purchaser, Parent and Certain Affiliates" of the Offer to Purchase
under the heading "Differences Between Mexican GAAP and U.S. GAAP" is hereby
amended and supplemented as follows:
A. The second paragraph under the subheading "Cash flow information" is
amended and restated as follows:
Statement of Financial Accounting Standard No. 95, "Statement of Cash Flows"
(SFAS No. 95), requires that the effects of inflation on cash flows be shown
separately.
B. The second paragraph under the subheading "Cost of pension plans and
other employee benefits" is amended and restated as follows:
Parent provides health care benefits for the retired and active
employees of Mexicana de Cananea, S.A. de C.V. ("Mexcananea") as well as
their family members through a subsidiary of Mexcananea (Hospital del
Ronquillo, S. de R.L. de C.V.). During 1995 Parent adopted SFAS 106,
"Employers' Accounting for Postretirement Benefits Other than Pensions".
Due to the fact that Parent in previous years had few employees that were
eligible for this benefit, the liability based on the actuarial
calculation was considered immaterial and therefore the related effect
was not included in the U.S. GAAP reconciliation. In 1998 Parent
terminated 600 union and 400 non-union employees, thus accelerating the
related postretiremcnt benefits for such employees and resulting in a
charge of Ps. 34,880 which was included in the U.S. GAAP reconciliation.
C. The fourth paragraph under the subheading "Property and equipment" is
amended and restated as follows:
In accordance with the fifth amendment to Bulletin B-10, the value of
machinery and equipment of foreign origin may be restated based on the
devaluation and inflation of the country of origin. Parent does not
utilize this option to restate the value of its property and equipment.
D. The second paragraph under the subheading "Financial Statement
translation for foreign subsidiaries" is amended and restated as follows:
Under U.S. GAAP, the translation of financial statements of
subsidiaries with operations in hyper inflationary economies should be
remeasured into the reporting currency. The process requires monetary
assets and liabilities to be remeasured at the year-end exchange rate,
while non-monetary assets and liabilities and income and expense accounts
are remeasured at the historical exchange rate. Resulting exchange
differences are included in income.
E. The paragraph under the subheading "Available for sale security" is
amended and restated as follows:
Available for sales security. Under Mexican GAAP, the investment in
ASARCO is included in cash and marketable securities in the amounts of
Ps. 614,802 and Ps. 665,672 as of December 31, 1998 and 1997,
respectively. Changes in the market value of the investment were recorded
as interest income (loss) in the statement of income and amounted to
271,650 and (5,565) for the
4
<PAGE>
years ended December 31, 1998 and 1997, respectively. Under U.S. GAAP and
in accordance with Statement of Financial Accounting Standard No. 115,
this investment should be classified as an "available for sale security"
and reported at fair value, with unrealized gains and losses excluded
from earnings and reported in other comprehensive income.
F. Reconciliation of Mexican GAAP to U.S. GAAP
Net income and stockholders' equity, adjusted to take into account the
significant differences between Mexican GAAP and U.S. GAAP except for the
comprehensive effects of price-level changes, are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------------- ----------------- ------------------
<S> <C> <C> <C>
NET INCOME:
Consolidated net income under Mexican GAAP....... Ps. 806,638 Ps. 2,921,045 Ps. 4,004,570
U.S. GAAP adjustments:
Deferred income tax asset (liability).......... (335,854) (378,325) (1,567,349)
Deferred employee profit sharing liability..... (450,515) (404,732) (219,286)
Amortization of capitalized exchange loss and
gain on monetary position.................... 4,769 4,769 4,769
Capitalized interest........................... 206,170 269,199 --
Amortization of negative goodwill.............. 583,029 689,983 598,319
Pension plan cost.............................. 2,037 445 772
Gain (loss) in permanent investment............ 271,650 (5,565) --
Postretirement plan costs...................... (34,880) -- --
Adoption of SOP 98-5........................... (222,321) (110,888) --
Gain on extinguishment of debt................. 82,787 -- --
Effects of inflation accounting on U.S. GAAP
adjustments and monetary gain on labor
liabilities.................................. 1,250,231 1,119,208 1,900,509
----------------- ----------------- ------------------
1,357,103 1,184,094 717,734
----------------- ----------------- ------------------
Consolidated net income under U.S. GAAP.......... Ps. 2,163,741 Ps. 4,105,139 Ps. 4,722,304
================= ================= ==================
</TABLE>
<TABLE>
<CAPTION>
1998 1997
------------------- -------------------
<S> <C> <C>
STOCKHOLDERS' EQUITY:
Stockholders' equity under Mexican GAAP................... Ps. 29,635,784 Ps. 29,642,490
U.S. GAAP adjustments:
Deferred income taxes..................................... (4,967,527) (5,523,988)
Deferred employee profit sharing.......................... (2,151,540) (2,058,836)
Capitalized exchange loss and gain on monetary position... (185,958) (190,727)
Capitalized interest...................................... 475,369 269,199
Accumulated pension plan cost............................. (1,066) 1,034
Postretirement plan costs................................. (34,880) --
Negative goodwill (previously amortized for Mexican GAAP
purposes)............................................... (3,513,541) (4,096,570)
Adoption of SOP 98-5...................................... (333,209) (110,888)
Gain on extinguishment of debt............................ 82,787 --
Investment in common stock of a parent company............ (1,303,637) (1,947,718)
------------------- -------------------
(11,933,202) (13,658,494)
------------------- -------------------
Stockholders' equity under U.S. GAAP........................ Ps. 17,702,582 Ps. 15,983,996
=================== ===================
</TABLE>
5
<PAGE>
4. SOURCE AND AMOUNT OF FUNDS. The discussion set forth in
"Section 10--Source and Amount of Funds" of the Offer to Purchase is hereby
amended and supplemented as follows:
Purchaser estimates that the total amount of funds now required to purchase
Common Stock pursuant to the Offer (as described in this Supplement) and to pay
all related costs and expenses will be approximately $1,157 million.
On October 22, 1999, the commitment letter, dated as of September 24, 1999
(the "Commitment Letter"), and as amended and restated on October 5, 1999 (the
"First Amended and Restated Commitment Letter"), October 7, 1999 (the "Second
Amended and Restated Commitment Letter") and October 15, 1999 (the "Third
Amended and Restated Commitment Letter"), by and among Parent, The Chase
Manhattan Bank and Chase Securities Inc. (collectively, "Chase"), was further
amended and restated (the "Fourth Amended and Restated Commitment Letter"), to
provide that the condition relating to market disruptions is in effect until
December 18, 1999 and to require that a satisfactory merger agreement be entered
into with ASARCO no later than 5:00 P.M. New York City time on October 25, 1999.
The parties entered into the Merger Agreement prior to that time.
The foregoing description of the Credit Facilities is qualified in its
entirety by reference to the full text of the Fourth Amended and Restated
Commitment Letter, a copy of which is filed as Exhibit (b)(5) to the
Schedule 14D-1 and incorporated herein by reference.
5. BACKGROUND OF THE OFFER; CONTACTS WITH ASARCO. The discussion set forth
in Section 11 of the Offer to Purchase is hereby amended and supplemented as
follows:
On October 8, 1999, Parent filed Amendment No. 1 to its Schedule 14D-1,
reflecting the fact that Parent had revised the Offer to, among other things,
increase the Offer Price from $26.00 per share of Common Stock to $29.50 per
share of Common Stock. Also on October 8, 1999, ASARCO filed an amendment to the
ASARCO Schedule 14D-9 that contained and discussed the PD Merger Agreement and
stated that ASARCO was considering Parent's revised bid.
Later on October 8, 1999, Phelps Dodge issued a press release stating that
Phelps Dodge would not raise its offer for ASARCO.
ASARCO issued a press release on October 8, 1999, announcing that the ASARCO
Board met to consider Parent's revised Offer. The press release stated that at
the meeting, the ASARCO Board considered, together with advice from its
financial and legal advisors, the terms of Parent's revised Offer, ASARCO's
rights and obligations under the PD Merger Agreement and its fiduciary duties to
shareholders of ASARCO under applicable law. The press release stated that, in
accordance therewith, the ASARCO Board had determined in good faith, after
consultation with its legal and financial advisors, that it was necessary in
order to comply with its fiduciary duties under applicable law to recommend to
the ASARCO shareholders that they not tender their shares pursuant to the Phelps
Dodge Offer, and if necessary ASARCO would furnish information to Parent
pursuant to a customary confidentiality agreement and participate in discussions
or negotiations regarding the Offer, as revised.
Later that day, ASARCO filed another amendment to its Schedule 14D-9 with
respect to the Offer reflecting this change. According to the amendment, the
ASARCO Board notified Phelps Dodge in accordance with the terms of the PD Merger
Agreement of its intention to take these actions.
On the evening of Friday, October 8, 1999, Parent's legal advisors delivered
to ASARCO Parent's proposed revisions to the agreement relating to the Proposed
Merger (the "Proposed Merger Agreement"), which revisions set forth the basis
upon which Parent was prepared to consummate the Proposed Merger. Over the
course of the next few days, Parent's and ASARCO's respective financial and
legal advisors conducted negotiations relating to the Proposed Merger Agreement.
ASARCO issued a press release on October 11, 1999 stating that on
October 12, 1999, the ASARCO Board would meet to discuss Parent's latest offer.
6
<PAGE>
On October 13, 1999, Phelps Dodge issued a press release reiterating its
previous decision not to raise its offer for ASARCO.
On Thursday, October 14, 1999, Parent notified ASARCO that it would be
willing to increase its tender offer price to $29.75 per share of Common Stock
in cash subject to Parent entering into the Proposed Merger Agreement with
ASARCO prior to 5:00 P.M. New York City time on October 23, 1999. In connection
therewith, Parent submitted a revised bid package to ASARCO detailing its
willingness to increase the Offer Price to $29.75 per share of Common Stock in
the event ASARCO were to agree to increase the termination fee indicated in the
Proposed Merger Agreement to $40 million and to deliver notice to Phelps Dodge
that it is prepared to execute the Proposed Merger Agreement with Parent. The
letter stated that the revised Offer would remain outstanding until 5:00 P.M. on
October 23, 1999. The bid package included Parent's proposed revisions to the
Proposed Merger Agreement, which incorporated comments made during negotiations
that transpired earlier in the week between the respective legal and financial
advisors of ASARCO and Parent.
On October 15, 1999, ASARCO issued a press release stating that earlier that
day, the ASARCO Board had met to consider Parent's revised proposal. According
to the press release, at the meeting, the ASARCO Board authorized ASARCO's
management to provide notice to Phelps Dodge that ASARCO was prepared to accept
the revised Offer and that ASARCO intended to terminate the PD Merger Agreement.
Later that day, ASARCO filed an amendment to its Schedule 14D-9 relating to the
Offer reflecting these occurrences.
According to Amendment No. 3 to ASARCO's Schedule 14D-9 with respect to the
Offer, on October 23, 1999, the ASARCO Board met to consider and approve the
Merger Agreement.
According to Amendment No. 3 to ASARCO's Schedule 14D-9 with respect to the
Offer, on October 25, 1999, ASARCO delivered to Phelps Dodge notice that it was
terminating the PD Merger Agreement in accordance with the terms thereof and
thereafter sent by wire transfer of immediately available funds $30 million to
Phelps Dodge as payment of the termination fee as required by the PD Merger
Agreement.
Later in the morning on October 25, 1999, ASARCO, Parent and Purchaser
executed the Merger Agreement, a copy of which is filed as Exhibit (c)(1) to the
Schedule 14D-1 and incorporated herein by reference. See also Section 6 of this
Supplement. Thereafter, ASARCO issued a press release disclosing the execution
of the Merger Agreement and the termination of the PD Merger Agreement.
Also, on October 25, 1999 Parent issued the following press release:
GRUPO MEXICO AND ASARCO SIGN MERGER AGREEMENT
COMBINATION WILL CREATE LEADING INTERNATIONAL MINING COMPANY
MEXICO CITY, October 25, 1999--Grupo Mexico, S.A. de C.V. today
announced that it has signed a definitive merger agreement with ASARCO
Incorporated (NYSE:AR) under which Grupo Mexico will acquire ASARCO for
$29.75 in cash net per share of ASARCO common stock. Including the
assumption of $1.02 billion ASARCO debt, the transaction has a total value
of approximately $2.25 billion.
German Larrea, chairman and chief executive officer of Grupo Mexico,
said, "A combination of Grupo Mexico and ASARCO will create a world-class
international mining company with high-quality assets and an enhanced
competitive position. Our operations are extremely complementary, and we
look forward to working with ASARCO to integrate them seamlessly."
In addition, Grupo Mexico also announced today that, in addition to
increasing the offer price to $29.75 per share, it is extending the
expiration date on its outstanding tender offer until Tuesday, November 9,
1999, at 12:00 midnight New York City time. The tender offer previously had
been
7
<PAGE>
scheduled to expire on Monday, October 25, 1999, at 12:00 midnight New York
City time. As of 5:00 P.M. New York City time on October 22, 1999, 2,684,820
shares of Common Stock had been tendered to Purchaser under the terms of the
Offer.
Grupo Mexico will promptly be filing with the Securities and Exchange
Commission and distributing to ASARCO shareholders a supplement to its Offer
to Purchase reflecting the increase in the tender offer price to $29.75 and
setting forth the material terms of the transaction.
Chase Securities Inc. served as financial advisor to Grupo Mexico and is
arranging the financing for the transaction. Brown & Wood LLP and
Santamarina y Steta served as legal advisors to Grupo Mexico.
Grupo Mexico is a diversified mining company that ranks among the
world's largest and lowest-cost copper, zinc and silver producers. The
company's operations include mining, smelting and refining. Grupo Mexico
also owns 74% and operates in partnership with Union Pacific (26%) the
largest and most profitable railroad system in Mexico.
NOTE: Statements in this press release include "forward looking
statements" that express expectations of future events or results. All
statements based on future expectations rather than on historical facts are
forward-looking statements that involve a number of risks and uncertainties,
and the company cannot give assurance that such statements will prove to be
correct.
Also on October 25, 1999, Phelps Dodge issued a press release stating that
it was allowing the Phelps Dodge Exchange Offer to expire.
Subsequently on October 25, 1999, Parent and Purchaser filed Amendment
No. 3 to the Schedule 14D-1 reflecting these disclosures.
Also on October 25, 1999, ASARCO filed Amendment No. 3 to its
Schedule 14D-9 relating to the Offer which amendment, among other things,
recommended that ASARCO shareholders tender their shares of Common Stock to
Purchaser in accordance with the terms of the Offer.
6. THE MERGER AGREEMENT.
The following is a summary of the Merger Agreement, a copy of which is
attached as Exhibit (c)(1) to the Schedule 14D-1 filed with the SEC with respect
to the Offer and incorporated herein by reference. Such summary is qualified in
its entirety by reference to the full text of the Merger Agreement. The
capitalized terms used but not otherwise defined in this Section 6 shall have
the meanings set forth in the Merger Agreement.
THE AMENDED OFFER. Pursuant to the Merger Agreement, Purchaser has agreed
to amend the Offer (i) to reflect the existence of the Merger Agreement and
(ii) to amend the conditions to the Offer as set forth in their entirety in
Section 7 of this Supplement.
Purchaser has also agreed that it will not, without the prior written
consent of ASARCO, amend or waive the Minimum Condition, decrease the Offer
Price, decrease the number of shares of Common Stock sought in the Offer, or
amend any other condition of the Offer in any manner adverse to the holders of
shares of Common Stock or (other than with respect to insignificant changes or
amendments) without the prior written consent of ASARCO.
Purchaser also agreed that, notwithstanding the preceding paragraph, it
will, and Parent agreed to cause Purchaser to, extend the Offer at any time up
to February 29, 2000 for one or more periods of not more than 10 business days
each if at the Expiration Date or any extension thereof, the Minimum Condition
or any of the conditions to the Offer set forth in clauses (a), PROVIDED,
HOWEVER, if all of the conditions to the Offer are satisfied or waived but the
number of shares of Common Stock tendered, when taken together with shares of
Common Stock owned by Parent and Purchaser, represent at least 80% but less than
90% of the then outstanding shares of Common Stock, Purchaser shall extend the
Offer for an
8
<PAGE>
aggregate period of not more than three business days. In addition, ASARCO's
consent is not required to increase the Offer price or extend the Offer to the
extent required by law in connection therewith.
CERTAIN ASARCO ACTIONS. Pursuant to the Merger Agreement, ASARCO has
consented to the Offer and represented and warranted, among other things, that
(i) the ASARCO Board unanimously (a) determined that the Merger Agreement and
the transactions contemplated thereby, including each of the Offer and the
Merger, are fair to and in the best interests of the holders of Common Stock,
(b) approved and adopted the Merger Agreement and the transactions contemplated
thereby, including without limitation for purposes of Article 10 of the ASARCO
Certificate of Incorporation and the New Jersey Business Corporation Act and
(c) recommended acceptance of the Offer and adoption and approval of the Merger
Agreement and the transactions contemplated thereby by the shareholders of
ASARCO; (ii) Credit Suisse First Boston Corporation has delivered to the ASARCO
Board its written opinion dated October 23, 1999, to the effect that as of such
date and based upon and subject to the matters stated therein, the consideration
to be received by the holders of Common Stock pursuant to the Offer and the
Merger, taken together, is fair to the holders of Common Stock from a financial
point of view; and (iii) the PD Merger Agreement has been terminated pursuant to
the Notice of Termination, dated October 25, 1999, delivered by ASARCO to Phelps
Dodge, which Notice of Termination was accompanied by the wire transfer to
Phelps Dodge by ASARCO of the termination fee required under the PD Merger
Agreement.
ASARCO also has agreed that it shall file with the SEC an amendment to its
Schedule 14D-9 with respect to the Offer (together with any amendments or
supplements thereto, the "Amended Schedule 14D-9") which amendment shall
include, subject to the fiduciary duties of ASARCO's directors under applicable
law determined after consultation with outside legal counsel and to the
provisions of the Merger Agreement, the recommendation described in clause (i)
of the preceding paragraph.
Pursuant to the Merger Agreement, promptly upon the purchase of and payment
for any shares of Common Stock by Parent or its subsidiaries which, when taken
together with shares of Common Stock owned by Parent and Purchaser, represent at
least 80% of the then outstanding shares of Common Stock, Parent shall be
entitled to designate such number of directors on the ASARCO Board, rounded up
to the next whole number, as is equal to the product of (x) the total number of
directors on the ASARCO Board multiplied by (y) the percentage of the aggregate
number of shares of Common Stock beneficially owned by Purchaser, Parent and any
other wholly-owned subsidiary of Parent; PROVIDED, HOWEVER, that until the
Effective Time, there shall be at least two directors who were directors of
ASARCO as of the date of the Merger Agreement. ASARCO shall, upon request by
Purchaser, use all reasonable efforts promptly either to increase the size of
the ASARCO Board or, at ASARCO's election, secure the resignations of such
number of directors as is necessary to enable Parent's designees to be elected
to the ASARCO Board and shall cause Parent's designees to be so elected.
Following the election or appointment of Parent's designees and prior to the
Effective Time, the affirmative vote of a majority of the then serving directors
of ASARCO who were directors as of the date of the Merger Agreement shall be
required to amend or terminate the Merger Agreement, extend the time for
performance of any of the obligations of Parent or Purchaser, waive any
condition or any of ASARCO's rights under the Merger Agreement or take other
action under the Merger Agreement.
THE MERGER. The Merger Agreement provides that in accordance with the
provisions thereof, at the Effective Time, Purchaser will be merged with and
into ASARCO, and ASARCO will be the surviving corporation in the Merger
(hereinafter sometimes called the "Surviving Corporation") and will continue to
be governed by the laws of the State of New Jersey. At the Effective Time, the
separate corporate existence of Purchaser shall cease.
Pursuant to the Merger Agreement, at the Effective Time, by virtue of the
Merger and without any action on the part of Parent, Purchaser, ASARCO or the
holders of the shares of Common Stock or the shares of the capital stock of
Purchaser, each share of Common Stock issued and outstanding immediately prior
to the Effective Time (other than any shares of Common Stock held in the
treasury of ASARCO or
9
<PAGE>
by any wholly owned subsidiary of ASARCO or owned by Parent, Purchaser or any
subsidiary of Parent) shall be converted into the right to receive $29.75 in
cash, without interest.
Prior to the Effective Time, Parent will enter into an agreement with
Citibank N.A. (the "Exchange Agent"), authorizing such Exchange Agent to act as
Exchange Agent in connection with the Merger. Immediately prior to the Effective
Time, Parent shall deposit or shall cause to be deposited with or for the
account of the Exchange Agent, for the benefit of the holders of shares of
Common Stock (other than shares to be canceled pursuant to the Merger
Agreement), an amount in cash equal to the Offer Price payable to the holder
thereof, without interest (the "Merger Consideration") payable pursuant to the
Merger Agreement (such cash funds are hereafter referred to as the "Exchange
Fund"). As soon as reasonably practicable after the Effective Time, Parent will
cause a letter to be sent to each person who was a holder of Common Stock at the
Effective Time. The letter will contain instructions on how to surrender ASARCO
stock certificates to the Exchange Agent and receive the Merger Consideration.
At the Effective Time, by virtue of the Merger and without any action on the
part of Parent, Purchaser, ASARCO or the holders of the shares of Common Stock
or the shares of the capital stock of Purchaser, each share of common stock, par
value $.01 per share, of the Purchaser outstanding immediately prior to the
Effective Time shall be converted into one share of common stock of the
Surviving Corporation and shall constitute the only outstanding shares of stock
of the Surviving Corporation.
Under the Merger Agreement, each employee option or right to purchase or
acquire shares of Common Stock and each stock appreciation right, and each award
under an ASARCO employee plan or non-employee director plan denominated in or
the value of which is determined by reference to common stock which are
outstanding immediately prior to the Effective Time, shall, in accordance with
their terms, become immediately exercisable and such holder shall be paid by the
Surviving Corporation an amount in cash determined by (A) subtracting the
exercise price per share of such award from the greater of (i) $29.75 and
(ii) the highest sales price per share of Common Stock during the 60-day period
preceding the earlier of the Expiration Date or the Effective Time, and
(B) multiplying the difference by the number of shares of Common Stock that
would have been issuable upon the exercise of such award or, if the ASARCO
Equity Award does not have an exercise price, an amount in cash determined by
multiplying (x) the greater of (iii) $29.75 and (iv) the highest sales price per
share of Common Stock during the 60-day period preceding the earlier of the
Expiration Date or the Effective Time by (y) the number of shares of Common
Stock that would have been issuable upon the exercise of such award. Any ASARCO
Equity Awards issued pursuant to the ASARCO 1996 Stock Incentive Plan and the
ASARCO Stock Incentive Plan that are exercisable at prices equal to or greater
than $29.75 per share will operate solely as stock appreciation rights with
respect to the common stock of Parent.
The Merger Agreement provides that the certificate of incorporation of the
Surviving Corporation shall be the ASARCO Certificate of Incorporation of
immediately prior to the Effective Time and the name of the Surviving
Corporation shall continue to be ASARCO Incorporated until thereafter amended.
Under the Merger Agreement, the bylaws of Purchaser immediately prior to the
Effective Time shall be the bylaws of the Surviving Corporation until thereafter
amended.
The Merger Agreement provides that, until their respective successors are
duly elected or appointed and qualified, the directors of Purchaser at the
Effective Time shall be the directors of the Surviving Corporation and the
officers of ASARCO at the Effective Time shall be the officers of the Surviving
Corporation.
AGREEMENTS OF ASARCO, PARENT AND PURCHASER. ASARCO shall in accordance with
applicable law and ASARCO Certificate of Incorporation and the ASARCO By-Laws:
(i) duly call, give notice of, convene and, if required by applicable law to
consummate the Merger, hold (the "ASARCO Shareholders Meeting") subject to the
approval of the SEC, to the extent practicable and permitted by applicable law
(including the requisite mailing period for the proxy statement as required
under the Exchange Act and the rules and regulations promulgated thereunder) on
or prior to December 8, 1999, or as soon thereafter
10
<PAGE>
as practicable and as permitted under applicable law for the purpose of
considering and taking action upon the Merger Agreement; PROVIDED, that if the
Offer is consummated prior to the date of the ASARCO Shareholders Meeting,
ASARCO shall use its reasonable best efforts to cause the record date for
determination of shareholders entitled to vote at the ASARCO Shareholders
Meeting to be on or after the date of the consummation of the Offer,
(ii) prepare and use all reasonable efforts to file with the SEC a preliminary
proxy or information statement relating to the Merger and the Merger Agreement
within seven business days after the date of the Merger Agreement, obtain and
furnish the information required to be included by the SEC in the proxy
statement, respond promptly to comments made by the SEC (after consultation with
Parent), cause a definitive proxy or information statement to be mailed to
shareholders, and obtain the necessary approvals of the Merger and the Merger
Agreement by its shareholders, (iii) promptly notify the other parties and
promptly file an appropriate amendment or supplement with the SEC and, to the
extent required by law, disseminate such amendment or supplement to shareholders
when at anytime prior to the Effective Time, ASARCO or Parent discover any
information relating to ASARCO or Parent, or any of their respective affiliates,
officers or directors which should be set forth in an amendment or supplement to
the proxy statement, so that the proxy statement would not include any
misleading statements, and (iv) subject to the fiduciary obligations of the
ASARCO Board, recommend, through the ASARCO Board, to its shareholders that they
vote in favor of the approval of the Merger and the approval and adoption of the
Merger Agreement, and use its best reasonable efforts to procure the approval of
the shareholders of ASARCO for the Merger required by applicable law. The Merger
Agreement provides that Parent shall vote or cause to be voted all shares of
Common Stock then owned of record by Parent, Purchaser or any of Parent's
subsidiaries and affiliates in favor of the approval of the Merger and the
approval and adoption of the Merger Agreement.
Notwithstanding the preceding paragraph or any other provision of the Merger
Agreement, the Merger Agreement provides that in the event that Parent,
Purchaser or any other subsidiary of Parent together shall have acquired at
least 90% of the outstanding shares of Common Stock, the parties to the Merger
Agreement shall take all necessary and appropriate action to cause the Merger to
become effective as soon as practicable after such acquisition without an ASARCO
Shareholders Meeting in accordance with New Jersey and Delaware law.
In the Merger Agreement, ASARCO has covenanted and agreed that, except for
certain exceptions, during the period from the date of the Merger Agreement to
the Effective Time, among other things, (A) each of ASARCO and its subsidiaries
shall conduct its operations in the ordinary course in substantially the same
manner as conducted prior to October 25, 1999, (B) ASARCO shall, and cause each
of its subsidiaries to, use its reasonable best efforts to preserve intact its
business organizations and goodwill, keep available the services of its current
officers and other key employees and preserve its relationships with customers,
suppliers, employees and business partners with which it has business relations,
(C) ASARCO shall confer with Parent, at such times as Parent may reasonably
request, to report material operational matters and the general status of
ongoing operations, (D) ASARCO shall notify Parent of any emergency or other
change in the normal course of its or its subsidiaries' respective businesses or
in the operation of its or its subsidiaries, respective properties and of any
complaints or hearings of any governmental entity if such emergency, change,
complaint, investigation or hearing would have a Material Adverse Effect on
ASARCO, and (E) neither ASARCO nor any of its subsidiaries will (i) propose or
adopt any amendments to its certificate of incorporation or bylaws or other
governing documents, (ii) split, combine or reclassify any shares of capital
stock of ASARCO or any of its subsidiaries, (iii) declare, set aside or pay any
dividend on or make any distribution with respect to its capital stock, except
in the case of ASARCO and its majority owned subsidiary Southern Peru Copper
Corporation for regular quarterly cash dividends and except for cash dividends
by a wholly owned subsidiary to a parent, (iv) purchase or redeem any shares of
its stock or any rights, warrants or options to acquire any such shares, other
than in the ordinary or in connection with employee benefits, (v) incur, assume
or prepay indebtedness (other than between itself and its wholly owned
subsidiaries or between such subsidiaries) other than in the ordinary course of
business consistent with past practice, (vi) except in the ordinary course of
business consistent
11
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with past practice or as otherwise provided in the Merger Agreement, adopt or
amend any employee benefit plan, (vii) authorize or propose, or enter into an
agreement with respect to, any merger, consolidation or business combination
(other than the Merger), any acquisition or disposition of a material amount of
assets or securities or any release or relinquishment of any material contract
rights, in each case not in the ordinary course of business, (viii) issue or
sell or agree to issue or sell any shares of capital stock of ASARCO or any of
its subsidiaries (other than existing rights to Incentive Shares), (ix) sell,
lease, license, mortgage or otherwise encumber or subject to any lien or
otherwise dispose of any of its properties or assets (including
securitizations), other than in the ordinary course of business or consummation
of contracts of sale executed and delivered prior to the date of the Merger
Agreement, or (x) make any material tax election or settle or compromise any
material tax liability, other than in the ordinary course of business consistent
with past practice.
NO SOLICITATION. Pursuant to the Merger Agreement, none of ASARCO, its
subsidiaries or any of its directors, officers or employees or any investment
banker, financial advisor, attorney, accountant or other representative shall
(i) solicit, initiate or encourage (including by way of furnishing information),
or take any other action designed to facilitate, any inquiries or the making of
any proposal which constitutes any ASARCO Takeover Proposal (or reasonably could
be expected to lead to an ASARCO Takeover Proposal) or (ii) participate in any
discussions or negotiations regarding any ASARCO Takeover Proposal. As defined
in the Merger Agreement, the term "ASARCO Takeover Proposal" means any inquiry,
proposal or offer (or any improvement, restatement, amendment, renewal or
reiteration thereof) from any person relating to any direct or indirect
acquisition or purchase of a business or shares of any class of equity
securities of ASARCO or any of its subsidiaries, any tender offer or exchange
offer that if consummated would result in any person beneficially owning any
class of equity securities of ASARCO or any of its subsidiaries, or any merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving ASARCO or any of its subsidiaries, other than
contemplated by the Merger Agreement.
Notwithstanding anything to the contrary contained in the previous
paragraph, the Merger Agreement provides that prior to the Effective Time,
ASARCO may, in response to an ASARCO Takeover Proposal which was not solicited
by it or which did not otherwise result from a breach of the Merger Agreement,
and subject to providing prior written notice of its decision to take such
action to Parent (x) furnish information with respect to ASARCO and its
subsidiaries to any person making an ASARCO Takeover Proposal pursuant to a
customary confidentiality agreement (as determined by ASARCO after consultation
with its outside counsel) and (y) participate in discussions or negotiations
regarding such ASARCO Takeover Proposal. However, it may furnish such
information and/or participate in such discussions or negotiations only if prior
thereto, the ASARCO Board determines in good faith, (A) after consultation with
and based upon the advice of a nationally recognized investment banking firm,
that such ASARCO Takeover Proposal represents a financially superior transaction
for the shareholders of ASARCO when compared to the Merger, (B) that such ASARCO
Takeover Proposal can be consummated in a reasonably timely manner and that
financing is committed or is reasonably likely to be obtained, (C) that the
approval and adoption of the Merger Agreement by holders of Common Stock may not
be obtained due to such pending ASARCO Takeover Proposal and (D) after
consultation with its outside counsel, that failure to do so would be
inconsistent with its fiduciary duties to ASARCO shareholders under applicable
law.
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In addition, pursuant to the Merger Agreement, except as set forth below,
neither the ASARCO Board nor any committee thereof shall (i) withdraw or modify,
or propose publicly to withdraw or modify, in a manner adverse to Parent or
Purchaser, the recommendation by the ASARCO Board or such committee of the
Offer, the Merger or the Merger Agreement, (ii) approve or recommend, or propose
publicly to approve or recommend, any ASARCO Takeover Proposal, or (iii) cause
ASARCO to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement (each, an "ASARCO Acquisition Agreement")
related to any ASARCO Takeover Proposal. Notwithstanding the foregoing, in the
event that the ASARCO Board receives an ASARCO Takeover Proposal and the ASARCO
Board determines in good faith, after consultation with outside counsel, that
failure to do so would be inconsistent with its fiduciary duties to ASARCO
shareholders under applicable law, the ASARCO Board may (x) take any of the
actions described in clauses (i), (ii) or (iii) above or (y) terminate the
Merger Agreement (and concurrently with or after such termination, if it so
chooses, cause ASARCO to enter into any ASARCO Acquisition Agreement with
respect to any ASARCO Takeover Proposal) but only after the fifth business day
following Parent's receipt of written notice advising Parent that the ASARCO
Board is prepared to accept an ASARCO Takeover Proposal, and attaching the most
current version of any such ASARCO Takeover Proposal or any draft of an ASARCO
Acquisition Agreement.
The Merger Agreement further provides that ASARCO shall immediately advise
Parent orally and in writing of any request for information or of any ASARCO
Takeover Proposal, the material terms and conditions of such request or ASARCO
Takeover Proposal, and the identity of the person making such request or ASARCO
Takeover Proposal and keep Parent reasonably informed of the status and details
(including amendments or proposed amendments) of any such request or ASARCO
Takeover Proposal.
INSPECTION RIGHTS. Pursuant to the Merger Agreement, ASARCO has agreed to
afford to Parent and to Parent's officers, employees, counsel, accountants and
other authorized representatives full and complete access on reasonable prior
notice to its and its subsidiaries' properties, contracts, commitments, books
and records and, during such period, will furnish promptly all information
concerning its businesses and properties as may be reasonably requested.
ANNOUNCEMENTS. Under the Merger Agreement, before issuing any press release
or otherwise making any public announcements with respect to the Merger and the
transactions contemplated by the Merger Agreement (except as may be required by
law or by obligations pursuant to any listing agreement with any national
securities exchange in the United States or Mexico), Parent and ASARCO will
consult with each other and provide reasonable opportunity to review and comment
on such release or announcement.
INDEMNITY; INSURANCE; RELEASE OF CLAIMS. Under the Merger Agreement, for a
period of six years after the Effective Time, Parent shall indemnify the current
and former officers and directors of ASARCO to the extent such indemnity
currently exists in the ASARCO Certificate of Incorporation, the ASARCO By-Laws
or in any agreement.
Pursuant to the Merger Agreement, for a period of three years after the
Effective Time, Parent has agreed that it shall maintain ASARCO's existing
directors' and officers' liability insurance policy; PROVIDED, however, that
Parent is not obligated to make annual premium payments for such insurance to
the extent such premiums exceed 150% of the annual premiums paid as of the date
of the Merger Agreement by ASARCO for such insurance; PROVIDED, HOWEVER, that if
the annual premiums of such insurance coverage exceed such amount, Parent shall
be obligated to obtain a policy with the greatest coverage available for a cost
not exceeding such amount; and PROVIDED, FURTHER, that Parent may meet these
obligations by covering the above people under Parent's insurance policy or
policies on the terms described above.
Parent and Purchaser have fully and unconditionally released each of the
members of the Board of Directors of ASARCO and each officer and employee of
ASARCO from any and all claims, actions, causes of action, lawsuits, damages,
liabilities, costs, losses, expenses, assessments, sums of money, promises and
demands of any nature whatsoever that Parent and Purchaser may have against such
officer, director and employee of ASARCO (i) which are related to or arise out
of (A) action taken or omitted to be taken (including any untrue statements made
or any statements omitted to be made) in connection with or in
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anticipation of the Transactions (as defined below) or (B) actions taken or
omitted to be taken by Parent, Purchaser or any of their affiliates in
connection with the Transactions, (ii) which are otherwise related to or arise
out of the Transactions or (iii) by reason of the fact that such person is or
was a member of the Board of Directors of ASARCO or an officer or employee of
ASARCO, as the case may be. For purposes of the Merger Agreement the
"Transactions" means the transactions contemplated by the Cyprus Amax Agreement,
the transactions contemplated by the PD Merger Agreement and the transactions
contemplated by the Merger Agreement, or any of them.
BENEFITS. Pursuant to the Merger Agreement, Parent and its subsidiaries
have agreed, for a period of six months from the Effective Time, to continue to
maintain ASARCO's employee benefit plans.
Parent has agreed to cause the Surviving Corporation, its subsidiaries and
Parent's affiliates to (a) waive any limitation regarding pre-existing condition
and eligibility waiting period under any ASARCO employee benefit plan or any
plan in which ASARCO employees participate after the Effective Time;
(b) provide each employee of ASARCO with credit for any co-payments or
deductibles paid prior to the Effective Time for the calendar year in which the
Effective Time occurs 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, and (c) treat all service by employees
of ASARCO or any of its subsidiaries or affiliates before the Effective Time as
service with Parent and its subsidiaries and affiliates with respect to all
employee plans and policies.
At the consummation of the Offer, Parent shall guarantee the performance of
employment contracts and benefit plans in accordance with their terms.
With respect to ASARCO's employee benefits plans, each of ASARCO, Parent and
Purchaser have agreed that the transactions contemplated by the Merger Agreement
constitute a "change of control" for the purposes of ASARCO Employee Benefit
Plans.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains certain
representations and warranties by ASARCO, including representations and
warranties concerning: the due organization, valid existence, good standing and
due qualification of ASARCO and its significant subsidiaries; the capital
structure of ASARCO; the corporate authority of ASARCO relative to the
execution, delivery and performance of and consummation of the transactions
contemplated by the Merger Agreement; the absence of any violations of the
governing documents and instruments or obligations of ASARCO or its subsidiaries
or of any statute, rule, regulation, order or decree, subject to certain
exceptions; the accuracy and timeliness of reports and documents filed by ASARCO
with the SEC; certain environmental matters; employee benefit plans; the
accuracy of the Schedule 14D-9, Proxy Statement (with respect to information
included therein relating to ASARCO or its subsidiaries), Schedule 14D-1 (with
respect to information included therein relating to ASARCO or its subsidiaries)
and any amendments thereto; the inapplicability of the Rights Agreement to the
transactions contemplated by the Merger Agreement; certain tax matters; the vote
required to approve the Merger Agreement; the receipt of an opinion of a
financial advisor by the ASARCO Board; and the absence, since December 31, 1998
to the date of the Merger Agreement, of, among other things, any event,
occurrence or development which would have a Material Adverse Effect on ASARCO,
individually or in the aggregate; absence of undisclosed material liabilities;
and labor relations.
The Merger Agreement also contains certain representations and warranties by
Parent and Purchaser, including that Purchaser has available sufficient funds to
consummate the Offer and the Merger and the transactions contemplated thereby.
CONDITIONS TO THE MERGER. The conditions to the Offer are set forth in
"Section 7--Certain Conditions to the Offer" of this Supplement. ASARCO's,
Parent's and Purchaser's obligations to effectuate the Merger are subject to the
fulfillment at or prior to the Effective Time of the following conditions:
(a) if ASARCO Shareholder Approval is required by applicable law, such
approval shall have been obtained in accordance with applicable law.
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(b) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
governmental body or authority which prohibits the consummation of the
Merger substantially on the terms contemplated by the Merger Agreement. In
the event any order, decree or injunction shall have been issued, each party
shall use its reasonable efforts to remove any such order, decree or
injunction.
(c) unless the consummation of the Offer shall not have occurred prior
to the date of the ASARCO Shareholders Meeting, Purchaser shall have
accepted for purchase all shares of Common Stock validly tendered and not
withdrawn pursuant to the Offer; PROVIDED, HOWEVER, that Purchaser shall not
be entitled to rely on the condition above if Purchaser shall have failed to
purchase shares of Common Stock pursuant to the Offer in breach of
Purchaser's obligations under the Merger Agreement.
(d) In the event the consummation of the Offer has not occurred prior to
the ASARCO Shareholders Meeting, the obligation to effect the Merger is
further subject to the conditions set forth in clause B of Section 7 of this
Supplement, relating to the accuracy of the representations and warranties
as of the date of consummation of the Offer, and ASARCO shall have delivered
to Parent a certificate, dated the Effective Time and signed by its Chief
Executive Officer and its President, to the effect that such conditions have
been satisfied.
(e) In the event the consummation of the Offer shall not have occurred
prior to the ASARCO Shareholders Meeting, (i) The Chase Manhattan Bank and
Chase Securities Inc. shall not have terminated the commitment letter as a
result of there having occurred after October 25, 1999 to December 18, 1999,
a general banking moratorium established by Federal or state authorities, a
generally recognized capital markets crisis, as evidenced by a cumulative
20% decline in the Dow Jones Industrial Average over a period of five
consecutive trading days, a virtual cessation in bank and other private debt
financings or the introduction of additional material government
restrictions imposed upon lending institutions which materially affect the
type of transactions contemplated by the Merger Agreement, and (ii) The
Chase Manhattan Bank and Chase Securities Inc. shall not have terminated the
commitment letter as a result of there having occurred after December 18,
1999, a material disruption of or material adverse change in U.S. or
developed country financial, banking or capital market conditions that is
reasonably likely to materially impair the syndication of the Credit
Facilities.
TERMINATION. The Merger Agreement may be terminated at any time prior to the
Effective Time (notwithstanding any approval of the Merger Agreement by the
shareholders of ASARCO):
(a) by mutual written consent of ASARCO and Parent;
(b) by either ASARCO or Parent, if (i) the Offer shall have expired
without any shares of Common Stock being purchased pursuant thereto or
(ii) the Merger (in the event the ASARCO Shareholders Meeting occurs prior
to the expiration or termination of the Offer) or the Offer has not been
consummated on or before February 29, 2000; PROVIDED, that the party seeking
to terminate the Merger Agreement pursuant to this clause shall not have
breached in any material respect its obligations under the Merger Agreement
in any manner that shall have proximately contributed to the failure of
shares of Common Stock to have been purchased on or before such date;
(c) by Parent, if, prior to the Merger (in the event the ASARCO
Shareholders Meeting occurs prior to the expiration or termination of the
Offer) or the purchase of any shares of Common Stock pursuant to the Offer,
ASARCO shall have breached the provisions of the Merger Agreement relating
to prohibited solicitation of competing bids (the "No Solicitation
Provisions");
(d) by ASARCO, in accordance with the No Solicitation Provisions of the
Merger Agreement, prior to the Merger (in the event the ASARCO Shareholders
Meeting occurs prior to the expiration or termination of the Offer) or the
acceptance for purchase of any shares of Common Stock pursuant to the Offer,
PROVIDED that ASARCO shall have complied with all of the No Solicitation
Provisions and
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that any such termination will not be effective unless the termination fee
payable pursuant to the terms of the Merger Agreement shall have been paid
contemporaneously with such termination;
(e) by Parent, if (i) prior to the Merger (in the event the ASARCO
Shareholders Meeting occurs prior to the expiration or termination of the
Offer) or the purchase of any shares of Common Stock pursuant to the Offer,
the ASARCO Board or any committee thereof shall have amended, withdrawn or
modified (or publicly disclosed its intention to do so) in a manner adverse
to Parent its approval or recommendation of the Offer or the Merger
Agreement (including a Neutral Statement, as defined in the Merger
Agreement, or a recommendation in favor of any ASARCO Takeover Proposal
filed pursuant to the Exchange Act) unless, in the case of a Neutral
Statement only, contemporaneously with the filing of such neutral statement
ASARCO publicly confirms that it continues to recommend approval of the
Merger and continues to actively support the Merger thereafter) or (ii) any
condition to the Offer described in Section 7 of this Supplement shall not
have been satisfied on or prior to the earlier of 30 days of notice that
such condition has not been satisfied and February 29, 2000;
(f) by ASARCO, if all of the conditions to the Offer have been satisfied
and Parent or Purchaser shall have terminated the Offer without purchasing
any shares of the Common Stock thereunder; PROVIDED, that ASARCO shall not
have breached in any material respect its obligations under the Merger
Agreement in any manner that shall have proximately contributed to the
failure of shares of Common Stock to have been purchased in the Offer;
(g) by either Parent or ASARCO, if any court of competent jurisdiction
or other governmental body shall have issued an order (other than a
temporary restraining order), decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the purchase of Common Stock
pursuant to the Merger, and such order, decree, ruling or other action shall
have become final and nonappealable; PROVIDED that the party seeking to
terminate the Merger Agreement shall have used its reasonable best efforts
to remove or lift such order, decree or ruling; or any statute, rule,
regulation, order, injunction or decree shall have been enacted, entered,
promulgated or enforced by any court, administrative agency or commission or
other governmental authority or instrumentality which prohibits or makes
illegal the consummation of the Merger and which, in the case of any such
order, injunction or decree, shall have become final and nonappealable; or
(h) by Parent or ASARCO, if the shareholders of ASARCO fail to approve
and adopt the Merger Agreement and approve the Merger at the ASARCO
Shareholders Meeting or any adjournment thereof.
EFFECT OF TERMINATION. In the event of termination of the Merger Agreement,
the Merger Agreement shall terminate (except for provisions relating to
investigation of ASARCO and its subsidiaries, release of certain claims by
Parent and Purchaser against the directors, officers and employees of ASARCO,
and payment of expenses) and there shall be no other liability on the part of
ASARCO or Parent to the other except liability arising out of a willful and
material breach of the Merger Agreement.
AMENDMENT OR SUPPLEMENT. At any time before or after adoption of the Merger
Agreement by the shareholders of ASARCO and prior to the Effective Time, the
Merger Agreement may be amended or supplemented in writing by ASARCO and Parent
with respect to any of the terms contained in the Merger Agreement; PROVIDED,
HOWEVER, that following approval by the shareholders of ASARCO there shall be no
amendment or change to the provisions of the Merger Agreement with respect to
the merger consideration as provided in the Merger Agreement nor any amendment
or change not permitted under applicable law, without further approval by the
shareholders of ASARCO.
TERMINATION FEE. If the Merger Agreement shall have been terminated
pursuant to the provisions described in paragraphs (b), (c), (d), (e)(i) or
(h) under "Termination" above, and subject to certain conditions, ASARCO shall
promptly, but (except as provided in paragraph (d) under "Termination" above) in
no event less than two business days after the termination of the Merger
Agreement, pay Parent a fee equal to $40 million (the "Termination Fee"),
payable by wire transfer of same day funds; PROVIDED, HOWEVER, that no ASARCO
Termination Fee shall be payable to Parent pursuant to this paragraph unless
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and until within 18 months of such termination ASARCO or any of its subsidiaries
enters into any ASARCO Acquisition Agreement or consummates any ASARCO Takeover
Proposal, except as provided otherwise in paragraph (d) under "Termination"
above. For the purposes of the foregoing proviso the terms "ASARCO Acquisition
Agreement" and "ASARCO Takeover Proposal" shall have the meanings set forth
under "No Solicitation Provisions" above (except that the reference to the
"acquisition or purchase of a business or shares of any class of equity
securities of ASARCO or any of its subsidiaries" in the definition of "ASARCO
Takeover Proposal" shall be deemed to be a reference to the "acquisition or
purchase of a business that constitutes 20% or more of the net revenues, net
income or the assets of ASARCO and its subsidiaries, taken as a whole, or 20% of
any class of equity securities of ASARCO or any of its subsidiaries," in which
event the Termination Fee shall be payable upon the first to occur of such
events. If ASARCO fails promptly to pay the Termination Fee, and, in order to
obtain such payment, Parent commences a suit which results in a judgement
against ASARCO for the Termination Fee, ASARCO shall pay to Parent its costs and
expenses (including attorneys' fees and expenses) in connection with such suit,
together with interest on the amount of the Termination Fee and the prime rate
of Citibank N.A. in effect on the date such payment was required to be made.
CLOSING. The Merger will become effective at such time as the certificates
of merger are duly filed with the New Jersey Secretary and the Delaware
Secretary or at such later time as is agreed to by the parties and as is
specified in the certificates of merger.
COSTS AND EXPENSES. Pursuant to the Merger Agreement, all costs and
expenses in connection with the Offer, the Merger Agreement and the contemplated
transactions, whether or not the Offer and the Merger are completed, shall be
paid by the party incurring such expenses, except (i) the filing fee in
connection with any HSR Act filing or any other required statutory approval, and
(ii) the expenses incurred in connection with the printing and mailing of a
proxy statement (including SEC filing fees) shall be shared equally by Parent
and ASARCO.
EXTENSION OF TIME; WAIVER. Under the Merger Agreement, at any time prior to
the Effective Time, any party to the Merger Agreement may: (a) extend the time
for the performance of any of the obligations or other acts of the other party;
(b) waive any inaccuracies in the representations and warranties of the other
party contained in the Merger Agreement or any document delivered pursuant to
the Merger Agreement; or (c) waive compliance with any of the agreements or
conditions of the other party contained in the Merger Agreement subject to the
proviso described under "Amendment or Supplement" above.
7. CONDITIONS OF THE OFFER. The discussion set forth in the "Introduction"
Section of the Offer to Purchase and Section 14 of the Offer to Purchase is
hereby amended and supplemented as follows.
A. The Minimum Condition is amended and restated in its entirety to read as
follows:
THE MINIMUM CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED UPON THERE
BEING VALIDLY TENDERED PRIOR TO THE EXPIRATION DATE AND NOT WITHDRAWN A NUMBER
OF SHARES OF COMMON STOCK WHICH, TOGETHER WITH SHARES OF COMMON STOCK OWNED BY
PARENT OR PURCHASER, REPRESENTS AT LEAST 80% OF THE TOTAL ISSUED AND OUTSTANDING
SHARES OF COMMON STOCK ON THE DATE SHARES OF COMMON STOCK ARE PURCHASED PURSUANT
TO THE OFFER (THE "MINIMUM CONDITION").
According to the Merger Agreement as of September 30, 1999 there were
39,921,427 shares of Common Stock outstanding and 1,799,669 Incentive Shares
subject to issuance.
Parent currently owns an aggregate of 3,900,000 shares of Common Stock.
Accordingly, Purchaser believes that the Minimum Condition would be satisfied if
an aggregate of 28,817,136 shares of Common Stock are validly tendered pursuant
to the Offer, plus 80% of any Incentive Shares that may be issued after
September 30, 1999 and on or prior to the Expiration Date.
B. Pursuant to the Merger Agreement, the conditions of the Offer are amended
and restated in their entirety to read as follows:
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Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) Purchaser's rights to extend and amend the Offer at any
time in its sole discretion (subject to the provisions of the Merger Agreement),
Purchaser 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 Purchaser's obligation to pay for or return tendered
Common Stock promptly after termination or withdrawal of the Offer), pay for,
and may delay the acceptance for payment of or, subject to the restriction
referred to above, the payment for, any tendered shares of Common Stock, and may
terminate or amend the Offer (but only subject to and in accordance with the
Merger Agreement) if (i) the Minimum Condition has not been satisfied or
(ii) at any time on or after October 23, 1999 and before the Expiration Date,
any of the following events shall occur:
(a) there shall have been any statute, rule, regulation, judgment, order
or injunction promulgated, entered, enforced, enacted, issued or rendered
applicable to the Offer or the Merger by any domestic or foreign, federal or
state governmental regulatory or administrative agency or authority or court
or legislative body or commission which (i) prohibits, or imposes any
material limitations on, Parent's or Purchaser's ownership or operation of
all or a material portion of ASARCO's businesses or assets, (ii) prohibits,
or makes illegal the acceptance for payment, payment for or purchase of
Common Stock or the consummation of the Offer or the Merger, (iii) results
in a material delay in or restricts the ability of Purchaser, or renders
Purchaser unable, to accept for payment, pay for or purchase some or all of
the tendered shares of Common Stock, or (iv) imposes material limitations on
the ability of Purchaser or Parent effectively to exercise full rights of
ownership of the Common Stock, including, without limitation, the right to
vote the Common Stock purchased by it on all matters properly presented to
ASARCO's shareholders, PROVIDED that Parent and Purchaser shall have used
all reasonable efforts to cause any such judgment, order or injunction to be
vacated or lifted;
(b) the representations and warranties of ASARCO set forth in the Merger
Agreement shall not be true and correct as of the date of consummation of
the Offer as though made on or as of such date except, in each case,
(i) for changes specifically permitted by the Merger Agreement and
(ii) (A) those representations and warranties that address matters only as
of a particular date which are true and correct as of such date or
(B) where the failure of such representations and warranties to be true and
correct (without giving effect to any qualifications as to "materiality" or
"Material Adverse Effect" set forth therein) would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on ASARCO, or ASARCO shall have materially breached or failed in any
material respect to perform or comply with any material obligation,
agreement or covenant required by the Merger Agreement to be performed or
complied with by it;
(c) the Merger Agreement shall have been terminated in accordance with
its terms prior to the Expiration Date;
(d) ASARCO shall have entered into a definitive agreement or agreement
in principle with any person with respect to an ASARCO Takeover Proposal or
similar business combination with ASARCO;
(e)(i) The Chase Manhattan Bank and Chase Securities Inc. shall have
terminated the Fourth Amended and Restated Commitment Letter as a result of
there having occurred after October 25, 1999 to December 18, 1999, a general
banking moratorium established by Federal or state authorities, a generally
recognized capital markets crisis, as evidenced by a cumulative 20% decline
in the Dow Jones Industrial Average over a period of five (5) consecutive
trading days, or a virtual cessation in bank and other private debt
financings or the introduction of additional material government
restrictions imposed upon lending institutions which materially affect the
type of transactions contemplated by the Merger Agreement, and (ii) The
Chase Manhattan Bank and Chase Securities Inc. shall have terminated the
Fourth Amended and Restated Commitment Letter as a result of there having
occurred after December 18, 1999, a material disruption of or material
adverse change in U.S. or
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developed country financial, banking or capital market conditions that is
reasonably likely to materially impair the syndication of the Credit
Facilities; or
(f) the ASARCO Board shall have withdrawn, or amended, modified or
changed in a manner adverse to Parent or the Purchaser (including by
amendment of the Schedule 14D-9 filed by ASARCO with respect to the Offer),
its recommendation of the Offer, the Merger Agreement or the Merger, or
recommended another proposal or offer from any person other than Parent or
Purchaser, or shall have resolved to do any of the foregoing;
which in the reasonable judgment of Parent or Purchaser, in any such case, and
regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment or
payments.
The foregoing conditions will be for the sole benefit of Parent and
Purchaser and may be waived by Parent or Purchaser, in whole or in part at any
time and from time to time in the sole discretion of Parent or Purchaser.
8. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR ASARCO; CERTAIN
CONSIDERATIONS. The discussion set forth in Section 12 of the Offer to Purchase
is hereby amended and supplemented as follows:
PLANS FOR ASARCO. Pursuant to the Merger Agreement, Parent, Purchaser and
ASARCO have agreed, among other things, to modify the composition of the ASARCO
Board to include designees of Parent following consummation of the Offer and to
amend the ASARCO By-Laws at the Effective Time of the Merger to be the bylaws of
Purchaser.
SHAREHOLDER PROTECTION ACT. The ASARCO Board has approved and adopted the
Merger Agreement and the transactions contemplated thereby (including the
Offer), including, without limitation, for purposes of the New Jersey Business
Corporation Act.
THE ASARCO CERTIFICATE AND THE ASARCO BY-LAWS. The ASARCO Board has
approved and adopted the Merger Agreement and the transactions contemplated
thereby (including the Offer), including, without limitation, for purposes of
the ASARCO Certificate of Incorporation.
THE RIGHTS. ASARCO has represented that it has taken all necessary action
to render the Rights Agreement inapplicable to the transactions contemplated by
the Merger Agreement, including the Offer.
9. DIVIDENDS AND DISTRIBUTIONS. The discussion set forth in Section 13 of
the Offer to Purchase is hereby amended and restated in its entirety to read as
follows:
Pursuant to the terms of the Merger Agreement, ASARCO is prohibited from
taking any of the actions described in the two succeeding paragraphs, and
nothing herein shall constitute a waiver by Purchaser or Parent of any of their
rights under the Merger Agreement or the limitation of remedies available to
Purchaser or Parent for any breach of the Merger Agreement, including
termination thereof.
If, on or after October 25, 1999, ASARCO should (i) split, combine or
otherwise change the Common Stock or its capitalization, (ii) issue or sell any
additional securities of ASARCO or otherwise cause an increase in the number of
outstanding securities of ASARCO or (iii) acquire currently outstanding shares
of Common Stock or otherwise cause a reduction in the number of outstanding
shares of Common Stock, then, without prejudice to Purchaser's rights under
Section 1 and Section 14, Purchaser, in its sole discretion, may make such
adjustments as it deems appropriate in the purchase price and other terms of the
Offer, including without limitation, the amount and type of securities subject
to the Offer.
If on or after October 25, 1999, ASARCO should declare or pay any dividend
on the Common Stock, other than regular quarterly dividends, or make any
distribution (including, without limitation, the issuance of additional shares
of Common Stock pursuant to a stock dividend or stock split, the issuance of
other securities or the issuance of rights for the purchase of any securities)
with respect to the Common Stock that is payable or distributable to
shareholders of record on a date prior to the transfer to Purchaser or its
19
<PAGE>
nominee or transferee on ASARCO's stock transfer records of the Common Stock
purchased pursuant to the Offer, then, without prejudice to Purchaser's rights
under Section 1 and Section 14, (i) the Offer Price will be reduced by the
amount of any such cash dividend or cash distribution and (ii) any such non-cash
dividend, distribution or right to be received by the tendering shareholders
will be received and held by such tendering shareholders for the account to
Purchaser and will be required to be promptly remitted and transferred by each
such tendering shareholder to the Depositary for the account of Purchaser,
accompanied by appropriate documentation of transfer. Pending such remittance
and subject to applicable law, Purchaser will be entitled to all rights and
privileges as owner of any such non-cash dividend, distribution or right and may
withhold the entire purchase price or deduct from the purchase price the amount
of value thereof, as determined by Purchaser in its sole discretion.
10. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS; CERTAIN LITIGATION. The
discussion set forth in Section 15 of the Offer to Purchase is amended and
supplemented as follows:
GERMAN ANTITRUST LAW. On October 20, 1999, Parent and Purchaser received
notice that they had been granted approval by the BKartA. Accordingly, Parent is
free to consummate the Offer and the Merger at any time without any further
requirements under the German Act Against Restraints of Competition.
THE SHAREHOLDER PROTECTION ACT. The ASARCO Board has approved and adopted
the Merger Agreement and the transactions contemplated thereby (including the
Offer) for purposes of the New Jersey Business Corporation Act.
11. MISCELLANEOUS. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of shares of Common Stock in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction. However, Purchaser may,
in its sole discretion, take such action as it may deem necessary to make the
Offer in any such jurisdiction and extend the Offer to holders of shares of
Common Stock in such jurisdiction.
Neither Parent nor Purchaser is aware of any jurisdiction in which the
making of the Offer or the acceptance of shares of Common Stock in connection
therewith would not be in compliance with the laws of such jurisdiction.
Parent and Purchaser have filed with the SEC a Statement on Schedule 14D-1
pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange
Act and have filed amendments and may file additional amendments thereto
furnishing certain additional information with respect to the Offer. Such
Statement and any amendments thereto, including exhibits, may be examined and
copies may be obtained from the SEC in the manner set forth in Section 8 of the
Offer to Purchase.
EXCEPT AS OTHERWISE SET FORTH IN THIS SUPPLEMENT AND IN THE REVISED (YELLOW)
LETTER OF TRANSMITTAL, THE TERMS AND CONDITIONS PREVIOUSLY SET FORTH IN THE
OFFER TO PURCHASE REMAIN APPLICABLE IN ALL RESPECTS TO THE OFFER, AND THIS
SUPPLEMENT SHOULD BE READ IN CONJUNCTION WITH THE OFFER TO PURCHASE.
No person has been authorized to give any information or make any
representation on behalf of Parent or Purchaser not contained in this
Supplement, the Offer to Purchase or in the revised (yellow) Letter of
Transmittal and, if given or made, such information or representation must not
be relied upon as having been authorized.
Neither the delivery of this Supplement or the Offer to Purchase nor any
purchase pursuant to the Offer shall, under any circumstances, create any
implication that there has been no change in the affairs of Parent, Purchaser,
ASARCO or any of their respective subsidiaries since the date as of which
information is furnished or the date of this Supplement.
ASMEX CORPORATION
October 26, 1999
20
<PAGE>
Facsimile copies of the Letters of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, Common Stock Certificates
(and Rights Certificates, if applicable) and any other required documents should
be sent by each shareholder of ASARCO or his broker, dealer, commercial bank,
trust company or other nominee to the Depositary as follows:
The Depositary for the Offer is:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
BY COURIER: BY MAIL: BY HAND:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
915 Broadway P.O. Box 685 Corporate Trust Window
5(th) Floor Old Chelsea Station 111 Wall Street, 5(th) Floor
New York, New York 10010 New York, New York 10113 New York, New York 10043
</TABLE>
Facsimile for Eligible Institutions: (212) 505-2248
To Confirm Facsimile Only: (800) 270-0808
------------------------
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and locations
listed below. Additional copies of the Offer to Purchase, this Supplement, the
Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from
the Information Agent at its address and telephone numbers set forth below.
Holders of share of Common Stock may also contact their broker, dealer,
commercial bank or trust company or other nominee for assistance concerning the
Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
UNITED STATES
77 Water Street
New York, New York 10005
CALL TOLL-FREE: (800) 714-3305
or
(212) 269-5550 (call collect)
EUROPE
Royex House, Aldermanbury Square
London, England EC2V 7HR
(44) 171 600 5005 (call collect)
The Dealer Manager for the Offer is:
CHASE SECURITIES INC.
270 PARK AVENUE
NEW YORK, NEW YORK 10017
TELEPHONE: (212) 270-3298
21
<PAGE>
REVISED LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE RIGHTS)
OF
ASARCO INCORPORATED
PURSUANT TO THE OFFER TO PURCHASE,
DATED SEPTEMBER 27, 1999
AS AMENDED AND SUPPLEMENTED
BY SUPPLEMENT NO. 1
DATED OCTOBER 8, 1999
AND SUPPLEMENT NO. 2 DATED OCTOBER 26, 1999
BY
ASMEX CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
GRUPO MEXICO, S.A. DE C.V.
THE EXPIRATION DATE OF THE OFFER HAS BEEN EXTENDED SUCH THAT THE OFFER AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY,
NOVEMBER 9, 1999, UNLESS THE OFFER IS FURTHER EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
BY COURIER: BY MAIL: BY HAND:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
915 Broadway P.O. Box 685 Corporate Trust Window
5th Floor Old Chelsea Station 111 Wall Street, 5th Floor
New York, New York 10010 New York, New York 10113 New York, New York 10043
</TABLE>
BY FACSIMILE TRANSMISSION:
(FOR ELIGIBLE INSTITUTIONS ONLY)
(212) 505-2248
FOR INFORMATION TELEPHONE:
(800) 270-0808
------------------------
DELIVERY OF THIS REVISED LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS
REVISED LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE
FORM W-9 PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS REVISED LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS REVISED LETTER OF TRANSMITTAL IS COMPLETED.
THIS REVISED LETTER OF TRANSMITTAL OR THE ORIGINAL (BLUE) LETTER OF
TRANSMITTAL PREVIOUSLY DISTRIBUTED IS TO BE COMPLETED BY SHAREHOLDERS OF ASARCO
INCORPORATED EITHER IF CERTIFICATES EVIDENCING SHARES OF COMMON STOCK AND/OR
RIGHTS (EACH AS DEFINED HEREIN) ARE TO BE FORWARDED HEREWITH, OR IF DELIVERY OF
SHARES OF COMMON STOCK AND/OR RIGHTS IS TO BE MADE BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY (THE "BOOK-ENTRY TRANSFER
FACILITY") PURSUANT TO THE BOOK-ENTRY TRANSFER PROCEDURE DESCRIBED IN
"PROCEDURES FOR TENDERING SHARES OF COMMON STOCK" OF THE OFFER TO PURCHASE DATED
SEPTEMBER 27, 1999, AS AMENDED AND SUPPLEMENTED BY SUPPLEMENT NO. 1 DATED
OCTOBER 8, 1999 AND SUPPLEMENT NO. 2 DATED OCTOBER 26, 1999 (SUCH OFFER TO
PURCHASE, AS AMENDED AND SUPPLEMENTED, THE "OFFER TO PURCHASE"). DELIVERY OF
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY
TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY
(AS DEFINED IN THE OFFER TO PURCHASE).
<PAGE>
In the event a Distribution Date (as defined in the Offer to Purchase) has
occurred, holders of shares of Common Stock will be required to tender one Right
for each share of Common Stock tendered to effect a valid tender of such shares
of Common Stock. Unless and until the Distribution Date occurs, the Rights are
represented by and transferred with the Common Stock. Accordingly, if the
Distribution Date does not occur prior to the Expiration Date (as defined in the
Offer to Purchase) of the Offer (as defined in the Offer to Purchase), a tender
of shares of Common Stock will constitute a tender of the associated Rights. If
a Distribution Date has occurred before shares of Common Stock are tendered,
Rights Certificates (as defined in the Offer to Purchase) representing a number
of Rights equal to the number of shares of Common Stock being tendered must be
delivered to the Depositary in order for such shares of Common Stock to be
validly tendered. If a Distribution Date has occurred subsequent to the tender
of shares of Common Stock, Rights Certificates representing a number of Rights
equal to the number of shares of Common Stock tendered pursuant to the Offer
must be delivered to the Depositary within three New York Stock Exchange
("NYSE") trading days after the date such Rights Certificates are distributed in
order for such shares of Common Stock to be validly tendered.
If a shareholder desires to tender shares of Common Stock pursuant to the
Offer and such shareholder's Common Stock Certificates (as defined in the Offer
to Purchase), and if applicable, Rights Certificates, 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 of Common Stock may nevertheless be
tendered pursuant to the guaranteed delivery procedure described in "Procedures
for Tendering Shares of Common Stock" of the Offer to Purchase. See Instruction
2. Delivery of documents to a Book-Entry Transfer Facility (as defined in the
Offer to Purchase) in accordance with the Book-Entry Transfer Facility's
procedures does not constitute delivery to the Depositary.
2
<PAGE>
/ / CHECK HERE IF TENDERED SHARES OF COMMON STOCK ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
/ / CHECK HERE IF TENDERED RIGHTS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE
THE FOLLOWING*:
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
*NOTE: MUST BE PROVIDED ONLY IN THE EVENT THAT THERE HAS BEEN A DISTRIBUTION
DATE (AND RIGHTS CERTIFICATES HAVE BEEN DELIVERED) PRIOR TO THE TENDER OF
YOUR COMMON STOCK.
/ / CHECK HERE IF TENDERED SHARES OF COMMON STOCK ARE BEING TENDERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s): ___________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution which Guaranteed Delivery: _____________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
/ / CHECK HERE IF TENDERED RIGHTS ARE BEING TENDERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING*:
Name(s) of Registered Holder(s): ___________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution which Guaranteed Delivery: _________________________
Account Number: ________________________________________________________
Transaction Code Number: ___________________________________________________
*NOTE: MUST BE PROVIDED ONLY IN THE EVENT THAT THERE HAS BEEN A DISTRIBUTION
DATE (AND RIGHTS CERTIFICATES HAVE BEEN DELIVERED) PRIOR TO THE TENDER OF YOUR
COMMON STOCK.
3
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DESCRIPTION OF SHARES OF COMMON STOCK TENDERED
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARES OF COMMON STOCK CERTIFICATE(S) TENDERED (ATTACH
(PLEASE FILL IN, IF BLANK) ADDITIONAL LIST IF NECESSARY)
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
SHARES OF NUMBER OF
COMMON STOCK SHARES OF
CERTIFICATE REPRESENTED BY COMMON STOCK
NUMBER(S)* CERTIFICATE(S) TENDERED**
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Total Shares of
Common Stock
- ---------------------------------------------------------------------------------------------------------------------------
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all shares of Common Stock being delivered to the Depositary are
being tendered. See Instruction 4.
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
PLEASE COMPLETE THE BOX BELOW ONLY IN THE EVENT A DISTRIBUTION
DATE HAS OCCURRED
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DESCRIPTION OF RIGHTS TENDERED
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) RIGHTS CERTIFICATE(S) TENDERED*
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- -------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF RIGHTS
CERTIFICATE REPRESENTED BY NUMBER OF RIGHTS
NUMBER(S)** CERTIFICATE(S) TENDERED***
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Total Rights
- -------------------------------------------------------------------------------------------------------------------------
* If the tendered Rights are represented by separate Rights Certificates, provide the certificate numbers of such
Rights Certificates. Shareholders tendering Rights which are not represented by separate certificates will need to
submit an additional Letter of Transmittal if Rights Certificates are distributed.
** Need not be completed by shareholders tendering by book-entry transfer.
*** Unless otherwise indicated, it will be assumed that all Rights being delivered to the Depositary are being tendered.
See Instruction 4.
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
The name(s) and address(es) of the registered holder(s) should be printed,
if not already printed above, exactly as it appears on the certificate(s)
representing shares of Common Stock and/or Rights tendered hereby. The
certificate(s) and number of shares of Common Stock and/or Rights that the
undersigned wishes to tender should be indicated in the appropriate boxes.
4
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
REVISED LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to ASMEX Corporation, a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Grupo Mexico, S.A. de C.V., a
Mexican corporation ("Parent"), the above described shares of common stock,
without par value (the "Common Stock"), of ASARCO Incorporated, a New Jersey
corporation ("ASARCO"), including the associated junior participating preferred
stock purchase rights (including any successors thereto, the "Rights") issued
pursuant to the Rights Agreement, dated as of January 28, 1998, as amended as of
July 15, 1999, between ASARCO and The Bank of New York, as Rights Agent (as such
agreement may be further amended and including any successor agreement, the
"Rights Agreement"), pursuant to Purchaser's offer to purchase all of the
outstanding shares of Common Stock, including the associated Rights, at a price
of $29.75 per share, net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in the Offer to Purchase (as
amended and supplemented, the "Offer to Purchase"), dated September 27, 1999, as
amended and supplemented by Supplement No. 1, dated October 8, 1999, and
Supplement No. 2 dated October 26, 1999, receipt of which is hereby
acknowledged, and in this revised Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer"). Unless the context requires
otherwise, all references herein to Common Stock shall include the associated
Rights, whether or not such Rights are evidenced by separate Rights Certificates
(as defined in the Offer to Purchase), and all references to the Rights shall
include the benefits that may inure to the holders of the Rights pursuant to the
Rights Agreement, including the right to receive any payment due upon redemption
of the Rights.
The undersigned understands that Purchaser reserves the right to transfer or
assign, in whole at any time, or in part from time to time, to Parent or one or
more wholly owned subsidiaries of Parent, the right to purchase all or any
portion of the Common Stock tendered pursuant to the Offer, provided that any
such transfer or assignment will not relieve Purchaser of its obligations under
the Offer and will in no way prejudice the rights of tendering shareholders to
receive payment for shares of Common Stock validly tendered and accepted for
payment pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the shares of
Common Stock and Rights tendered herewith, in accordance with the terms of the
Offer (including, if the Offer is extended or amended, the terms and conditions
of any such extension or amendment), the undersigned hereby sells, assigns and
transfers to, or upon the order of, Purchaser all right, title and interest in
and to all the shares of Common Stock and Rights that are being tendered hereby
(and any and all non-cash dividends, distributions, rights, other shares of
Common Stock or other securities issued or issuable in respect thereof or
declared, paid or distributed in respect of such shares of Common Stock on or
after October 25, 1999 (collectively, "Distributions")), and irrevocably
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such shares of Common Stock and all Distributions,
with full power of substitution (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (i) deliver certificates for
such shares of Common Stock and Rights (each a "Certificate") and all
Distributions, or transfer ownership of such shares of Common Stock and all
Distributions on the account books maintained by the Book-Entry Transfer
Facility, together, in either case, with all accompanying evidence of transfer
and authenticity to, or upon the order of Purchaser, (ii) present such shares of
Common Stock and all Distributions for transfer on the books of ASARCO and
(iii) receive all benefits and otherwise exercise all rights of beneficial
ownership of such shares of Common Stock and all Distributions, all in
accordance with the terms of the Offer.
If, on or after October 25, 1999, ASARCO should declare or pay any dividend
on the Common Stock, other than regular quarterly dividends, or make any
distribution (including, without limitation, the issuance of additional shares
of Common Stock pursuant to a stock dividend or stock split, the issuance of
other securities or the issuance of rights for the purchase of any securities)
with respect to the Common Stock that is payable or distributable to
shareholders of record on a date prior to the transfer to Purchaser or its
nominee or transferee on ASARCO's stock transfer records of the Common Stock
purchased pursuant to the Offer, then, without prejudice to Purchaser's rights
under Section 1 and Section 14 of the Offer to Purchase, (i) the purchase price
per share of Common Stock payable by Purchaser pursuant to the Offer will be
reduced by the amount of any such cash dividend or cash distribution and
(ii) any such non-cash dividend, distribution or right to be received by the
tendering shareholders will be received and held by such tendering shareholders
for the account of Purchaser and will be required to be promptly remitted and
transferred by each such tendering shareholder to the Depositary for the account
of Purchaser, accompanied by appropriate documentation of transfer. Pending such
remittance and subject to applicable law, Purchaser will be entitled to all
rights and privileges as owner of any such non-cash dividend, distribution or
right and may withhold the entire purchase price or deduct from the purchase
price the amount of value thereof, as determined by Purchaser in its sole
discretion.
5
<PAGE>
By executing this revised Letter of Transmittal, the undersigned irrevocably
appoints Daniel Tellechea Salido and Hector Calva Ruiz as proxies of the
undersigned, individually but not jointly, each with full power of substitution,
to the full extent of the undersigned rights with respect to the Common Stock
tendered by the undersigned and accepted for payment by Purchaser (and any and
all Distributions). All such proxies shall be considered coupled with an
interest in the tendered Common Stock. This appointment will be effective if,
when, and only to the extent that, Purchaser accepts such Common Stock for
payment pursuant to the Offer. Upon such acceptance for payment, all prior
powers of attorney, proxies and consents given by the undersigned with respect
to such Common Stock and other securities will, without further action, be
revoked, and no subsequent powers of attorney, proxies and consents may be given
(and if given will not be deemed effective). The designees of Purchaser will,
with respect to the Common Stock and other securities for which the appointment
is effective, be empowered to exercise all voting and other rights of the
undersigned as they in their sole discretion may deem proper at any annual,
special, adjourned or postponed meeting of ASARCO's shareholders, by written
consent or otherwise, and Purchaser reserves the right to require that, in order
for Common Stock or other securities to be deemed validly tendered, immediately
upon Purchaser's acceptance for payment of such Common Stock, Purchaser must be
able to exercise full voting rights with respect to such shares of Common Stock.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the shares of Common
Stock tendered hereby and all Distributions, that the undersigned own(s) the
shares of Common Stock tendered hereby within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that such tender of shares of Common Stock complies with Rule 14e-4 under
the Exchange Act, and that, when such shares of Common Stock are accepted for
payment by Purchaser, Purchaser will acquire good, marketable and unencumbered
title thereto and to all Distributions, free and clear of all liens,
restrictions, charges and encumbrances, and that none of such shares of Common
Stock, and Distributions will be subject to any adverse claim. The undersigned,
upon request, shall execute and deliver all additional documents deemed by the
Depositary or Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the shares of Common Stock tendered hereby and all
Distributions. In addition, the undersigned shall remit and transfer promptly to
the Depositary for the account of Purchaser all Distributions in respect of the
shares of Common Stock tendered hereby, accompanied by appropriate documentation
of transfer, and, pending such remittance and transfer or appropriate assurance
thereof, Purchaser shall be entitled to all rights and privileges as owner of
each such Distribution and may withhold the entire purchase price or deduct from
such purchase price the amount or value of such Distribution as determined by
Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, executors, personal and legal representatives, administrators,
trustees in bankruptcy, successors and assigns of the undersigned. Except as
stated in the Offer to Purchase, this tender is irrevocable, provided that
shares of Common Stock tendered pursuant to the Offer may be withdrawn at any
time prior to their acceptance for payment in accordance with Section 4 of the
Offer to Purchase.
The undersigned understands that tenders of shares of Common Stock pursuant
to any one of the procedures described in "Procedures for Tendering Shares of
Common Stock" of the Offer to Purchase and in the Instructions hereto will
constitute the undersigned's acceptance of the terms and conditions of the
Offer. Purchaser's acceptance for payment of shares of Common Stock tendered
pursuant to the Offer will constitute a binding agreement between the
undersigned and Purchaser upon the terms and subject to the conditions of the
Offer. The undersigned recognizes that under certain circumstances set forth in
the Offer to Purchase, Purchaser may not be required to accept for payment any
of the shares of Common Stock tendered hereby.
6
<PAGE>
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions", please issue the check for the purchase price and/or return any
certificates evidencing shares of Common Stock and/or Rights not tendered or
accepted for payment, in the name(s) of the registered holder(s) appearing above
under "Description of Shares of Common Stock Tendered" and/or "Description of
Rights Tendered". Similarly, unless otherwise indicated in the box entitled
"Special Delivery Instructions", please mail the check for the purchase price
and/or return any certificates evidencing shares of Common Stock and/or Rights
not tendered or accepted for payment (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares of Common Stock Tendered" and/or "Description of
Rights Tendered". In the event that the boxes entitled "Special Payment
Instructions" and "Special Delivery Instructions" are both completed, please
issue the check for the purchase price and/or return any certificates for shares
of Common Stock and/or Rights not purchased or not tendered or accepted for
payment in the name(s) of, and mail such check and/or return such certificates
to, the person(s) so indicated. Unless otherwise indicated herein in the box
entitled "Special Payment Instructions", please credit any shares of Common
Stock and/or Rights tendered hereby and delivered by book-entry transfer, but
which are not purchased, by crediting the account at the Book-Entry Transfer
Facility designated above. The undersigned recognizes that Purchaser has no
obligation, pursuant to the Special Payment Instructions, to transfer any shares
of Common Stock and/or Rights from the name of the registered holder(s) thereof
if Purchaser does not accept for payment any of the shares of Common Stock
and/or Rights tendered hereby.
7
<PAGE>
- ----------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7 OF THIS
REVISED LETTER OF TRANSMITTAL)
To be completed ONLY if certificates for shares of Common Stock and/or
Rights not tendered or not purchased and/or the check for the purchase price
of shares of Common Stock and/or Rights purchased are to be issued in the name
of someone other than the undersigned, or if the shares of Common Stock and/or
Rights delivered by book-entry transfer which are not purchased are to be
returned by credit to an account maintained at the Book-Entry Transfer
Facility other than that designated above.
Issue / / Check and/or / / Certificate(s) to:
Name: ________________________________________________________________________
(Please Print)
Address: _____________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Include Zip Code)
______________________________________________________________________________
(Tax Identification or Social Security Number(s))
(Complete Substitute Form W-9 Below)
/ / Credit unpurchased shares of Common Stock and/or Rights delivered by
book-entry transfer to the Book-Entry Transfer Facility account set forth
below:
___________________________________________________________________________
(Account Number)
- ----------------------------------------------
- ----------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 7 OF THIS
REVISED LETTER OF TRANSMITTAL)
To be completed ONLY if certificates for shares of Common Stock and/or
Rights not tendered or not purchased and/or the check for the purchase price
of shares of Common Stock and/or Rights purchased are to be sent to someone
other than the undersigned, or to the undersigned at an address other than
that shown above.
Mail / / Check and/or / / Certificate(s) to:
Name: ________________________________________________________________________
(Please Print)
Address: _____________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Include Zip Code)
- ------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
HOLDER(S) SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
____________________________________________________________________________
____________________________________________________________________________
(SIGNATURE(S) OF HOLDER(S))
Name(s): ___________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Capacity (full title): _____________________________________________________
Address: ___________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
____________________________________________________________________________
Area Code and Telephone Number:_____________________________________________
(Tax Identification or Social Security Number(s)) __________________________
(COMPLETE
SUBSTITUTE W-9 BELOW)
Date: __________, 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Common Stock certificate(s) or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please provide the
following information. See Instruction 5 of this Revised Letter of
Transmittal.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5 OF THIS REVISED LETTER OF TRANSMITTAL)
Authorized signature _______________________________________________________
Name (Please Print) ________________________________________________________
Name of Firm: ______________________________________________________________
Capacity (full title): _____________________________________________________
(PLEASE PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
____________________________________________________________________________
Area Code and Telephone Number: ____________________________________________
Date: __________, 1999
- --------------------------------------------------------------------------------
9
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this revised Letter of Transmittal must be guaranteed by a firm
which is a bank, broker, dealer, credit union, savings association or other
entity that is an "eligible guarantor institution", as such term is defined in
Rule 17Ad-15 under the Exchange Act or is a member in good standing of the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution"). No signature guarantee is required on this
revised Letter of Transmittal (a) if this revised Letter of Transmittal is
signed by the registered holder(s) (which term, for purposes of this document,
shall include any participant in the Book-Entry Transfer Facility's system whose
name appears on a security position listing as the owner of shares of Common
Stock or Rights) of shares of Common Stock and/or Rights tendered herewith,
unless such registered holder(s) has completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions", or
(b) if such shares of Common Stock or Rights are tendered for the account of an
Eligible Institution. See Instruction 5. If a Certificate is registered in the
name of a person other than the signer of this revised Letter of Transmittal, or
if payment is to be made, or a Certificate not accepted for payment or not
tendered is to be returned, to a person other than the registered holder(s),
then 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)
appears on the Certificate, with the signature(s) on such Certificate or stock
powers guaranteed as described above. See Instruction 5.
2. DELIVERY OF REVISED LETTER OF TRANSMITTAL AND COMMON STOCK AND RIGHTS.
This revised Letter of Transmittal is to be used either if Certificates are to
be forwarded herewith or if shares of Common Stock and/or Rights are to be
delivered by book-entry transfer pursuant to the procedure set forth in
"Procedures for Tendering Shares of Common Stock" of the Offer to Purchase. If a
Distribution Date has occurred, Certificates representing a number of Rights
equal to the number of shares of Common Stock being tendered must be delivered
to the Depositary in order for such Common Stock to be validly tendered. If a
Distribution Date has occurred, a tender of Common Stock without Rights
constitutes an agreement by the tendering shareholder to deliver Certificates
representing a number of Rights equal to the number of shares of Common Stock
tendered pursuant to the Offer to the Depositary within three NYSE trading days
after the date such Rights Certificates are distributed. Purchaser reserves the
right to require that it receive such Certificates prior to accepting Common
Stock for payment. Payment for Common Stock tendered and purchased pursuant to
the Offer will be made only after timely receipt by the Depositary of, among
other things, such Rights Certificates, if such Certificates have been
distributed to holders of Common Stock. Purchaser will not pay any additional
consideration for the Rights tendered pursuant to the Offer. Certificates
evidencing all tendered shares of Common Stock and/or Rights, or confirmation of
a book-entry transfer of such shares of Common Stock and/or Rights, if such
procedure is available, into the Depositary's account at the Book-Entry Transfer
Facility pursuant to the procedures set forth in "Procedures for Tendering
Shares of Common Stock" of the Offer to Purchase, together with a properly
completed and duly executed revised Letter of Transmittal (or facsimile thereof)
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message, as defined herein) and any other documents
required by this revised Letter of Transmittal, must be received by the
Depositary at its address set forth on the cover page hereof prior to the
Expiration Date (as defined in "Terms of the Offer; Expiration Date" of the
Offer to Purchase). If Certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed revised Letter of Transmittal
must accompany each such delivery. Shareholders whose Certificates are not
immediately available, who cannot deliver their Certificates and all other
required documents to the Depositary prior to the Expiration Date or who cannot
complete the procedure for delivery by book-entry transfer on a timely basis may
tender their shares of Common Stock or Rights pursuant to the guaranteed
delivery procedure described in "Procedures for Tendering Shares of Common
Stock" of the Offer to Purchase. Pursuant to such procedure: (i) such tender
must be made by or through an Eligible Institution; (ii) a properly completed
and duly executed Notice of Guaranteed Delivery, substantially in the form
provided by Purchaser herewith, must be received by the Depositary prior to the
Expiration Date; and (iii) in the case of a guarantee of shares of Common Stock,
the Common Stock Certificates for all tendered shares of Common Stock, in proper
form for transfer, or a Book Entry Confirmation (as defined in the Offer to
Purchase), together with a properly completed and duly executed revised Letter
of Transmittal (or manually signed facsimile thereof) with any required
signature guarantee (or, in the case of a book-entry transfer, an Agent's
Message), and any other documents required by this revised Letter of
Transmittal, must be received by the Depositary within three NYSE trading days
after the date of execution of the Notice of Guaranteed Delivery, all as
described in "Procedures for Tendering Shares of Common Stock" of the Offer to
Purchase. The term "Agent's Message" means a message, transmitted by the
Book-Entry Transfer Facility to, and received by, the Depositary and forming a
part of a Book-Entry Confirmation, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the participant in the
Book-Entry Transfer Facility who is tendering the Common Stock that such
participant has received and agrees to be bound by the terms of the revised
Letter of Transmittal and that Purchaser may enforce such agreement against the
participant. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
10
<PAGE>
THE METHOD OF DELIVERY OF CERTIFICATES, A RELATED LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE SOLE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional shares of Common Stock or Rights will be purchased. By execution of
this revised Letter of Transmittal (or a facsimile hereof), all tendering
shareholders waive any right to receive any notice of the acceptance of their
shares of Common Stock or Rights for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares of Common Stock Tendered" or "Description of Rights Tendered" is
inadequate, the Certificate numbers, the number of shares of Common Stock or
Rights evidenced by such Certificates and the number of shares of Common Stock
or Rights tendered should be listed on a separate schedule (executed in the same
manner as this revised Letter of Transmittal) and attached hereto.
4. PARTIAL TENDERS. (Not applicable to shareholders who tender by book-entry
transfer.) If fewer than all the shares of Common Stock or Rights evidenced by
any Certificate delivered to the Depositary herewith are to be tendered hereby,
fill in the number of shares of Common Stock or Rights which are to be tendered
in the boxes entitled "Number of Shares of Common Stock Tendered" and "Number of
Rights Tendered." In such cases, new Certificate(s) evidencing the remainder of
the shares of Common Stock or Rights that were evidenced by the Certificates
delivered to the Depositary herewith will be sent to the person(s) signing this
revised Letter of Transmittal, unless otherwise provided in the box entitled
"Special Delivery Instructions", as soon as practicable after the expiration or
termination of the Offer. All shares of Common Stock or Rights evidenced by
Certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated in the manner described above.
5. SIGNATURES ON REVISED LETTER OF TRANSMITTAL; STOCK POWERS AND
ENDORSEMENTS. If this revised Letter of Transmittal is signed by the registered
holder(s) of the shares of Common Stock or Rights tendered hereby, the
signature(s) must correspond with the name(s) as written on the face of the
Certificate(s) evidencing such shares of Common Stock or Rights without
alteration, enlargement or any other change whatsoever.
If any shares of Common Stock or Rights tendered hereby are owned of record
by two or more persons, all such persons must sign this revised Letter of
Transmittal.
If any of the shares of Common Stock or Rights tendered hereby are
registered in the names of different holders, it will be necessary to complete,
sign and submit as many separate Letters of Transmittal as there are different
registrations of such certificates.
If this revised Letter of Transmittal is signed by the registered holder(s)
of the shares of Common Stock or Rights tendered hereby, no endorsements of
Certificates or separate stock powers are required, unless payment is to be made
to, or Certificates evidencing shares of Common Stock or Rights not tendered or
not purchased are to be issued in the name of, a person other than the
registered holder(s), in which case, the Certificate(s) evidencing the shares of
Common Stock or Rights tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Certificate(s). Signatures on such
Certificate(s) and stock powers must be guaranteed by an Eligible Institution.
If this revised Letter of Transmittal is signed by a person other than the
registered holder(s) of the shares of Common Stock or Rights tendered hereby,
the Certificate(s) evidencing the shares of Common Stock or Rights tendered
hereby must be endorsed or accompanied by appropriate stock powers, in either
case signed exactly as the name(s) of the registered holder(s) appear(s) on such
Certificate(s). Signatures on such Certificate(s) and stock powers must be
guaranteed by an Eligible Institution.
If this revised Letter of Transmittal or any Certificate(s) or stock power
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of such person's authority so to act must be
submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6,
Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any shares of Common Stock or Rights to it or its order pursuant to
the Offer. If, however, payment of the purchase price of any shares of Common
Stock or Rights purchased is to be made to, or Certificate(s) evidencing shares
of Common Stock or Rights not tendered or not purchased are to be issued in the
name of, a person other than the registered holder(s), 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 other person will be
deducted from the purchase price of such shares of Common Stock or Rights
purchased, unless evidence satisfactory to Purchaser of the payment of such
taxes, or exemption therefrom, is submitted.
11
<PAGE>
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATE(S) EVIDENCING THE SHARES OF
COMMON STOCK TENDERED HEREBY.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any shares of Common Stock or Rights tendered hereby is to be issued,
or Certificate(s) evidencing shares of Common Stock or Rights not tendered or
not purchased are to be issued, in the name of a person other than the person(s)
signing this revised Letter of Transmittal or if such check or any such
Certificate is to be sent to someone other than the person(s) signing this
revised Letter of Transmittal or to the person(s) signing this revised Letter of
Transmittal but at an address other than that shown in the box entitled
"Description of Shares of Common Stock Tendered", the appropriate boxes on this
revised Letter of Transmittal must be completed. Shareholders tendering shares
of Common Stock or Rights by book-entry transfer may request that shares of
Common Stock or Rights not purchased be credited to such account maintained at
the Book-Entry Transfer Facility as such shareholder may designate in the box
entitled "Special Payment Instructions". If no such instructions are given, all
such shares of Common Stock or Rights not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated as the
account from which such shares of Common Stock or Rights were delivered.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance may
be directed to the Information Agent or the Dealer Manager at their respective
addresses or telephone numbers set forth below. Additional copies of the Offer
to Purchase, this revised Letter of Transmittal, the revised Notice of
Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 may be obtained from the
Information Agent or the Dealer Manager or from brokers, dealers, commercial
banks, trust companies or other nominees.
9. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such shareholder is not subject to backup withholding of federal income tax. If
a tendering shareholder has been notified by the IRS that such shareholder is
subject to backup withholding, such shareholder must cross out item (2) of the
Certification box of the Substitute Form W-9, unless such shareholder has since
been notified by the IRS that such shareholder is no longer subject to backup
withholding. Failure to provide the information on the Substitute Form W-9 may
subject the tendering shareholder to penalties and to a 31% federal income tax
withholding on the payment of the purchase price of all shares of Common Stock
or Rights purchased from such shareholder. If the tendering shareholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such shareholder should write "Applied For" in the space provided
for the TIN in Part I of the Substitute Form W-9, and sign and date the
Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is
not provided with a TIN within 60 days, the Depositary will withhold 31% on all
payments of the purchase price to such shareholder until a TIN is provided to
the Depositary. If the tendering shareholder completes the box entitled "Special
Payment Instructions", the person to whom payment is to be made, rather than the
tendering shareholder, should complete and sign Substitute Form W-9. All
shareholders surrendering shares of Common Stock pursuant to the Offer should
complete and sign the main signature form and the Substitute Form W-9 (unless an
applicable exemption exists and is proved in a manner satisfactory to the
Purchaser and the Depositary). Non-corporate foreign shareholders should
complete and sign the main signature form and a Form W-8, Certificate of Foreign
Status, a copy of which may be obtained from the Depositary.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing shares of Common Stock or Rights has been lost, destroyed or
stolen, the shareholder should promptly notify the Depositary. The shareholder
will then be instructed as to the steps that must be taken in order to replace
the certificate(s). This revised Letter of Transmittal and related documents
cannot be processed until the procedures for replacing lost or destroyed
certificates have been followed.
IMPORTANT: THIS REVISED LETTER OF TRANSMITTAL OR AN ORIGINAL (BLUE) LETTER
OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY COMPLETED AND DULY EXECUTED, WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR AN AGENT'S MESSAGE (TOGETHER WITH COMMON
STOCK CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED REVISED NOTICE OF
GUARANTEED DELIVERY OR AS ORIGINAL NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER
TO PURCHASE). 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.
12
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered shares of
Common Stock or Rights are accepted for payment is required by law to provide
the Depositary (as payer) with such shareholder's correct TIN on Substitute
Form W-9 below. If such shareholder is an individual, the TIN is such
shareholder's social security number. If the Depositary is not provided with the
correct TIN, the shareholder may be subject to a $50 penalty imposed by the IRS.
In addition, payments that are made to such shareholder with respect to shares
of Common Stock or Rights purchased pursuant to the Offer may be subject to
backup withholding of 31% unless such shareholder complies with certain
reporting or certification procedures or is an "exempt recipient" (i.e., in
general, corporations and certain other entities) under applicable provisions of
the Code and Treasury Regulations promulgated thereunder.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. A foreign shareholder should consult its tax advisor with respect
to the application of withholding rules to it. In order for a foreign individual
to qualify as an exempt recipient, such individual must submit a statement,
signed under penalties of perjury, attesting to such individual's exempt status.
Forms of such statements can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
If backup withholding applies with respect to a shareholder, the Depositary
is required to withhold 31% of any payments made to such shareholder. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the IRS.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to shares of Common Stock or Rights purchased pursuant to the
Offer, the shareholder is required to notify the Depositary of such
shareholder's correct TIN by completing the form below certifying (a) that the
TIN provided on Substitute Form W-9 is correct (or that such shareholder is
awaiting a TIN), and (b) that (i) such shareholder has not been notified by the
IRS that such shareholder is subject to backup withholding as a result of a
failure to report all interest or dividends or (ii) the IRS has notified such
shareholder that such shareholder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the shares of
Common Stock or Rights tendered hereby. If the shares of Common Stock or Rights
are in more than one name or are not in the name of the actual owner, consult
the enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9 for additional guidance on which number to report. If the
tendering shareholder has not been issued a TIN and has applied for a number or
intends to apply for a number in the near future, the shareholder should write
"Applied For" in the space provided for the TIN in Part I, and sign and date the
Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is
not provided with a TIN within 60 days, the Depositary will withhold 31% of all
payments of the purchase price to such shareholder until a TIN is provided to
the Depositary.
13
<PAGE>
<TABLE>
<S> <C> <C>
PAYER'S NAME: CITIBANK, N.A.
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN
FORM W-9 IN THE BOX AT RIGHT AND CERTIFY Social Security Number
DEPARTMENT OF THE BY SIGNING AND DATING BELOW. OR
TREASURY Employer Identification
INTERNAL REVENUE Number
SERVICE (If awaiting TIN write "Applied For")
PART 2 -- For Payees Exempt from Backup Withholding, see the enclosed Guidelines and
complete as instructed therein.
CERTIFICATION Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or a
Taxpayer Identification Number has not been issued to me and either (a) I have mailed
or delivered an application to receive a Taxpayer Identification Number to the
appropriate Internal Revenue Service ("IRS") or Social Security Administration
office or (b) I intend to mail or deliver an application in the near future. I
PAYER'S REQUEST FOR understand that if I do not provide a Taxpayer Identification Number within sixty
TAXPAYER
IDENTIFICATION (60) days, 31% of all reportable payments made to me thereafter will be withheld
NUMBER (TIN) until I provide a number), and
(2) I am not subject to backup withholding because (a) I am exempt from backup
withholding, (b) I have not been notified by the IRS that I am subject to backup
withholding as a result of failure to report all interest or dividends or (c) the
IRS has notified me that I am no longer subject to backup withholding.
SIGNATURE: DATE: , 1999
</TABLE>
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 are no longer subject to backup
withholding, do not cross out item (2). (Also see instructions in the enclosed
Guidelines.)
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR"
IN THE SPACE PROVIDED FOR THE TIN IN PART I OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate IRS
Center or Social Security Administration Office, or (2) I intend to mail or
deliver an application in the near future. I understand that if I do not provide
a Taxpayer Identification Number by the time of payment, 31% of all reportable
payments made to me will be withheld.
SIGNATURE ___________________________________________ DATE: ___________, 1999
14
<PAGE>
Questions and requests for assistance or additional copies of the Offer to
Purchase, Supplement No. 2, the revised Letter of Transmittal and other tender
offer materials may be directed to the Information Agent as set forth below:
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
UNITED STATES
77 Water Street
New York, New York 10005
CALL TOLL-FREE: (800) 714-3305
or
(212) 269-5550 (call collect)
EUROPE
Royex House, Aldermanbury Square
London, England EC2V 7HR
(44) 171 600 5005 (call collect)
THE DEALER MANAGER FOR THE OFFER IS:
CHASE SECURITIES INC.
270 Park Avenue
New York, New York 10017
Telephone: (212) 270-3298
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(Including the Associated Junior Participating Stock Purchase Rights)
of
ASARCO INCORPORATED
Pursuant to the Offer to Purchase Dated September 27, 1999 as amended and
supplemented by
Supplement No. 1 Dated October 8, 1999 and Supplement No. 2 Dated October 26,
1999
to
ASMEX CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
GRUPO MEXICO, S.A. DE C.V.
(not to be used for signature guarantees)
This revised Notice of Guaranteed Delivery or the original (grey) Notice of
Guaranteed Delivery previously distributed or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) if certificates
representing shares of common stock, without par value (the "Common Stock"),
and/or Rights (as defined in the Offer to Purchase) (each a "Certificate") of
ASARCO Incorporated, a New Jersey corporation, are not immediately available, if
the procedure for book-entry transfer cannot be completed prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase), or if time
will not permit all required documents to reach the Depositary prior to the
Expiration Date. Such form may be delivered by hand, transmitted by facsimile
transmission or mailed to the Depositary. See Section 3 of the Offer to
Purchase.
THE DEPOSITARY FOR THE OFFER IS:
CITIBANK, N.A.
<TABLE>
<S> <C> <C>
BY COURIER: BY MAIL: BY HAND:
Citibank, N.A. Citibank, N.A. Citibank, N.A.
915 Broadway P.O. Box 685 Corporate Trust Window
5th Floor Old Chelsea Station 111 Wall Street, 5th Floor
New York, New York 10010 New York, New York 10113 New York, New York 10043
</TABLE>
DELIVERY OF THIS REVISED NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE
TRANSMISSION OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to ASMEX Corporation, a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Grupo Mexico, S.A. de C.V., a
Mexican corporation, upon the terms and subject to the conditions set forth in
Purchaser's Offer to Purchase dated September 27, 1999 as amended and
supplemented by Supplement No. 1 dated October 8, 1999 and Supplement No. 2
dated October 26, 1999 (such Offer to Purchase, as amended and supplemented, the
"Offer to Purchase") and the related revised (yellow) Letter of Transmittal,
receipt of which is hereby acknowledged, the number of shares of common stock,
without par value (the "Common Stock") and/or Rights (as defined in the Offer to
Purchase), set forth below, of ASARCO Incorporated, a New Jersey corporation,
pursuant to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase.
<TABLE>
<S> <C>
Number of shares of Common Stock: Number of Rights
- ------------------------------------------- -------------------------------------------
Certificate Nos. (if available): Certificate Nos. (if available):
- ------------------------------------------- -------------------------------------------
- ------------------------------------------- -------------------------------------------
Book-Entry Transfer Facility Book-Entry Transfer Facility
Account Number: Account Number:
- ------------------------------------------- -------------------------------------------
Dated: Dated:
, 1999 , 1999
Name(s) of Record Holder(s): Name(s) of Record Holder(s):
- ------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
(Please Print) (Please Print)
Address(es): Address(es):
------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
------------------------------------------- -------------------------------------------
(Zip Code) (Zip Code)
Area Code and Tel. No.: Area Code and Tel. No.:
- ------------------------------------------- -------------------------------------------
- ------------------------------------------- -------------------------------------------
Signature(s): Signature(s):
- ------------------------------------------- -------------------------------------------
- ------------------------------------------- -------------------------------------------
</TABLE>
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, guarantees to deliver to the Depositary
either Certificates, in proper form for transfer, or confirmation of book-entry
transfer of such shares into the Depositary's account at The Depository Trust
Company, in each case with delivery of a properly completed and duly executed
original (blue) Letter of Transmittal or revised (yellow) Letter of Transmittal
(or facsimile thereof), with any required signature guarantees, or an Agent's
Message (as defined in the Offer to Purchase), and any other documents required
by the original (blue) Letter of Transmittal or revised (yellow) Letter of
Transmittal, within three New York Stock Exchange trading days after the date
hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the original (blue) Letter of
Transmittal or revised (yellow) Letter of Transmittal and Certificates to the
Depositary within the time period shown herein. Failure to do so could result in
a financial loss to such Eligible Institution.
<TABLE>
<S> <C>
Name of Firm:
(Authorized Signature)
Address: Title:
Name:
(Zip Code) (Please Print)
Dated: , 1999
Area Code and Tel. No.
</TABLE>
NOTE: DO NOT SEND CERTIFICATES WITH THIS NOTICE. CERTIFICATES SHOULD BE SENT
ONLY WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED JUNIOR PARTICIPATING
STOCK PURCHASE RIGHTS)
OF
ASARCO INCORPORATED
AT
$29.75 NET PER SHARE IN CASH
BY
ASMEX CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
GRUPO MEXICO, S.A. DE C.V.
THE EXPIRATION DATE OF THE OFFER HAS BEEN EXTENDED SUCH THAT THE OFFER AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON TUESDAY, NOVEMBER 9, 1999, UNLESS THE OFFER IS FURTHER EXTENDED.
October 26, 1999
TO BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
We have been engaged by ASMEX Corporation, a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Grupo Mexico, S.A. de C.V., a
Mexican corporation ("Parent"), to act as Dealer Manager in connection with
Purchaser's offer to purchase all outstanding shares of common stock, without
par value (the "Common Stock"), of ASARCO Incorporated, a New Jersey corporation
("ASARCO"), including the associated junior participating preferred stock
purchase rights (including any successors thereto, the "Rights"), at a price of
$29.75 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
September 27, 1999 as amended and supplemented by Supplement No. 1 dated
October 8, 1999, as amended and supplemented by Supplement No. 2 dated
October 26, 1999 ("Supplement No. 2") (such Offer to Purchase, as amended and
supplemented, the "Offer to Purchase"), and in the related revised (yellow)
Letter of Transmittal (which, together with any amendments or supplements
thereto, constitute the "Offer") enclosed herewith. Unless the context otherwise
requires, all references herein to the Common Stock shall include the associated
Rights.
If a shareholder desires to tender shares of Common Stock pursuant to the
Offer and such shareholder's Common Stock Certificates (as defined in the Offer
to Purchase), and if applicable, Rights Certificates (as defined in the Offer to
Purchase), are not immediately available or time will not permit all required
documents to reach the Depositary (as defined in the Offer to Purchase) prior to
the Expiration Date (as defined in the Offer to Purchase) or the procedure for
book-entry transfer cannot be completed on a timely basis, such shares of Common
Stock may nevertheless be tendered pursuant to the guaranteed delivery procedure
described in "Procedures for Tendering Shares of Common Stock" of the Offer to
Purchase. See Instruction 2 of the Letter of Transmittal. Delivery of documents
to a Book-Entry Transfer Facility (as defined in the Offer to Purchase) in
accordance with the Book-Entry Transfer Facility's procedures does not
constitute delivery to the Depositary.
Tendering shareholders may continue to use the original (blue) Letter of
Transmittal and the original (grey) Notice of Guaranteed Delivery previously
circulated with the Offer to Purchase, or may use the
<PAGE>
revised (yellow) Letter of Transmittal and the revised (salmon) Notice of
Guaranteed Delivery circulated with Supplement No. 2. While the original (blue)
Letter of Transmittal previously circulated with the Offer to Purchase refers
only to the Offer to Purchase, shareholders using such document to tender their
shares of Common Stock will nevertheless be deemed to be tendering pursuant to
the amended offer (including the amendments and supplements made by Supplement
No. 2) and will receive $29.75 for each share of Common Stock validly tendered
and not properly withdrawn if shares of Common Stock are accepted for payment
and paid for by the Purchaser pursuant to the Offer.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT
NUMBER OF SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED RIGHTS) OF ASARCO
WHICH, TOGETHER WITH SHARES OF COMMON STOCK OWNED BY PARENT AND PURCHASER,
CONSTITUTE AT LEAST 80% OF THE SHARES OF COMMON STOCK OUTSTANDING AND (2) THE
OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS DESCRIBED IN SECTION 7 OF
SUPPLEMENT NO. 2. THE OFFER IS NOT CONDITIONED UPON PURCHASER OBTAINING
FINANCING.
For your information and for forwarding to your clients for whom you hold
shares of Common Stock registered in your name or in the name of your nominee,
or who hold shares of Common Stock in their own name we are enclosing the
following documents:
1. Supplement No. 2 dated October 26, 1999;
2. The revised (yellow) Letter of Transmittal to be used by holders of
shares in accepting the Offer and tendering shares of Common Stock and
Rights;
3. The revised (salmon) Notice of Guaranteed Delivery to be used to
accept the Offer if the certificates evidencing such shares of Common Stock
and Rights are not immediately available or time will not permit all
required documents to reach the Depositary prior to the Expiration Date or
if the procedure for book-entry transfer cannot be completed on a timely
basis;
4. A letter which may be sent to your clients for whose accounts you
hold shares of Common Stock registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer;
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
6. A return envelope addressed to the Depositary.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, shares of Common Stock validly tendered and not
properly withdrawn if, as and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance of such shares of Common Stock for payment.
Payment for shares of Common Stock accepted pursuant to the Offer will be made
by deposit of the purchase price therefor with the Depositary, which will act as
agent for tendering shareholders for the purpose of receiving payments from
Purchaser and transmitting payments to such tendering shareholders. Under no
circumstances will interest on the purchase price for shares of Common Stock be
paid by Purchaser, regardless of any delay in making such payment. Upon the
deposit of funds with the Depositary for the purpose of making payments to
tendering shareholders, Purchaser's obligation to make such payment shall be
satisfied and tendering shareholders must thereafter look solely to the
Depositary for payment of amounts owed to them by reason of the acceptance for
payment of shares of Common Stock pursuant to the Offer. Purchaser will pay any
stock transfer taxes incident to the transfer to it of validly tendered shares
of Common Stock, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, as well as any charges and expenses of the Depositary and the
Information Agent.
2
<PAGE>
Neither Parent nor Purchaser will not pay any fees or commissions to any
broker or dealer or any other person (other than the Dealer Manager and the
Information Agent as described in "Fees and Expenses" of the Offer to Purchase)
in connection with the solicitation of tenders of shares of Common Stock and
Rights pursuant to the Offer. Purchaser will, however, upon request, reimburse
you for customary mailing and handling expenses incurred by you in forwarding
the enclosed materials to your clients.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 9, 1999, UNLESS THE OFFER IS
EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates evidencing the tendered shares of Common Stock, and
Rights, if applicable, should be delivered or such shares of Common Stock and
Rights should be tendered by book-entry transfer, all in accordance with the
Instructions set forth in the Letter of Transmittal and the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional information may be obtained from, the Dealer Manager or the
Information Agent at their respective addresses and telephone numbers set forth
on the back cover page of Supplement No. 2.
Very truly yours,
CHASE SECURITIES INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF PARENT, PURCHASER, THE DEALER MANAGER, THE
INFORMATION AGENT, THE DEPOSITARY OR ANY AFFILIATE OF ANY OF THE FOREGOING OR
ANY OTHER PERSON, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR
MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER
THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED JUNIOR PARTICIPATING
PREFERRED STOCK PURCHASE RIGHTS)
OF
ASARCO INCORPORATED
AT
$29.75 NET PER SHARE IN CASH
BY
ASMEX CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
GRUPO MEXICO, S.A. DE C.V.
THE EXPIRATION DATE OF THE OFFER HAS BEEN EXTENDED SUCH THAT THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON TUESDAY, NOVEMBER 9, 1999, UNLESS THE OFFER IS
FURTHER EXTENDED.
October 26, 1999
TO OUR CLIENTS:
Enclosed for your consideration is Supplement No. 2 dated October 26, 1999
("Supplement No. 2") to the Offer to Purchase dated September 27, 1999, as
amended and supplemented by Supplement No. 1 dated October 8, 1999 (such Offer
to Purchase, as amended and supplemented, the "Offer to Purchase") and the
related revised (yellow) Letter of Transmittal (which, as amended or
supplemented from time to time, together constitute the "Offer") in connection
with the offer by ASMEX Corporation, a Delaware corporation ("Purchaser"), and a
wholly owned subsidiary of Grupo Mexico, S.A. de C.V., a Mexican corporation
("Parent"), to purchase for cash all outstanding shares of common stock, without
par value (the "Common Stock"), of ASARCO Incorporated, a New Jersey corporation
("ASARCO"), including the associated junior participating preferred stock
purchase rights (including any successor thereto, the "Rights"), at a price of
$29.75 per share of Common Stock, net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer.
Unless the context otherwise requires, all references to the Common Stock shall
include the associated Rights.
If a shareholder desires to tender shares of Common Stock pursuant to the
Offer and such shareholder's Common Stock Certificates (as defined in the Offer
to Purchase), and if applicable, Rights Certificates (as defined in the Offer to
Purchase), are not immediately available or time will not permit all required
documents to reach the Depositary (as defined in the Offer to Purchase) prior to
the Expiration Date (as defined in the Offer to Purchase) or the procedure for
book-entry transfer cannot be completed on a timely basis, such shares of Common
Stock may nevertheless be tendered pursuant to the guaranteed delivery procedure
described in "Procedures for Tendering Shares of Common Stock" of the Offer to
Purchase. See Instruction 2 of the Letter of Transmittal. Delivery of documents
to a Book-Entry Transfer Facility (as defined in the Offer to Purchase) in
accordance with the Book-Entry Transfer Facility's procedures does not
constitute delivery to the Depositary.
THE MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES OF
COMMON STOCK HELD BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE
THE HOLDER OF RECORD OF SHARES OF COMMON STOCK HELD BY US FOR YOUR ACCOUNT. A
TENDER OF SUCH SHARES OF COMMON STOCK CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE REVISED (YELLOW) LETTER OF
TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
<PAGE>
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES OF COMMON STOCK HELD
BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the shares of Common Stock held by us for your account,
upon the terms and subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The Offer price is $29.75 per share, net to the seller in cash,
without interest thereon.
2. The Offer is being made for all outstanding shares of Common Stock.
3. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on November 9, 1999, unless the Offer is extended.
4. The offer is conditioned upon, among other things, (1) there being
validly tendered and not properly withdrawn prior to the expiration of the
offer that number of shares of Common Stock (including the associated
Rights) which, together with shares of Common Stock owned by Parent and
Purchaser, constitute at least 80% of the shares of Common Stock outstanding
and (2) the Offer is also subject to certain other conditions described in
Section 7 of Supplement No. 2. The Offer is not conditioned upon Parent or
Purchaser obtaining financing.
5. Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of shares of Common Stock
by Purchaser pursuant to the Offer.
The Offer is not being made to, nor will tenders be accepted from, or on
behalf of, holders of shares of Common Stock in any jurisdiction in which the
making or acceptance of the Offer would not be in compliance with the laws of
such jurisdiction. In any jurisdiction where the securities or blue sky laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed made on behalf of the Purchaser by the Dealer Manager or one or more
registered brokers or dealers that are licensed under the laws of such
jurisdiction.
If you wish to have us tender any or all of your shares of Common Stock,
please so instruct us by completing, executing and returning to us the
instruction form contained in this letter. An envelope to return your
instructions to us is enclosed. If you authorize the tender of your shares, all
such shares will be tendered unless otherwise specified on the instruction form
set forth in this letter. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE
TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF
THE OFFER.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED JUNIOR PARTICIPATING
STOCK PURCHASE RIGHTS)
OF
ASARCO INCORPORATED
The undersigned acknowledge(s) receipt of your letter, the Offer to Purchase
dated September 27, 1999, as amended and supplemented by Supplement No. 1 dated
October 8, 1999, Supplement No. 2 dated October 26, 1999 and the related revised
(yellow) Letter of Transmittal (which, as amended or supplemented from time to
time, together constitute the "Offer") in connection with the Offer by ASMEX
Corporation, a Delaware corporation ("Purchaser") and a wholly owned subsidiary
of Grupo Mexico, S.A. de C.V., a Mexican corporation, to purchase all
outstanding shares of common stock, without par value per share (the "Common
Stock"), of ASARCO Incorporated, a New Jersey corporation, including the
associated junior participating preferred stock purchase rights (including any
successor thereto, the "Rights"), at a price of $29.75 per share of Common
Stock, net to the seller in cash, without interest thereon, upon the terms and
conditions set forth in the Offer. Unless the context otherwise requires, all
references to shares of Common Stock shall include the associated Rights.
This will instruct you to tender to Purchaser the number of shares of Common
Stock and Rights indicated below (or if no number is indicated in either of the
appropriate spaces below, all shares of Common Stock and Rights) held by you for
the account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
<TABLE>
<S> <C>
Number of shares of Common Stock to be tendered:* Number of Rights to be tendered (to be filled out
only if a Distribution Date has occurred and Rights
Certificates have been delivered prior to the tender
of your Common Stock):*
- ------------------------------------------- -------------------------------------------
Account Number: Account Number:
Dated: , 1999 Dated: , 1999
SIGN HERE SIGN HERE
- ------------------------------------------- -------------------------------------------
- ------------------------------------------- -------------------------------------------
PRINT NAME(S) PRINT NAME(S)
- ------------------------------------------- -------------------------------------------
- ------------------------------------------- -------------------------------------------
ADDRESS(ES) ADDRESS(ES)
- ------------------------------------------- -------------------------------------------
- ------------------------------------------- -------------------------------------------
- ------------------------------------------- -------------------------------------------
- ------------------------------------------- -------------------------------------------
AREA CODE AND TELEPHONE NUMBER AREA CODE AND TELEPHONE NUMBER
- ------------------------------------------- -------------------------------------------
TAX ID OR SOCIAL SECURITY NUMBER TAX ID OR SOCIAL SECURITY NUMBER
- ------------------------------------------- -------------------------------------------
</TABLE>
* Unless otherwise indicated, it will be assumed that all shares of Common Stock
and Rights held by us for your account are to be tendered.
3
<PAGE>
[LOGO]
GRUPOMEXICO
Av. Baja California #200, Mexico City 06760
FOR IMMEDIATE RELEASE
---------------------
CONTACTS
- --------
GRUPO MEXICO, S.A. de C.V.
Daniel Tellechea
011-525-574-8483
Eduardo Gonzalez
011-525-574-8422
ABERNATHY MacGREGOR FRANK
Chuck Burgess
212-371-5999
GRUPO MEXICO AND ASARCO SIGN MERGER AGREEMENT
COMBINATION WILL CREATE LEADING INTERNATIONAL MINING COMPANY
MEXICO CITY, October 25, 1999 -- Grupo Mexico, S.A. de C.V. today announced
that it has signed a definitive merger agreement with ASARCO Incorporated
(NYSE:AR) under which Grupo Mexico will acquire ASARCO for $29.75 in cash net
per share of ASARCO common stock. Including the assumption of $1.02 billion
ASARCO debt, the transaction has a total value of approximately $2.25 billion.
German Larrea, chairman and chief executive officer of Grupo Mexico, said, "A
combination of Grupo Mexico and ASARCO will create a world-class
international mining company with high-quality assets and an enhanced
competitive position. Our operations are extremely complementary, and we look
forward to working with ASARCO to integrate them seamlessly."
Grupo Mexico also announced today that, in addition to increasing the offer
price to $29.75 per share, it is extending the expiration date on its
outstanding tender offer until Tuesday, November 9, 1999, at 12:00 midnight
New York City
- more -
<PAGE>
time. The tender offer previously had been scheduled to expire on Monday,
October 25, 1999, at 12:00 midnight New York City time. As of 5:00 P.M. New
York City time on October 22, 1999, 2,684,820 shares of Common Stock had been
tendered to Purchaser under the terms of the Offer.
Grupo Mexico will promptly be filing with the Securities and Exchange
Commission and distributing to ASARCO shareholders a supplement to its Offer
to Purchase reflecting the increase in the tender offer price to $29.75 and
setting forth the material terms of the transaction.
Chase Securities Inc. served as financial advisor to Grupo Mexico and is
arranging the financing for the transaction. Brown & Wood LLP and
Santamarina y Steta served as legal advisors to Grupo Mexico.
Grupo Mexico is a diversified mining company that ranks among the world's
largest and lowest-cost copper, zinc and silver producers. The Company's
operations include mining, smelting and refining. Grupo Mexico also owns 74%
and operates in partnership with Union Pacific (26%) the largest and most
profitable railroad in Mexico.
NOTE: Statements in this press release include "forward-looking statements"
that express expectations of future events or results. All statements based
on future expectations rather than on historical facts are forward-looking
statements that involve a number of risks and uncertainties, and the company
cannot give assurance that such statements will prove to be correct.
###
<PAGE>
[LOGO] CHASE
THE CHASE MANHATTAN BANK CHASE SECURITIES INC.
270 Park Avenue 270 Park Avenue
New York, New York 10017 New York, New York 10017
October 22, 1999
ASMEX Corporation
Senior Secured Credit Facilities
Fourth Amended and Restated Commitment Letter
Grupo Mexico, S.A. de C.V.
Baja California 200
Colonia Roma Sur
Mexico, D.F. Mexico
06760
Attention: Daniel Tellechea
Ladies and Gentlemen:
This Fourth Amended and Restated Commitment Letter hereby, subject
to the terms and conditions set forth herein, amends and restates the Third
Amended and Restated Commitment Letter dated October 15, 1999 (the "THIRD
AMENDED AND RESTATED COMMITMENT"), among Grupo Mexico, Chase and CSI (each as
defined below). You have advised The Chase Manhattan Bank ("CHASE") and Chase
Securities Inc. ("CSI") that ASMEX Corporation, a Delaware corporation (the
"Borrower"), a wholly-owned subsidiary of Grupo Mexico, S.A. de C.V., a Mexican
corporation ("GRUPO MEXICO"), intends to make a cash tender offer (the "TENDER
OFFER") for common stock of Asarco Incorporated, a New Jersey corporation
("Asarco"), representing at least 80% of the ordinary voting power of all of the
shares of capital stock of Asarco on a fully diluted basis (including stock of
Asarco owned by Grupo Mexico and
<PAGE>
2
subsidiaries prior to the Tender Offer), to be followed by the merger of the
Borrower into Asarco, with Asarco thereby becoming a wholly-owned subsidiary of
Grupo Mexico.
We understand that to provide funds for the Tender Offer and to
pay related fees and expenses, Grupo Mexico requires that senior secured
financing be made available to the Borrower in the amount of up to $823 million
(the "A TENDER FACILITY"). We further understand that, following the successful
completion of the Tender Offer, the Borrower is to be merged into Asarco with
Asarco thereby becoming a wholly-owned subsidiary of Grupo Mexico (the "MERGER"
and, together with the Tender Offer, the "TRANSACTIONS"), and that (whether or
not the Merger is immediately effected) Grupo Mexico will require senior
financing for Asarco (the "R/C FACILITIES") in an aggregate amount equal to $250
million in order to refinance certain indebtedness of Asarco and to provide
funds for ongoing general corporate purposes. The A Tender Facility and the R/C
Facilities are herein collectively referred to as the "FACILITIES".
In that connection, you have requested that CSI agree to
structure, arrange and syndicate the Facilities, and that Chase commit to
provide the entire principal amount of the Facilities and to serve as
administrative agent for the Facilities.
CSI is pleased to advise you that it is willing to act as
exclusive advisor, lead arranger and book manager for the Facilities.
Furthermore, Chase is pleased to advise you of its commitment to
provide the entire amount of the Facilities upon the terms and subject to the
conditions set forth or referred to in this fourth amended and restated
commitment letter (the "FOURTH AMENDED AND RESTATED COMMITMENT LETTER"), in the
Fourth Amended and Restated Summary of Terms and Conditions attached hereto as
Exhibit A (the "TERM SHEET") and in the Amended and Restated Fee Letter dated
October 15, 1999 (the "AMENDED AND RESTATED FEE LETTER"). We intend to syndicate
the Facilities to a group of financial institutions (together with Chase, the
"LENDERS") identified by us in consultation with you. Chase shall be relieved of
its obligation to provide the entire amount of the Facilities to the extent that
the offers of Lenders other than Chase to provide any portion of the Facilities
are accepted.
CSI intends to commence syndication efforts promptly, and you
agree actively to assist CSI in its efforts to complete a syndication
satisfactory to it prior to the Tender Closing Date referred to in the Term
Sheet. Such assistance shall include (a) your using commercially reasonable
efforts to ensure that the syndication efforts benefit materially from your
existing lending relationships, (b) direct contact between senior management and
advisors of yourselves and the Borrower and the proposed Lenders, (c) assistance
in the preparation of a Confidential Information Memorandum and other marketing
materials to be used in connection with the syndication and (d) the hosting,
with CSI, of one or more meetings of prospective Lenders.
It is agreed that Chase will act as the sole and exclusive
Administrative Agent for the Facilities and as the Collateral Agent in
connection with the Facilities, and that CSI will act as the sole and exclusive
advisor, arranger and book manager for the Facilities, and each will, in such
capacities, perform the duties and exercise the authority customarily performed
and exercised by it in such roles. You agree that no other agents, co-agents,
arrangers or book
<PAGE>
3
managers will be appointed, no other titles will be awarded and no compensation
(other than that expressly contemplated by the Term Sheet and the Amended and
Restated Fee Letter referred to below) will be paid in connection with the
Facilities unless you and we shall so agree.
CSI will (in consultation with you) manage all aspects of the
syndication, including decisions as to the selection of institutions to be
approached and when they will be approached, when their commitments will be
accepted, which institutions will participate, the allocations of the
commitments among the Lenders and the amount and distribution of fees among the
Lenders. To assist CSI in its syndication efforts, you agree promptly to prepare
and provide to CSI and Chase all information with respect to Grupo Mexico, Grupo
Minero Mexico, S.A. de C.V., a Mexican corporation ("GMM") , the Borrower and
their respective subsidiaries, the Transactions and the other matters
contemplated hereby, including all financial information and projections (the
"PROJECTIONS"), as we may reasonably request in connection with the arrangement
and syndication of the Facilities. You hereby represent and covenant that (a)
all information other than the Projections (the "INFORMATION") that has been or
will be made available to Chase or CSI by you or any of your representatives is
or will be, when furnished, complete and correct in all material respects and
does not or will not, when furnished, 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 (b) the Projections that have been or will be
made available to Chase or CSI by you or any of your representatives have been
or will be prepared in good faith based upon reasonable assumptions. You
understand that in arranging and syndicating the Facilities we may use and rely
on the Information and Projections without independent verification thereof.
As consideration for Chase's commitment hereunder and CSI's
agreement to perform the services described herein, you agree to pay and to
cause the Borrower to pay to Chase the non-refundable fees set forth in Annex I
to the Term Sheet and in the Amended and Restated Fee Letter.
Chase's commitment hereunder and CSI's agreement to perform the
services described herein are subject to
(a) (i) there not occurring or becoming known to us any material
adverse condition or material adverse change in or affecting the
business, operations, property or financial condition of Grupo Mexico and
its subsidiaries, GMM and its subsidiaries, or Asarco and its
subsidiaries, in each case taken as a whole, which (in the case of Asarco
and its subsidiaries) is not already disclosed and publicly available or
otherwise known by any of our officers who is working with you on the
Transactions; PROVIDED, HOWEVER, that any adverse effect that copper
prices have had or may have on the business, operations, property or
financial condition of Grupo Mexico and its subsidiaries, GMM and its
subsidiaries, or Asarco and its subsidiaries, in each case taken as a
whole, shall not be deemed to be such a material adverse condition or
material adverse change for purposes of this clause (a)(i); and (ii) our
not becoming aware after September 24, 1999, of any information or other
matter affecting Grupo Mexico and its subsidiaries, GMM
<PAGE>
4
and its subsidiaries, Asarco and its subsidiaries, in each case taken as
a whole, or the transactions contemplated hereby which is inconsistent in
a material and adverse manner with any such information or other matter
disclosed to us prior to September 24, 1999, and which (in the case of
Asarco and its subsidiaries) is not already disclosed and publicly
available or otherwise known by any of our officers who is working with
you on the Transactions,
(b) there shall not have been any statute, rule, regulation,
judgment, order or injunction promulgated, entered, enforced, enacted,
issued or applicable to the Tender Offer or the Merger by any domestic or
foreign federal or state governmental regulatory or administrative agency
or authority or court or legislative body or commission which (i)
prohibits, or imposes any material limitations on, Grupo Mexico's or
Asmex' ownership or operation of all or a material portion of Asarco's
businesses or assets, (ii) prohibits, or makes illegal the acceptance for
payment, payment for or purchase of Asarco common stock or the
consummation of the Tender Offer or the Merger, (iii) results in a
material delay in or restricts the ability of Grupo Mexico, or renders
Grupo Mexico unable, to accept for payment, pay for or purchase some or
all of the tendered shares of Asarco common stock, or (iv) imposes
material limitations on the ability of Asmex or Grupo Mexico effectively
to exercise full rights of ownership of the Asarco common stock,
including, without limitation, the right to vote the Asarco common stock
purchased by it on all matters properly presented to Asarco's
shareholders,
(c) there not having occurred (i) after the date hereof to
December 18, 1999, a general banking moratorium established by Federal or
state authorities, a generally recognized capital markets crisis, as
evidenced by a cumulative 20% decline in the Dow Jones Industrial Average
over a period of five (5) consecutive trading days, or a virtual
cessation in bank and other private debt financings or the introduction
of additional material government restrictions imposed upon lending
institutions which materially affect the type of transactions
contemplated thereby, and (ii) after December 18, 1999, a material
disruption of or material adverse change in U.S. or developed country
financial, banking or capital market conditions that, in our judgment, is
reasonably likely to materially impair the syndication of the Facilities,
(d) our satisfaction that prior to and during the syndication of
the Facilities there shall be no competing offering, placement or
arrangement of any debt securities or bank financing by or on behalf of
Grupo Mexico or any affiliate thereof,
(e) in the case of the A Tender Facility, our satisfaction with
the conditions of the Tender Offer which will include, in any event
(unless otherwise satisfied in connection with the definitive Merger
agreement with Asarco), (i) invalidation, redemption or other
inapplicability of the rights issued under Asarco's Shareholder Rights
Agreement dated as of January 28, 1998, as amended, (ii) invalidation or
satisfaction of the requirements of Article 7 of Asarco's Restated
Certificate of Incorporation with respect to the Transactions such that
following consummation of the Tender Offer the Merger may be consummated
without the affirmative vote of the holders of any Asarco shares other
than
<PAGE>
5
the Borrower, (iii) invalidity, inapplicability or satisfaction (if
necessary) of Article 10 of Asarco's Restated Certificate of
Incorporation with respect to the Transactions or the Facilities, (iv)
satisfaction or inapplicability of the requirements of Section 14A:10A of
the New Jersey Business Corporation Act with respect to the Merger such
that following consummation of the Tender Offer the Merger may be
consummated without the affirmative vote of the holders of any Asarco
shares other than the Borrower and (v) obtaining all regulatory approvals
and consents (including Hart-Scott-Rodino and other approvals or
consents, if any) necessary to effect the Transactions,
(f) in the case of the R/C Facilities, prior or concurrent
disbursement of the A Tender Facility, successful consummation of the
Tender Offer and our satisfaction with the terms and conditions of the
definitive Merger agreement,
(g) the negotiation, execution and delivery on or prior to the
Tender Closing Date of definitive documentation with respect to the
Facilities satisfactory to all parties, and
(h) the other conditions set forth or referred to in the Term
Sheet.
The terms and conditions of Chase's commitments hereunder and of the Facilities
are not limited to those set forth herein and in the Term Sheet and Amended and
Restated Fee Letter. Those matters that are not covered by the provisions hereof
and of the Term Sheet are subject to the approval and agreement of Chase, CSI
and Grupo Mexico. Notwithstanding the foregoing, the Term Sheet and Amended and
Restated Fee Letter are intended to reflect all material closing conditions,
representations and warranties, covenants and events of default, subject
however, in each case, to such additional provisions as shall be appropriate to
take into account developments after September 24, 1999.
You agree (a) to indemnify and hold harmless Chase, CSI, their
affiliates and their respective officers, directors, employees, advisors, and
agents (each, an "INDEMNIFIED PERSON") from and against any and all losses,
claims, damages and liabilities to which any such indemnified person may become
subject arising out of or in connection with this Fourth Amended and Restated
Commitment Letter, the Facilities, the use of the proceeds thereof, the
Transactions or any related transaction or any claim, litigation, investigation
or proceeding relating to any of the foregoing, regardless of whether any
indemnified person is a party thereto, and to reimburse each indemnified person
upon demand for any legal or other expenses incurred in connection with
investigating or defending any of the foregoing, PROVIDED that the foregoing
indemnity will not, as to any indemnified person, apply to losses, claims,
damages, liabilities or related expenses to the extent they are found by a
final, non-appealable judgment of a court to arise from the willful misconduct
or gross negligence of such indemnified person, and (b) to reimburse Chase, CSI
and their affiliates on demand for all reasonable and documented out-of-pocket
expenses (including due diligence expenses, syndication expenses, consultant's
fees and expenses, travel expenses, and reasonable fees, charges and
disbursements of counsel) incurred in connection with the Facilities and any
related documentation (including this Fourth Amended and Restated Commitment
Letter, the Term Sheet, the Amended and Restated Fee Letter and the definitive
financing documentation) or (without duplication of fees or costs for
administrative services covered in the Amended and Restated Fee Letter) the
administration, amendment,
<PAGE>
6
modification or waiver thereof. No indemnified person shall be liable for any
damages arising from the use by others of Information or other materials
obtained through electronic, telecommunications or other information
transmission systems, or for any special, indirect, consequential or punitive
damages in connection with the Facilities.
You acknowledge that Chase and/or CSI may be providing debt
financing, equity capital or other services (including financial advisory
services) to other companies in respect of which you may have conflicting
interests regarding the transactions described hereby and otherwise. Neither
Chase nor CSI will use confidential information obtained from you by virtue of
the transactions contemplated hereby or other relationships with you in
connection with the performance by Chase or CSI of services for other companies,
and neither Chase nor CSI will furnish any such information to other companies.
You also acknowledge that neither Chase nor CSI has any obligation to use in
connection with the transactions contemplated hereby, or to furnish to you,
confidential information obtained from other companies.
This Fourth Amended and Restated Commitment Letter shall not be
assignable by you without the prior written consent of Chase and CSI (and any
purported assignment without such consent shall be null and void), is intended
to be solely for the benefit of the parties hereto and is not intended to confer
any benefits upon, or create any rights in favor of, any person other than the
parties hereto. This Fourth Amended and Restated Commitment Letter may not be
amended or waived except by an instrument in writing signed by you, Chase and
CSI. This Fourth Amended and Restated Commitment Letter may be executed in any
number of counterparts, each of which shall be an original, and all of which,
when taken together, shall constitute one agreement. Delivery of an executed
signature page of this Fourth Amended and Restated Commitment Letter by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. This Fourth Amended and Restated Commitment Letter and the
Amended and Restated Fee Letter set forth the entire understanding of the
parties with respect thereto. This Fourth Amended and Restated Commitment Letter
shall be governed by, and construed in accordance with, the laws of the State of
New York.
This Fourth Amended and Restated Commitment Letter is delivered to
you on the understanding that neither this Fourth Amended and Restated
Commitment Letter, the Term Sheet or the Amended and Restated Fee Letter nor any
of their terms or substance shall be disclosed, directly or indirectly, to any
other person except (a) to your officers, agents and advisors who are directly
involved in the consideration of this matter or (b) as may be compelled in a
judicial or administrative proceeding or as otherwise required by law (in which
case you agree to inform us promptly thereof), PROVIDED, that the foregoing
restrictions shall cease to apply (except in respect of the Amended and Restated
Fee Letter and its terms and substance) after this Fourth Amended and Restated
Commitment Letter has been accepted by you.
The compensation, reimbursement, indemnification and
confidentiality provisions contained herein and in the Amended and Restated Fee
Letter shall remain in full force and effect regardless of whether definitive
financing documentation shall be executed and delivered and notwithstanding the
termination of this Fourth Amended and Restated Commitment Letter or Chase's
commitments hereunder.
<PAGE>
7
If the foregoing correctly sets forth our agreement, please
indicate your acceptance of the terms hereof and of the Term Sheet by returning
to us executed counterparts hereof not later than 11:59 p.m., New York City
time, on October 22, 1999 (at which time this Fourth Amended and Restated
Commitment Letter shall expire if not executed and delivered by you). Further,
this Fourth Amended and Restated Commitment Letter and the amendments of the
Third Amended and Restated Commitment and the Summary of Terms and Conditions
attached thereto as Exhibit A set forth herein and in the Term Sheet shall not
become effective UNLESS Grupo Mexico and Asarco execute and deliver a definitive
Merger agreement satisfactory to Chase and CSI, not later than 5:00 p.m., New
York City time, on October 25, 1999.
Chase and CSI are pleased to have been given the opportunity to
assist you in connection with this important financing.
Upon the effectiveness of this Fourth Amended and Restated
Commitment Letter, references in the Amended and Restated Fee Letter to the
"Third Amended and Restated Commitment Letter" shall mean the Third Amended and
Restated Commitment, as amended and restated hereby. Except as set forth in the
preceding sentence, the Amended and Restated Fee Letter shall remain unmodified
and in full force and effect.
Very truly yours,
THE CHASE MANHATTAN BANK
By:
------------------------------
Name:
Title:
CHASE SECURITIES INC.
By:
------------------------------
Name:
Title:
<PAGE>
8
Accepted and agreed to as of the
date first written above by:
GRUPO MEXICO, S.A. DE C.V.
By:
---------------------------------
Name:
Title:
<PAGE>
Exhibit A
SENIOR SECURED CREDIT FACILITIES
Fourth Amended and Restated Summary of Terms and Conditions
October 22, 1999
AS USED HEREIN, CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN SHALL
HAVE THE RESPECTIVE MEANINGS ASCRIBED TO THEM IN THE FOURTH AMENDED AND RESTATED
COMMITMENT LETTER TO WHICH THIS FOURTH AMENDED AND RESTATED SUMMARY OF TERMS AND
CONDITIONS IS ATTACHED.
This Fourth Amended and Restated Summary of Terms and Conditions
hereby, subject to the terms and conditions set forth in the Amended and
Restated Commitment Letter, amends and restates the Third Amended and Restated
Summary of Terms and Conditions dated October 15, 1999. The following sets
forth the terms and conditions for the senior secured credit facilities that
will be made available to ASMEX Corporation, a Delaware corporation ("ASMEX"),
in connection with Asmex' proposed cash tender offer (the "TENDER OFFER" and,
together with the Merger defined below, the "TRANSACTIONS") for shares of common
stock of Asarco Incorporated (the "SHARES"), a New Jersey corporation
("ASARCO"), representing not less than 80% of the ordinary voting power of all
of the shares of capital stock of Asarco on a fully diluted basis, including
stock of Asarco owned by Grupo Mexico, S.A. de C.V., ("GRUPO MEXICO") and
subsidiaries prior to the Tender Offer (determined in a manner satisfactory to
the Arranger). The conditions precedent to the obligation of Asmex to purchase
the Shares pursuant to the Tender Offer will include, unless otherwise satisfied
in connection with the definitive Merger agreement with Asarco, the following:
(i) invalidation, redemption or other inapplicability of the rights issued under
Asarco's Shareholder Rights Agreement dated as of January 28, 1998, as amended,
(ii) invalidation or satisfaction of the requirements of Article 7 of Asarco's
Restated Certificate of Incorporation with respect to the Transactions such
that, following consummation of the Tender Offer, the Merger can be consummated
without the affirmative vote of the holders of any Asarco shares other than
Asmex, (iii) invalidity, inapplicability or satisfaction (if necessary) of
Article 10 of Asarco's Restated Certificate of Incorporation with respect to the
Transactions or the Facilities, (iv) satisfaction or inapplicability of the
requirements of Section 14A:10A of the New Jersey Business Corporation Act with
respect to the Merger such that following consummation of the Tender Offer the
Merger can be consummated without the affirmative vote of the holders of any
Asarco shares other than Asmex and (v) obtaining all regulatory approvals and
consents (including Hart-Scott-Rodino, and other approvals or consents, if any)
necessary to effect the Transactions. The purchase of shares will be funded
through credit facilities (the "A Tender Facility" referred to below) together
with certain cash from Grupo Minero Mexico, S.A. de C.V. ("GMM") and Grupo
Mexico. Following the purchase of the Shares pursuant to the Tender Offer,
Asmex, a direct wholly-owned subsidiary of Grupo Mexico, is to be merged into
Asarco with Asarco thereby becoming a wholly-owned subsidiary of Grupo Mexico
and with Asarco shareholders receiving solely cash consideration (the "MERGER").
The following also sets forth the terms and conditions for the other senior
credit facilities (the "R/C Facilities" referred to
<PAGE>
2
below) that will be made available to Asarco upon and subsequent to consummation
of the Tender Offer.
<PAGE>
3
I. PARTIES
Borrowers: Under the A Tender Facility, ASMEX
Corporation ("ASMEX") and, after the
Merger, Asarco; and under the R/C
Facilities, Asarco (each of Asmex and
Asarco being sometimes referred to below
as a "BORROWER").
Guarantor(s): Under the A Tender Facility, Grupo
Mexico; and under the R/C Facilities,
Grupo Mexico and, until consummation of
the Merger, Asmex.
Advisor, Lead Arranger
and Book Manager: Chase Securities Inc. (in such capacity,
the "ARRANGER").
Administrative Agent: The Chase Manhattan Bank ("CHASE" and,
in such capacity, the "ADMINISTRATIVE
AGENT").
Lenders: A syndicate of banks, financial
institutions and other entities,
including Chase, arranged by the
Arranger in consultation with Grupo
Mexico (collectively, the "LENDERS").
II. TYPES AND AMOUNTS OF
CREDIT FACILITIES
1. A TENDER FACILITY
Type and Amount of Facility: An aggregate principal amount of up to
$823 million will be available to Asmex
under a senior secured credit facility
(the "A TENDER FACILITY").
Availability: The Loans under the A Tender Facility
(the "A TENDER LOANS") shall be made in
a single drawing on the Tender Closing
Date (as defined below).
Amortization: The A Tender Loans shall be repayable in
full on the date eighteen (18) months
after the Tender Closing Date (the date
on which
<PAGE>
4
the A Tender Loans are repayable, the
"MATURITY DATE").
Purpose: The proceeds of the A Tender Loans shall
be used to purchase Shares.
2. R/C FACILITIES
Type and Amount of Facility: An aggregate principal amount of up to
$250 million will be available to Asarco
subsequent to consummation of the Tender
Offer under a senior secured revolving
credit facility (the "R/C FACILITIES").
Such aggregate principal amount may,
based on the actual amount of eligible
accounts receivable of Asarco available
to secure the R/C Facilities and in the
sole discretion of the Arranger, be
increased provided that the A Tender
Loans are prepaid in an amount equal to
the amount of such increase. Such
aggregate principal amount may, based on
the aggregate principal amount of
Existing R/C Facilities (as defined
below) available to Asarco and remaining
in place subsequent to the consummation
of the Tender Offer, be reduced in an
amount equal to the amount of such
Existing R/C Facilities.
Availability: The Loans under the R/C Facilities (the
"R/C LOANS" and together with the
A Tender Loans, the "LOANS") shall be
available for borrowing, repayment and
reborrowing during the period from the
Tender Closing Date to the date
thirty-three (33) months thereafter.
Termination: The R/C Facilities shall terminate, and
all outstanding R/C Loans shall be
repayable in full, on the date three (3)
years after the Tender Closing Date.
Purpose: The proceeds of the R/C Loans shall be
used (i) to refinance outstanding
indebtedness of Asarco under the
Existing R/C Facilities (as defined
below) and in the event of an increase
in the amount of the R/C Facilities
<PAGE>
5
above $250 million to repay a portion of
outstanding A Tender Loans and (ii) for
working capital purposes of Asarco. The
"EXISTING R/C FACILITIES" means the
credit facilities identified as such by
Grupo Mexico and the Administrative
Agent and which are on terms reasonably
acceptable to the Arranger and Grupo
Mexico. The aggregate principal amount
of the Existing R/C Facilities is
believed to total $800 million and to be
for working capital purposes (based on
publicly available information).
III. CERTAIN PAYMENT PROVISIONS
Fees and Interest Rates: As set forth on Annex I.
Optional Prepayments
and Commitment Reductions: All or a portion of the Loans may be
prepaid at any time and the unutilized
portion of the Facilities may be
terminated in whole or in part (in
minimum amounts to be agreed upon) at
the respective Borrower's option
(except, in the case of the R/C
Facilities prior to the Tender Closing
Date, at the option of Grupo Mexico). A
Tender Loans once prepaid may not be
reborrowed.
Mandatory Prepayments and
Commitment Reductions: The A Tender Loans will be prepaid,
undrawn commitments for A Tender Loans
will be reduced and replaced, and R/C
Loans will be prepaid, in that order, to
the extent of the net cash proceeds
received from the following (in each
case subject to customary exclusions to
be agreed):
-- any asset sales by Asarco and
designated subsidiaries
-- any debt issuances by Asarco (other
than R/C Loans, except for R/C
Loans required to reduce the
A Tender Facility)
<PAGE>
6
-- any equity issuances by Asmex or
Asarco (to any party other than
Asmex or Grupo Mexico)
-- any sale of Asarco stock
-- any proceeds received by Asarco as
a result of the exercise (by
holders) of warrants relating to
shares of Grupo Mexico held in a
trust for the benefit of Asarco
IV. GUARANTEES AND COLLATERAL
Guarantees: (a) All obligations of Asmex (and,
after the Merger, of Asarco) in respect
of the A Tender Facility will be
unconditionally guaranteed by Grupo
Mexico.
(b) All obligations of Asarco in
respect of the R/C Facilities will be
unconditionally guaranteed by Grupo
Mexico until the A Tender Loans are
repaid in full (except as otherwise
noted below in the case of Alternative
R/C Facilities, and provided the
conditions for release of the collateral
for such guarantee obligations have been
met), and by Asmex until consummation of
the Merger.
The Borrowers and guarantors are
collectively referred to herein as
"CREDIT PARTIES."
Collateral: (a) The obligations of Asmex in respect
of the Facilities will be secured by a
perfected first priority security
interest in the Shares at any time owned
by it.
(b) The obligations of Grupo Mexico
under its guarantees of the A Tender
Facility and the R/C Facilities will be
secured by a perfected first priority
security interest in (1) shares of GMM
representing 100% of the outstanding
shares of GMM (other than shares not
exceeding 1.50% held by others)
<PAGE>
7
and (2) all shares of Asarco held by
Grupo Mexico, both immediately prior to
the making of the A Tender Loans
(presently representing approximately
9.8% of the outstanding shares of
Asarco) and after the Merger. In
addition, Grupo Mexico will covenant to
maintain at all times, in support of its
guarantees (so long as they remain in
effect), an amount of unencumbered cash
and short-term authorized money market
investments (to be agreed with the
Arranger, including deposits with
approved banks, which in Mexico shall
include only Banamex and Bancomer) equal
to the lower of (A) 6 months of interest
on the outstanding A Tender Loans and
(B) $100 million.
(c) The obligations of Asarco in
respect of the R/C Facilities will be
secured by accounts receivable of Asarco
(except as otherwise provided below in
the case of "Alternative R/C
Facilities").
The security documentation will provide
that in the event of default and
enforcement or foreclosure at a time
when both Asarco shares and GMM shares
are held as collateral for the defaulted
obligation, the collateral agent will be
instructed to exercise reasonable
efforts (for a period of up to 45 days)
to sell collateral consisting of Asarco
shares before selling collateral
consisting of GMM shares. Further, so
long as any amounts under the A Tender
Facility and the R/C Facilities remain
outstanding, the proceeds of any sale of
collateral consisting of shares shall be
applied: first, to the payment of
interest and principal on the A Tender
Loans and the Alternative R/C Loans (if
any), and second, to the payment of
interest and principal on the R/C Loans.
Certain Releases of Collateral: So long as no Default has occurred and
is continuing:
<PAGE>
8
(a) The pledge of Asarco Shares
securing guarantees of the R/C Loans
will terminate when the A Tender Loans
are repaid in full, PROVIDED that at
such time (i) the R/C Loans and R/C
Facilities are not Alternative R/C Loans
and Alternative R/C Facilities, and (ii)
Asarco is in compliance with its
financial covenant relating to minimum
EBITDA;
(b) The pledge of Asarco Shares
securing guarantees of the Alternative
R/C Loans will terminate when (i) the A
Tender Loans are repaid in full, and
(ii) Asarco's senior unsecured long-term
indebtedness is rated at or above BBB-
by S&P and Baa3 by Moody's;
(c) The pledge of GMM shares securing
Grupo Mexico guarantees of the
Facilities will be reduced pro rata (on
a percentage basis) with reductions (by
repayment) of the outstanding principal
of the A Tender Loans, PROVIDED that
(except as described in clause (d)
below) the percentage of outstanding GMM
shares remaining in pledge as security
for guarantees of the Facilities may not
thereby be reduced below 51% (or such
higher percentage, if any, as is
required for approval of corporate
actions of GMM that are subject to
shareholder consent and for election of
a majority of the Board of Directors of
GMM);
(d) At such time as the outstanding
principal of the A Tender Loans has been
reduced (by repayment) to an amount
equal to or less than 25% of the
original principal amount of the
A Tender Loans, all GMM shares remaining
in pledge as security for guarantees of
the Facilities will be released,
PROVIDED that Asarco's senior unsecured
long-term indebtedness is rated at or
above BBB- by S&P and Baa3 by Moody's.
<PAGE>
9
V. CERTAIN CONDITIONS The availability of the Facilities shall
be conditioned upon satisfaction of,
among other things, the following
conditions precedent (the date upon
which all such conditions precedent
shall be satisfied and the A Tender
Facility is first utilized being herein
called the "TENDER CLOSING DATE") and
the occurrence of the first utilization
of the A Tender Facility on or before
the date nine (9) months after September
24, 1999, and other conditions precedent
customary for facilities and
transactions of this type, including
evidence of authority and receipt of
necessary consents and approvals:
(a) Each Credit Party shall have
executed and delivered satisfactory
definitive financing documentation with
respect to the Facilities (the "CREDIT
DOCUMENTATION").
(b) On or prior to the Tender Closing
Date, cash in an amount not less than
$270 million shall be contributed to the
equity capital of Asmex through Grupo
Mexico (i) from existing cash resources
of GMM in an aggregate amount not less
than $250 million, and (ii) from
existing cash resources of Grupo Mexico,
in an amount not less than $20 million;
PROVIDED that in the event that Asmex
requires cash in excess of such cash
contributions and the A Tender Facility
to consummate the Tender Offer, such
additional cash shall be provided to
Asmex through Grupo Mexico from other
sources acceptable to the Arranger.
(c) Satisfaction of the Arranger with
all material terms and conditions of the
Tender Offer and the definitive Merger
agreement. In addition, the Tender
Offer and the Merger shall have been, or
shall be concurrently, consummated in a
manner satisfactory to the
Administrative Agent (including
satisfaction of the Administrative Agent
with all determinations as to the
satisfaction of
<PAGE>
10
material conditions thereunder) and no
such condition of the Tender Offer or
the definitive Merger agreement shall
have been waived, amended, supplemented
or otherwise modified without the prior
written consent of the Administrative
Agent; and Asmex shall have acquired
shares of common stock of Asarco
representing not less than 80% of the
ordinary voting power of all of the
shares of capital stock of Asarco on a
fully diluted basis, including stock of
Asarco owned by Grupo Mexico and
subsidiaries prior to the Tender Offer
(determined in a manner satisfactory to
the Arranger).
(d) Grupo Mexico and Asarco shall have
entered into a definitive Merger
agreement in form and substance
satisfactory to the Administrative
Agent, or Grupo Mexico shall have made
satisfactory arrangements for the
initiation of a statutory short-form
merger, in each case pursuant to which
Asarco will become a wholly-owned
subsidiary of Grupo Mexico with Grupo
Mexico able to exercise full control
over the business and affairs of Asarco.
(e) Invalidation or satisfaction of the
requirements of Article 7 of Asarco's
Restated Certificate of Incorporation
with respect to the Transactions such
that, following consummation of the
Tender Offer, the Merger can be
consummated without the affirmative vote
of the holders of any Asarco shares
other than Asmex; and invalidity,
inapplicability or satisfaction (if
necessary) of Article 10 of Asarco's
Restated Certificate of Incorporation
with respect to the Transactions or the
Facilities.
(f) Satisfaction or inapplicability of
the requirements of Section 14A:10A of
the New Jersey Business Corporation Act
with respect to the Merger such that
following
<PAGE>
11
consummation of the Tender Offer the
Merger can be consummated without the
affirmative vote of the holders of any
Asarco shares other than Asmex.
(g) Invalidation, redemption or other
inapplicability of the rights issued
under Asarco's Shareholder Rights
Agreement dated as of January 28, 1998,
as amended.
(h) There not being any statute, rule,
regulation, judgment, order or
injunction promulgated, entered,
enforced, enacted, issued or applicable
to the Tender Offer or the Merger by any
domestic or foreign federal or state
governmental regulatory or
administrative agency or authority or
court or legislative body or commission
which (i) prohibits, or imposes any
material limitations on, Grupo Mexico's
or Asmex' ownership or operation of all
or a material portion of Asarco's
businesses or assets, (ii) prohibits, or
makes illegal the acceptance for
payment, payment for or purchase of
Asarco common stock or the consummation
of the Tender Offer or the Merger, (iii)
results in a material delay in or
restricts the ability of the Grupo
Mexico, or renders Grupo Mexico unable,
to accept for payment, pay for or
purchase some or all of the tendered
shares of Asarco common stock, or (iv)
imposes material limitations on the
ability of Asmex or Grupo Mexico
effectively to exercise full rights of
ownership of the Asarco common stock,
including, without limitation, the right
to vote the Asarco common stock
purchased by it on all matters properly
presented to Asarco's shareholders.
(i) The Lenders, the Administrative
Agent and the Arranger shall have
received all fees required to be paid,
and all expenses for which invoices have
been presented, on or before the Tender
Closing Date.
<PAGE>
12
(j) The documents and materials filed
publicly by Grupo Mexico (and its
affiliates) and Asmex in connection with
the Tender Offer shall have been
furnished to the Administrative Agent
and such documents and materials shall
be reasonably satisfactory in form and
substance to the Administrative Agent.
(k) All regulatory and third party
approvals and consents (including
Hart-Scott-Rodino and other approvals
and consents, if any) necessary in
connection with the Transactions and the
financing contemplated by the Fourth
Amended and Restated Commitment Letter
shall have been obtained and be in full
force and effect and all applicable
waiting periods shall have expired
without any action being taken or
threatened by any competent authority
which could restrain, prevent or
otherwise impose materially adverse
conditions on the Transactions or the
financing thereof, in each case on terms
satisfactory to the Administrative
Agent.
(l) The Lenders shall have received
(i) audited consolidated financial
statements of Grupo Mexico, GMM and
Grupo Ferroviario Mexicano, S.A. de C.V.
("RR") for the two most recent fiscal
years (in the case of RR, one year)
ended prior to the Tender Closing Date
and (ii) unaudited interim consolidated
financial statements of Grupo Mexico and
of GMM for each quarterly period ended
subsequent to the date of the latest
financial statements delivered pursuant
to clause (i) of this paragraph (l) as
to which such financial statements are
available.
(m) The requisite Lenders shall be
satisfied that upon making the initial A
Tender Loans the requirements of
Regulation U of the
<PAGE>
13
Board of Governors of the Federal
Reserve System shall have been complied
with.
(n) The Lenders shall have received
such legal opinions (including opinions
(i) from counsel to Grupo Mexico and its
subsidiaries and (ii) from such special
and local counsel as may be required by
the Administrative Agent), documents and
other instruments as are customary for
transactions of this type or as they may
reasonably request.
(o) The negotiation, execution and
delivery of definitive Credit
Documentation with respect to the R/C
Facilities satisfactory to all parties.
Such Credit Documentation will contain a
borrowing base condition to each
utilization of the R/C Facilities,
requiring that borrowings thereunder not
exceed 85% of the amount of eligible
receivables of Asarco securing the R/C
Loans; provided that if such requirement
renders the R/C Facilities initially
unutilizable by Asarco in an amount
sufficient to satisfy the financing
needs of Asarco on the Tender Closing
Date, such Credit Documentation will
provide (until such time as such
borrowing base and security requirement
can be satisfied) for an alternative
mechanism (referred to herein as the
"ALTERNATIVE R/C FACILITIES") for
utilization by Asarco of the R/C
Facilities, with the following principal
features (borrowings under such
alternative mechanism being herein
referred to as the "ALTERNATIVE R/C
LOANS"):
-- Alternative R/C Loans will not be
secured by Asarco assets
-- Alternative R/C Loans will be
(i) guaranteed by Asmex (until the
Merger), with such guarantee
secured by the Shares, and
(ii) guaranteed by Grupo Mexico,
<PAGE>
14
with such guarantee secured by
pledges of any Shares held by Grupo
Mexico and of the shares of GMM;
and such guarantee and pledges will
not terminate or be fully released
(notwithstanding contrary
provisions elsewhere in this Term
Sheet) until (in addition to other
conditions noted above) Asarco's
senior unsecured long-term
indebtedness is rated at or above
BBB- by S&P and Baa3 by Moody's.
In the event that the working capital
requirements of Asarco may be satisfied
with Existing R/C Facilities subsequent
to the consummation of the Tender Offer,
the aggregate principal amount of the
R/C Facilities may be reduced by the
amount of such Existing R/C Facilities.
(p) Hedging arrangements satisfactory
to the Administrative Agent shall have
been entered into (with counterparties
acceptable to the Administrative Agent)
for a "costless" collar covering
production of GMM (with a minimum copper
price of $0.75/lb with respect to 70,000
tons per annum) and, upon the
consummation of the Tender Offer,
covering production of Asarco (with a
minimum copper price of $0.75/lb with
respect to 100,000 tons per annum), in
each case for a period of at least one
year from the Tender Closing Date.
On-Going Conditions: The making of each extension of credit
shall be conditioned on (a) the accuracy
of all representations and warranties in
the Credit Documentation (including,
without limitation, the material adverse
change and litigation representations)
and (b) there being no default or event
of default in existence at the time of,
or after giving effect to the making of,
such extension of credit.
<PAGE>
15
As used herein and in the Credit
Documentation a "MATERIAL ADVERSE
CHANGE" shall mean (i) prior to the
consummation of the Merger, any event,
development or circumstance that has had
or could reasonably be expected to have
a material adverse effect on (a) the
Transactions, (b) the business, assets,
property or condition (financial or
otherwise) of Grupo Mexico and its
subsidiaries, GMM and its subsidiaries,
or Asarco and its subsidiaries, in each
case taken as a whole (including any
material change, prior to consummation
of the Tender Offer, in capital
structure or indebtedness of Asarco and
any material acquisition or divestiture
of assets of Asarco or any of its
subsidiaries taken as a whole, that in
any such case has had or could
reasonably be expected to have such a
material adverse effect); PROVIDED,
HOWEVER, that any adverse effect that
copper prices have had or may have on
the business, operations, property or
financial condition of Grupo Mexico and
its subsidiaries, GMM and its
subsidiaries, or Asarco and its
subsidiaries, in each case taken as a
whole, shall not be deemed to have such
a material adverse effect for purposes
of this clause (i)(b), or (c) the
validity or enforceability of any of the
Credit Documentation or the rights and
remedies of the Administrative Agent and
the Lenders thereunder; and (ii) after
the consummation of the Merger, any
event, development or circumstance that
has had or could reasonably be expected
to have a material adverse effect on (a)
the Transactions, (b) the business,
assets, property, condition (financial
or otherwise) or prospects of Grupo
Mexico and its subsidiaries, GMM and its
subsidiaries, or Asarco and its
subsidiaries, in each case taken as a
whole, or (c) the validity or
enforceability of any of the Credit
Documentation or the rights and remedies
of
<PAGE>
16
the Administrative Agent and the Lenders
thereunder.
VI. CERTAIN DOCUMENTATION MATTERS The Credit Documentation for the A
Tender Facility and the R/C Facilities
shall contain representations,
warranties, covenants and events of
default customary for financings of
these types and other terms deemed
appropriate by the Lenders, including,
without limitation (but subject in
appropriate cases to customary and other
exceptions to be agreed), those
specified below.
Representations and Warranties: Financial statements (including pro
forma financial statements); absence of
undisclosed liabilities; no material
adverse change; corporate existence;
compliance with law; corporate power and
authority; enforceability of Credit
Documentation; no conflict with law or
contractual obligations; no material
litigation; no default; ownership of
property; liens; intellectual property;
no burdensome restrictions; taxes;
margin stock regulations; Federal
Reserve regulations; ERISA; Investment
Company Act; subsidiaries; environmental
matters; solvency; labor matters;
accuracy of disclosure; and creation and
perfection of security interests.
Affirmative Covenants: Delivery of financial statements,
reports, accountants' letters, annual
projections, officers' certificates and
other information requested by the
Lenders; payment of certain other
obligations; all payments under the
Facilities to be made free and clear of
and without reduction by reason of
present or future taxes (customary
gross-up, indemnity and evidence of
payment provisions); continuation of
business and maintenance of existence
and material rights and privileges;
compliance with laws and material
contractual obligations; maintenance of
property and insurance; maintenance of
books and records; right of
<PAGE>
17
the Lenders to inspect property and
books and records; notices of defaults,
litigation and other material events;
maintenance of required hedging
arrangements; compliance with
environmental laws; further assurances
(including, without limitation, with
respect to security interests in
after-acquired property); ownership of
GMM, of RR, of Asmex and, after the
Merger, of Asarco; in the event of
Asarco's utilization of the Alternative
R/C Facility, Grupo Mexico to use its
best efforts to cause Asarco to replace
such utilization with R/C Loans that are
not Alternative R/C Loans; and Grupo
Mexico to use its best efforts to
consummate the Merger as soon as
practicable; and GMM to take reasonable
steps to maintain investment grade
ratings from S&P, Moody's and Duff &
Phelps.
<PAGE>
18
Financial Covenants: Financial covenants relating to
(a) Grupo Mexico (consolidated with all
subsidiaries, and consolidated with all
subsidiaries other than Southern Peru
Copper Corporation)
(i) Maximum Debt to EBITDA ratio
(ii) Minimum ratio of EBITDA to
interest expense
(iii) Maximum Debt to Capital
ratio
(b) GMM and subsidiaries (for so long
as any Grupo Mexico guarantee is in
effect)
(i) Debt to Capital ratio not
exceeding 45%
(ii) Minimum Tangible Net Worth
(iii) Minimum Collections to Debt
Service ratio
(iv) Minimum annual level of
export receivables
(v) Minimum ratio of export
receivables to SEN debt service
(vi) Minimum ratio of EBITDA to
interest expense
(c) Asarco
Minimum EBITDA levels
Negative Covenants: Limitations on: indebtedness (including
preferred stock of subsidiaries);
voluntary prepayments of indebtedness
other than under the Facilities; liens
(including negative pledge on stock of
GMM, Asarco and RR); guarantee
obligations; mergers, consolidations,
liquidations and dissolutions; sales of
assets; leases; capital expenditures;
investments, loans and advances;
dividends
<PAGE>
19
and other payments in respect of capital
stock; transactions with affiliates;
sale and leasebacks; changes in fiscal
year; and changes in lines of business.
Special Covenant of Asmex: Asmex shall covenant that it will not
engage in any activity other than the
Transactions, the A Tender Facility and
activities necessary to effect the same.
Events of Default: (a) A Borrower shall fail to make any
payment of principal of any Loan when
due.
(b) A Borrower shall fail to make any
payment of interest or fees on any Loan,
or any other payments required under the
Credit Documentation, within 3 business
days of due date.
(c) Any representation or warranty by a
Credit Party contained in the Credit
Documentation or any certificate
required to be delivered thereunder
shall prove to have been incorrect in a
material respect when made or deemed
made.
(d) A Credit Party (or any of its
subsidiaries) shall fail to perform or
observe any of its financial or other
covenants under the Credit Documentation
(subject to grace periods to be agreed).
(e) Customary bankruptcy events of
default, including (i) Grupo Mexico,
GMM, Asarco or any of their
subsidiaries (except for non-material
subsidiaries (to be defined)) shall
consent to the appointment of a
receiver for itself or a substantial
part of its property, (ii) Grupo
Mexico, GMM, Asarco or any of their
subsidiaries (except for non-material
subsidiaries) shall seek relief under
any applicable bankruptcy law or
(iii) an involuntary bankruptcy or
like proceeding shall have been
commenced against Grupo Mexico,
GMM, Asarco or any of their
subsidiaries (except for
non-material
<PAGE>
20
subsidiaries) and such proceeding
shall not have been stayed or vacated
for a period of 60 days after the
date it was commenced.
(f) The security interest in any
collateral furnished by a Credit Party
listed above under "Guarantees and
Collateral" shall cease to be a first
priority perfected security interest as
required hereunder.
(g) Failure by a Credit Party to pay
when due (after taking into account
applicable grace periods) any unsecured
or secured indebtedness (including
capitalized lease obligations) or any
default that permits the acceleration of
the maturity of any such indebtedness
and obligations or termination of any
capital lease, aggregating in the case
of all such indebtedness and obligations
an amount equal to or exceeding
threshold amounts to be agreed.
(h) A final judgment or judgments for
the payment of money shall be entered
against Grupo Mexico, GMM, Asarco or any
of their subsidiaries (except for
non-material subsidiaries, and except,
in the case of Asarco and its
subsidiaries prior to consummation of
the Tender Offer, judgments the
existence of which was already disclosed
and publicly available (or otherwise
known by officers of the Arranger or
Chase working on the Transactions) prior
to September 24, 1999) in an aggregate
amount for all such persons equal to or
exceeding threshold amounts to be agreed
and which have not been bonded, stayed
or satisfied for a period of 30 days or
more.
(i) There shall occur one or more ERISA
Events which individually or in the
aggregate results in or could reasonably
be expected to result in a material
adverse change; or there shall exist an
amount of unfunded benefit liabilities
(as defined in the
<PAGE>
21
Statement of Financial Accounting
Standards No. 87), individually or in
the aggregate for all Plans (excluding
for purposes of such computation any
Plans with respect to which assets
exceed benefit liabilities), which could
reasonably be expected to result in a
material adverse change.
(j) There shall occur a change in
control of GMM, Asmex or (after the
consummation of the Tender Offer)
Asarco; or Persons (to be identified)
controlling Grupo Mexico (I.E., having
the power to elect a majority of the
members of the Board of Directors of
Grupo Mexico) on September 24, 1999,
shall cease to maintain such control.
(k) Default in the performance or
observation of any term or condition in
any material contract of Grupo Mexico,
GMM or Asarco, or any of their
subsidiaries, in each case taken as a
whole, that could reasonably be expected
to result in a material adverse change.
(l) So long as any obligations under
the A Tender Facility remain
outstanding, any Default or acceleration
under the A Tender Facility, or the R/C
Facilities (including Alternative R/C
Facilities) or the secured export note
or other long-term debt obligations of
GMM (with a threshold amount, in the
case of GMM, of $30 million).
Voting: Amendments and waivers with respect to
the Credit Documentation shall require
the approval of Lenders holding not less
than a majority of the aggregate amount
of the Loans thereunder and commitments
under the related Facilities, except
that (a) the consent of each Lender
directly affected thereby shall be
required with respect to (i) changes in
the maturity of any Loan,
<PAGE>
22
(ii) reductions in the rate of interest
or any fee or extensions of any due date
thereof, (iii) increases in the amount
or extensions of the expiry date of any
Lender's commitment and (iv)
modifications to the pro rata provisions
of the Credit Documentation and (b) the
consent of 100% of the Lenders shall be
required with respect to (i)
modifications to any of the voting
percentages and (ii) releases of any
guarantee other than of a non-material
subsidiary (to be defined) or all or any
substantial part of the collateral.
Assignments and Participations: The Lenders shall be permitted to assign
and sell participations in their Loans
and commitments, subject, in the case of
assignments (other than to another
Lender or to an affiliate of a Lender),
to the consent of the Administrative
Agent and Grupo Mexico (which consent in
each case shall not be unreasonably
withheld, provided that if a default
shall have occurred and be continuing
Grupo Mexico's consent shall not be
necessary). In the case of partial
assignments (other than to another
Lender or to an affiliate of a Lender of
any interest in the A Tender Facility),
the minimum assignment amount shall be
$5,000,000 unless otherwise agreed by
Grupo Mexico and the Administrative
Agent. Each assignment shall be subject
to payment to the Administrative Agent
of a processing fee of $3,500.
Participants shall have the same
benefits as the Lenders from which they
acquired their participations with
respect to yield protection and
increased cost provisions. Voting
rights of participants shall be limited
to those matters with respect to which
the affirmative vote of the Lender from
which it purchased its participation
would be required as described in items
(a) and (b) of the paragraph on "Voting"
above. Pledges of Loans in accordance
with applicable law shall be permitted
without restriction.
<PAGE>
23
Yield Protection: The Credit Documentation shall contain
customary provisions (a) protecting the
Lenders against increased costs or loss
of yield resulting from changes in
reserve, tax, capital adequacy and other
requirements of law and from the
imposition of or changes in withholding
or other taxes and (b) indemnifying the
Lenders for "breakage costs" incurred in
connection with, among other things, any
prepayment of a Eurodollar Loan (as
defined in Annex I) on a day other than
the last day of an interest period with
respect thereto.
Expenses and Indemnification: The Borrowers shall pay (a) all
reasonable out-of-pocket expenses of the
Administrative Agent and the Arranger
associated with the syndication of the
Credit Facilities and the preparation,
execution, delivery and administration
of the Credit Documentation and any
amendment or waiver with respect thereto
(including the reasonable fees,
disbursements and other charges of
counsel) and (b) all out-of-pocket
expenses of the Administrative Agent and
(after an Event of Default) of the
Lenders (including the fees,
disbursements and other charges of
counsel) in connection with the
enforcement of the Credit Documentation.
The Administrative Agent, the Arranger
and the Lenders (and their affiliates
and their respective officers,
directors, employees, advisors and
agents) will have no liability for, and
will be indemnified and held harmless
against, any loss, liability, cost or
expense incurred in respect of the
financing contemplated hereby or the use
or the proposed use of proceeds thereof
(except to the extent resulting from the
gross negligence or willful misconduct
of the indemnified party).
Governing Law and Forum: State of New York.
<PAGE>
24
Counsel to the Administrative
Agent and the Arranger: Milbank, Tweed, Hadley & McCloy LLP, and
Ritch, Heather y Mueller S.C.
