<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO
SECTION 14(d)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934
------------------------
TRISTAR AEROSPACE CO.
(NAME OF SUBJECT COMPANY)
ALLIEDSIGNAL INC.
ALLIEDSIGNAL ACQUISITION CORP.
(BIDDERS)
------------------------
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
89674L-10-1
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
PETER M. KREINDLER, ESQ.
ALLIEDSIGNAL INC.
101 COLUMBIA ROAD
MORRIS TOWNSHIP, NJ 07962
(973) 455-5513
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
WITH COPIES TO:
DAVID K. ROBBINS, ESQ.
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
350 SOUTH GRAND AVENUE, 32ND FLOOR
LOS ANGELES, CA 90071
(213) 473-2000
------------------------
CALCULATION OF FILING FEE
<TABLE>
<S> <C>
Transaction Valuation:* Amount of filing fee:
$187,371,844 $37,475
</TABLE>
* For purposes of calculating fee only. This amount is based on a per share
offering price of $9.50, for 19,723,352 shares of common stock (including
vested options with strike prices lower than $9.50). Pursuant to the
Agreement and Plan of Merger, dated as of October 31, 1999, by and among
TriStar Aerospace Co. (the 'Company'), AlliedSignal Inc. and AlliedSignal
Acquisition Corp. (collectively, the 'Bidders'), the Company represented to
the Bidders that, as of such date, it had 17,277,054 shares of common stock
issued and outstanding and 4,491,074 shares of common stock reserved for
issuance upon exercise of outstanding stock options (2,446,298 of which
options are vested and have strike prices lower than $9.50). The amount of
the filing fee, calculated in accordance with Rule 0-11 under the Securities
Exchange Act of 1934, as amended, equals 1/50 of one percent of the
aggregate of the cash offered by the Bidder.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: Not applicable
Form or Registration No.: Not applicable
Filing Party: Not applicable
Date Filed: Not applicable
================================================================================
<PAGE>
This Tender Offer Statement on Schedule 14D-1 relates to the offer by
AlliedSignal Acquisition Corp., a Delaware corporation ('Offeror'), and a wholly
owned subsidiary of AlliedSignal Inc., a Delaware corporation ('Parent'), to
purchase all of the outstanding shares of Common Stock, par value $0.01 per
share (the 'Shares'), of TriStar Aerospace Co., a Delaware corporation (the
'Company'), at a price of $9.50 per Share, net to the seller in cash and without
interest thereon, on the terms and subject to the conditions set forth in the
Offer to Purchase, dated November 5, 1999 (the 'Offer to Purchase'), and the
related Letter of Transmittal (the 'Letter of Transmittal,' which together with
the Offer to Purchase, constitutes the 'Offer'), copies of which are attached
hereto as Exhibits (a)(1) and (a)(2), respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY
(a) The subject company is TriStar Aerospace Co., a Delaware corporation,
with its principal executive offices located at 2527 Willowbrook Road, Dallas,
Texas 75220-4420.
(b) The information set forth in the Introduction, and Section 1 'Terms of
the Offer,' of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 'Price Range of Shares;
Dividends on the Shares' of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND
(a) through (d), (g) The information set forth in the Introduction, Section
9 'Certain Information Concerning Offeror,' and Annex I of the Offer to Purchase
is incorporated herein by reference.
(e) None of Offeror, Parent or, to the best knowledge of Offeror or Parent,
any person listed in Annex I of the Offer to Purchase has, during the last 5
years, been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
(f) None of Offeror, Parent or, to the best knowledge of Offeror or Parent,
any person listed in Annex I of the Offer to Purchase has, during the last 5
years, been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting activities subject to, federal or state securities laws or finding
any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
(a) and (b) The information set forth in Section 11 'Background of Offer'
and Section 13 'The Transaction Documents' of the Offer to Purchase are
incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a) through (c) The information set forth in Section 10 'Source and Amount
of Funds' of the Offer to Purchase is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER
(a) through (e) The information set forth in Section 12 'Purpose of the
Offer; The Merger; Plans for the Company,' Section 13 'The Transaction
Documents,' and Section 14 'Dividends and Distributions' of the Offer to
Purchase is incorporated herein by reference.
(d) The information set forth in the Offer to Purchase is incorporated
herein by reference.
(f) and (g) The information set forth in Section 7 'Effect of Offer on NYSE
Listing, Market for Shares and SEC Registration' of the Offer to Purchase is
incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
(a) and (b) The information set forth in Section 13 'The Transaction
Documents' of the Offer to Purchase is incorporated herein by reference.
2
<PAGE>
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES
The information set forth in the Introduction, Section 1 'Terms of the
Offer,' Section 11 'Background of Offer,' Section 12 'Purpose of the Offer; The
Merger; Plans for the Company,' Section 13 'The Transaction Documents,' and
Section 14 'Dividends and Distributions' of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
The information set forth in Section 17 'Fees and Expenses' of the Offer to
Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS
The information set forth in Section 9 'Certain Information Concerning
Offeror' of the Offer to Purchase is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION
(a) None or not applicable.
(b) and (c) The information set forth in Section 16 'Certain Regulatory and
Legal Matters' of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 'Effect of Offer on NYSE
Listing, Market for Shares and SEC Registration' of the Offer to Purchase is
incorporated herein by reference.
(e) None.
(f) The Offer to Purchase, a copy of which is attached as Exhibit (a)(1)
hereto, and the Letter of Transmittal, a copy of which is attached as Exhibit
(a)(2) hereto, each of which is incorporated in its entirety herein by
reference.
3
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<S> <C>
(a)(1) -- Offer to Purchase, dated November 5, 1999.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Letter from Georgeson Shareholder Communications Inc., as
Information Agent, to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(4) -- Letter to Clients from Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(5) -- Notice of Guaranteed Delivery.
(a)(6) -- Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) -- Form of Summary Announcement, as published on November 5, 1999.
(a)(8) -- Press Release, as issued by Parent and the Company on November 1, 1999.
(a)(9) -- Form of Press Release, to be issued by Parent on November 5, 1999.
(b) -- None or not Applicable.
(c)(1) -- The Agreement and Plan of Merger, dated as of October 31,
1999, among Offeror, Parent and the Company.
(c)(2) -- Tender and Option Agreement, dated as of October 31,
1999, among Offeror, Parent, P. Quentin Bourjeaurd and
Charles Balchunas.
(c)(3) -- Amendment to Employment Agreement, dated as of October
31, 1999, between the Company and P. Quentin Bourjeaurd.
(c)(4) -- Confidentiality Agreement, dated as of April 5, 1999,
between Parent and the Company.
(d) through (f) -- None or not applicable.
</TABLE>
4
<PAGE>
SIGNATURES
After due inquiry and to the best of the knowledge and belief of each of
the undersigned, each of the undersigned certifies that the information set
forth in this statement is true, complete and correct.
November 5, 1999
ALLIEDSIGNAL INC.
By: /s/ PETER M. KREINDLER
.................................
Name: Peter M. Kreindler
Title: Senior Vice President,
General Counsel and Secretary
ALLIEDSIGNAL ACQUISITION CORP.
By: /s/ PETER M. KREINDLER
.................................
Name: Peter M. Kreindler
Title: President
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
------- ----
<S> <C> <C>
(a)(1) -- Offer to Purchase, dated November 5, 1999.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Letter from Georgeson Shareholder Communications Inc., as
Information Agent, to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(4) -- Letter to Clients from Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(5) -- Notice of Guaranteed Delivery.
(a)(6) -- Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) -- Form of Summary Announcement, as published on November 5, 1999.
(a)(8) -- Press Release, as issued by Parent and the Company on
November 1, 1999.
(a)(9) -- Form of Press Release, to be issued by Parent on November
5, 1999.
(b) -- None or not Applicable.
(c)(1) -- The Agreement and Plan of Merger, dated as of October 31,
1999, among Offeror, Parent and the Company.
(c)(2) -- Tender and Option Agreement, dated as of October 31,
1999, among Offeror, Parent, P. Quentin Bourjeaurd and
Charles Balchunas.
(c)(3) -- Amendment to Employment Agreement, dated as of October
31, 1999, between the Company and P. Quentin Bourjeaurd.
(c)(4) -- Confidentiality Agreement, dated as of April 5, 1999,
between Parent and the Company.
(d) through (f) -- None or not applicable.
</TABLE>
6
STATEMENT OF DIFFERENCES
The section symbol shall be expressed as..............................'SS'
The registered trademark symbol shall be expressed as.................'r'
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TRISTAR AEROSPACE CO.
AT
$9.50 NET PER SHARE
BY
ALLIEDSIGNAL ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, DECEMBER 6, 1999, UNLESS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES OF COMMON STOCK, $.01 PAR VALUE PER SHARE (THE 'SHARES'), OF TRISTAR
AEROSPACE CO. ('THE COMPANY'), WHICH, WHEN ADDED TO THE SHARES,
IF ANY, BENEFICIALLY OWNED BY ALLIEDSIGNAL INC. ('PARENT'), ITS AFFILIATES OR
ALLIEDSIGNAL ACQUISITION CORP. ('OFFEROR') (EXCLUDING SHARES BENEFICIALLY OWNED
BY PARENT BY VIRTUE OF THE SHAREHOLDERS AGREEMENT, AS DEFINED IN THE
INTRODUCTION TO OFFER), WOULD REPRESENT, ON A FULLY DILUTED BASIS, AT LEAST A
MAJORITY OF THE OUTSTANDING SHARES. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER
CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE INTRODUCTION AND SECTIONS 1
AND 15 HEREOF.
THIS OFFER (THE 'OFFER') IS BEING MADE IN CONNECTION WITH THE AGREEMENT AND
PLAN OF MERGER, DATED AS OF OCTOBER 31, 1999 (THE 'MERGER AGREEMENT'), AMONG
PARENT, OFFEROR AND THE COMPANY. THE BOARD OF DIRECTORS OF THE COMPANY HAS
UNANIMOUSLY APPROVED THE OFFER AND THE MERGER, HAS DETERMINED THAT THE MERGER
AGREEMENT AND THE OFFER ARE FAIR TO AND ADVISABLE AND IN THE BEST INTERESTS OF
THE COMPANY AND ITS STOCKHOLDERS, AND HAS RESOLVED TO RECOMMEND ACCEPTANCE OF
THE OFFER TO THE STOCKHOLDERS, AND THAT THE STOCKHOLDERS TENDER THEIR SHARES IN
THE OFFER AND, IF APPLICABLE, VOTE TO APPROVE AND ADOPT THE MERGER AGREEMENT AND
THE MERGER.
------------------------
IMPORTANT
Any stockholder of the Company desiring to tender Shares should either (i)
complete and sign the Letter of Transmittal or a facsimile thereof in accordance
with the instructions in the Letter of Transmittal and deliver the Letter of
Transmittal with the Shares and all other required documents to The Bank of New
York, the Depositary, or follow the procedures for book-entry transfer set forth
in Section 3, 'Procedure for Tendering Shares,' or (ii) request such
stockholder's broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for the stockholder. Stockholders having Shares
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee must contact such person if they desire to tender their Shares.
Any stockholder of the Company who desires to tender Shares and whose
certificates representing such Shares are not immediately available or who
cannot comply with the procedures for book-entry transfer on a timely basis or
who cannot deliver all required documents to the Depositary, in each case prior
to the expiration of the Offer, must tender such Shares pursuant to the
guaranteed delivery procedures set forth in Section 3, 'Procedure for Tendering
Shares.'
Questions and requests for assistance may be directed to Georgeson
Shareholder Communications Inc., the Information Agent, at its address and
telephone number set forth on the back cover of this Offer to Purchase.
Additional copies of this Offer to Purchase, the Letter of Transmittal, the
Notice of Guaranteed Delivery and other related materials may be obtained from
the Information Agent or from brokers, dealers, commercial banks and trust
companies.
------------------------
The Information Agent for the Offer is:
[LOGO OF GEORGESON SHAREHOLDER COMMUNICATIONS INC.]
November 5, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
------- ----
<S> <C>
Introduction..................................................... 3
1. Terms of the Offer.......................................... 4
2. Acceptance for Payment and Payment for Shares............... 6
3. Procedure for Tendering Shares.............................. 6
4. Withdrawal Rights........................................... 9
5. Certain Federal Income Tax Consequences..................... 9
6. Price Range of Shares; Dividends on the Shares.............. 10
7. Effect of Offer on New York Stock Exchange Listing, Market
for Shares and SEC Registration............................. 11
8. Certain Information Concerning the Company.................. 12
9. Certain Information Concerning Offeror and Parent........... 14
10. Source and Amount of Funds.................................. 18
11. Background of the Offer..................................... 18
12. Purpose of the Offer; The Merger; Plans for the Company..... 20
13. The Transaction Documents................................... 23
14. Dividends and Distributions................................. 33
15. Certain Conditions to Offeror's Obligations................. 33
16. Certain Regulatory and Legal Matters........................ 35
17. Fees and Expenses........................................... 36
18. Miscellaneous............................................... 36
Annex I. Directors and Executive Officers of Parent and
Offeror........................................................ I-1
</TABLE>
2
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF TRISTAR AEROSPACE CO.:
INTRODUCTION
AlliedSignal Acquisition Corp., a Delaware corporation ('Offeror') and a
wholly owned subsidiary of AlliedSignal Inc., a Delaware corporation ('Parent'),
hereby offers to purchase all of the outstanding shares of common stock, par
value $0.01 per share (the 'Shares'), of TriStar Aerospace Co., a Delaware
corporation (the 'Company'), at a purchase price of $9.50 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which together
constitute the 'Offer'). Tendering stockholders will not be obligated to pay
brokerage fees or commissions or, except as set forth in Instruction 6 of the
Letter of Transmittal, transfer taxes on the purchase of Shares by Offeror
pursuant to the Offer. Offeror will pay all charges and expenses of The Bank of
New York (the 'Depositary') and Georgeson Shareholder Communications Inc. (the
'Information Agent') for their respective services in connection with the Offer
and the Merger (as hereinafter defined). See Section 17, 'Fees and Expenses.'
Offeror is a corporation newly formed by Parent in connection with the
Offer and the transactions contemplated by the Merger Agreement (as hereinafter
defined).
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER
AND THE MERGER, HAS DETERMINED THAT THE MERGER AGREEMENT AND THE OFFER ARE FAIR
TO AND ADVISABLE AND IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS,
AND HAS RESOLVED TO RECOMMEND ACCEPTANCE OF THE OFFER TO THE COMPANY'S
STOCKHOLDERS, AND THAT THE COMPANY'S STOCKHOLDERS TENDER THEIR SHARES IN THE
OFFER AND, IF APPLICABLE, VOTE TO APPROVE AND ADOPT THE MERGER AGREEMENT AND THE
MERGER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES (THE 'MINIMUM NUMBER OF SHARES') WHICH, WHEN ADDED TO THE SHARES, IF ANY,
BENEFICIALLY OWNED BY PARENT, ITS AFFILIATES OR OFFEROR (EXCLUDING SHARES
BENEFICIALLY OWNED BY PARENT BY VIRTUE OF THE TENDER AND OPTION AGREEMENT, DATED
AS OF OCTOBER 31, 1999, AMONG PARENT, OFFEROR AND P. QUENTIN BOURJEAURD AND
CHARLES BALCHUNAS (THE 'SHAREHOLDERS AGREEMENT'), WOULD REPRESENT, ON A FULLY
DILUTED BASIS, AT LEAST A MAJORITY OF THE OUTSTANDING SHARES (THE 'MINIMUM
CONDITION'). SEE SECTION 15, 'CERTAIN CONDITIONS TO OFFEROR'S OBLIGATIONS.'
The Company has represented to Parent and Offeror that, as of October 31,
1999, there were 17,277,054 Shares issued and outstanding and 4,491,074 Shares
reserved for issuance pursuant to outstanding stock options. Based on the
foregoing, Offeror believes that approximately 10,884,065 Shares must be validly
tendered and not withdrawn prior to the expiration of the Offer in order for the
Minimum Condition to be satisfied. See Section 1, 'Terms of the Offer.'
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of October 31, 1999 (the 'Merger Agreement'), by and among Parent, Offeror
and the Company. The Merger Agreement provides, among other things, for the
making of the Offer by Offeror, and further provides that, upon the terms and
subject to certain conditions of the Merger Agreement, Offeror or another direct
or indirect wholly owned subsidiary of Parent will be merged with and into the
Company (the 'Merger'). The Merger Agreement is more fully described in
Section 13, 'The Transaction Documents -- The Merger Agreement.' The Merger is
subject to a number of conditions, including the approval and adoption of the
Merger Agreement by stockholders of the Company, if such approval is required by
applicable law. See Section 12, 'Purpose of the Offer; The Merger; Plans for the
Company.' In the Merger, each outstanding Share (other than Shares held in the
treasury of the Company or owned by Parent or any subsidiary of Parent, which
shall automatically be cancelled and retired) shall automatically be cancelled
and extinguished and, other than Shares with respect to which appraisal rights
are properly exercised, will be converted into and become a right to receive
$9.50 (or any higher price per Share that may be paid pursuant to the Offer) in
cash, without interest thereon (the 'Offer Price').
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
3
<PAGE>
This Offer to Purchase contains forward-looking statements that involve
risks and uncertainties, including the risks associated with satisfying the
various conditions to the Offer. Certain of these factors, as well as additional
risks and uncertainties, are detailed in the Company's periodic filings with the
Securities and Exchange Commission (the 'Commission'). See Section 8, 'Certain
Information Concerning the Company -- Available Information.'
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions set forth in the Offer
(including, if the Offer is extended or amended, the terms and conditions of any
extension or amendment), Offeror will accept for payment and pay for all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4, 'Withdrawal Rights.' The term 'Expiration Date' means
12:00 midnight, New York City time, on Monday, December 6, 1999 (the 'Scheduled
Expiration Date'), unless Offeror shall have extended the period of time for
which the Offer is open, in which event the term 'Expiration Date' shall mean
the latest time and date at which the Offer, as so extended by Offeror, shall
expire.
In the Merger Agreement, Offeror has agreed that if all of the conditions
to the Offer set forth in Section 15, 'Certain Conditions to Offeror's
Obligations' (the 'Offer Conditions') are not satisfied by the Scheduled
Expiration Date then, provided that all such conditions are and continue to be
reasonably probable of being satisfied by the date that is 35 business days from
the date the Offer is commenced, Offeror shall extend the Offer for one or more
periods of not more than five business days each if requested to do so by the
Company; provided that Offeror shall not be required to extend the Offer beyond
the date that is 35 business days from the date the Offer is commenced or, if
earlier, the date of termination of the Merger Agreement in accordance with its
terms. Otherwise, Offeror has agreed in the Merger Agreement that it will not,
without the prior written consent of the Company, extend the period during which
the Offer is open if all the Offer Conditions have been satisfied, except that
Offeror may, without the consent of the Company, extend the Offer as follows:
(i) if on the Scheduled Expiration Date any of the Offer Conditions shall not
have been satisfied or waived, for one or more periods but in no event past 45
business days from the date the Offer is commenced (unless the waiting, review
and investigation periods under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the 'Hart Scott-Rodino Act'), have not terminated or
expired or required governmental consents have not been obtained in which case
not past 60 business days from the date the Offer is commenced (the 'Termination
Date'); (ii) for such period as may be required by any rule, regulation,
interpretation or position of the Commission or the staff thereof applicable to
the Offer; or (iii) for one or more periods (each such period to be for not more
than three business days and such extensions to be for an aggregate period of
not more than five business days beyond the latest expiration date that would
otherwise be permitted under clause (i) or (ii) of this sentence) if on such
expiration date there shall not have been tendered that number of Shares which
would equal more than 90% of the issued and outstanding Shares. Offeror's rights
to extend the Offer pursuant to the foregoing clauses (ii) and (iii) are subject
to the Company's right to terminate the Merger Agreement if the Offer shall not
have been consummated by the Termination Date; see Section 13, 'The Transaction
Documents -- The Merger Agreement -- Termination'). Subject to the foregoing
restrictions, Offeror reserves the right (but will not be obligated), in its
sole discretion, to extend the period during which the Offer is open by giving
oral or written notice of such extension to the Depositary and by making a
public announcement of such extension. There can be no assurance that Offeror
will exercise its right to extend the Offer.
Offeror has also agreed in the Merger Agreement that it will not, without
the prior written consent of the Company: (i) decrease the amount or change the
form of consideration payable in the Offer, (ii) decrease the number of Shares
sought in the Offer, (iii) impose additional conditions to the Offer,
(iv) change any Offer Condition or amend any other term of the Offer if any such
change or amendment would be adverse in any respect to the holders of Shares
(other than Parent or Offeror), or (v) amend or waive the Minimum Condition.
THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM CONDITION. THE
OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE SECTION 15, 'CERTAIN
CONDITIONS TO OFFEROR'S OBLIGATIONS.' As described
4
<PAGE>
in the Introduction to this Offer to Purchase, Offeror believes the Minimum
Number of Shares is approximately 10,884,065. If the Minimum Condition or any of
the other Offer Conditions has not been satisfied by 12:00 midnight, New York
City time, on December 6, 1999 (or any other time then set as the Expiration
Date), Offeror may elect (i) subject to the qualifications described above with
respect to the extension of the Offer, to extend the Offer and, subject to
applicable withdrawal rights, retain all tendered Shares until the expiration of
the Offer, as extended, subject to the terms of the Offer, (ii) subject to
complying with applicable rules and regulations of the Commission and to the
terms of the Merger Agreement (including, if necessary, obtaining the prior
written consent of the Company), to accept for payment all Shares so tendered
and not extend the Offer, or (iii) subject to the terms of the Merger Agreement,
to terminate the Offer and not accept for payment any Shares and return all
tendered Shares to tendering stockholders.
Subject to the applicable rules and regulations of the Commission, Offeror
expressly reserves the right, in its sole discretion, to delay acceptance for
payment of any Shares (or delay payment for any Shares, regardless of whether
such Shares were theretofore accepted for payment pending the receipt of
required governmental consents), or, subject to the limitations set forth in the
Merger Agreement, to terminate the Offer and not to accept for payment or pay
for any Shares not theretofore accepted for payment or paid for, upon the
occurrence of any of the Offer Conditions, by giving oral or written notice of
such delay or termination to the Depositary. Offeror's right to delay payment
for any Shares or not to pay for any Shares theretofore accepted for payment is
subject to the applicable rules and regulations of the Commission, including
Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the
'Exchange Act'), relating to Offeror's obligation to pay for or return tendered
Shares promptly after the termination or withdrawal of the Offer.
Except as set forth above, and subject to the applicable rules and
regulations of the Commission, Offeror expressly reserves the right, in its sole
discretion, to amend the Offer in any respect. Any extension of the period
during which the Offer is open, or delay in acceptance for payment or payment,
or termination or amendment of the Offer, will be followed, as promptly as
practicable, by public announcement thereof, such announcement in the case of an
extension to be issued not later than 9:00 a.m. New York City time, on the next
business day after the previously scheduled Expiration Date in accordance with
the public announcement requirements of Rule 14d-4(c) under the Exchange Act.
Without limiting the obligation of Offeror under such rule or the manner in
which Offeror may choose to make any public announcement, Offeror currently
intends to make announcements by issuing a press release to the Dow Jones News
Service and making any appropriate filing with the Commission.
If Offeror makes a material change in the terms of the Offer or the
information concerning the Offer or if it waives a material condition of the
Offer, Offeror will disseminate additional tender offer materials and extend the
Offer if and to the extent required by Rules 14d-4(c), 14d-6(d) and 14(e)-1
under the Exchange Act or otherwise. The minimum period during which an offer
must remain open following material changes in the terms of the offer or
information concerning the offer, other than a change in price or a change in
percentage of securities sought, will depend upon the facts and circumstances,
including the relative materiality of the terms or information changes. With
respect to a change in price or a change in percentage of securities sought, a
minimum ten business day period is generally required to allow for adequate
dissemination to stockholders and investor response. For purposes of the Offer,
a 'business day' means any day other than a Saturday, Sunday or a federal
holiday, and consists of the time period from 12:01 a.m. through 12:00 midnight,
New York City time.
The Company has provided Offeror with the Company's list of stockholders
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase, the Letter of Transmittal and other
relevant materials will be mailed to record holders of the Shares and will be
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the list of
stockholders or, if applicable, who are listed as participants in a clearing
agency's security position listing for subsequent transmittal to beneficial
owners of Shares.
5
<PAGE>
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Offeror will purchase, by accepting for payment, and will pay
for, all Shares validly tendered prior to the Expiration Date (and not properly
withdrawn) promptly after the Expiration Date. Subject to compliance with
Rule 14e-1(c) under the Exchange Act, Offeror expressly reserves the right to
delay payment for Shares in order to comply in whole or in part with any
applicable law. See Sections 1 and 15. In all cases, payment for Shares accepted
for payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates for such Shares or timely confirmation (a
'Book-Entry Confirmation') of a book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company ('DTC'), pursuant to the
procedures set forth in Section 3, 'Procedure for Tendering Shares,' (ii) a
properly completed and duly executed Letter of Transmittal (or manually signed
facsimile thereof) with all required signature guarantees (unless, in the case
of a book-entry transfer, an Agent's Message (as defined below) is utilized) and
(iii) any other documents required by the Letter of Transmittal.
The term 'Agent's Message' means a message transmitted by DTC to, and
received by, the Depositary and forming a part of a Book-Entry Confirmation,
which states that DTC has received an express acknowledgment from the
participant in DTC tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Offeror
may enforce such agreement against the participant.
For purposes of the Offer, Offeror will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when Offeror gives oral or written notice to the Depositary of Offeror's
acceptance of such Shares for payment. In all cases, payment for Shares
purchased pursuant to the Offer will be made by deposit of the purchase price
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payment from Offeror and transmitting such payment to
tendering stockholders. If, for any reason whatsoever, acceptance for payment of
any Shares tendered pursuant to the Offer is delayed, or Offeror is unable to
accept for payment Shares tendered pursuant to the Offer, then, without
prejudice to Offeror's rights under Section 15, 'Certain Conditions to Offeror's
Obligations,' the Depositary may, nevertheless, on behalf of Offeror, retain
tendered Shares, and such Shares may not be withdrawn, except to the extent that
the tendering stockholders are entitled to withdrawal rights as described in
Section 4, 'Withdrawal Rights,' and as otherwise required by Rule 14e-1(c) under
the Exchange Act. Under no circumstances will interest be paid on the purchase
price for Shares by Offeror by reason of any delay in making such payment.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted for
more Shares than are tendered, certificates for such unpurchased or untendered
Shares will be returned, without expense to the tendering stockholder (or, in
the case of Shares delivered by book-entry transfer to DTC, such Shares will be
credited to an account maintained within DTC), as promptly as practicable after
the expiration, termination or withdrawal of the Offer.
If, prior to the Expiration Date, Offeror increases the consideration
offered to stockholders pursuant to the Offer, such increased consideration will
be paid to all stockholders whose Shares are purchased pursuant to the Offer.
Offeror reserves the right to transfer or assign, in whole or from time to
time in part, to Parent or to one or more direct or indirect subsidiaries of
Parent, the right to purchase Shares tendered pursuant to the Offer, but any
such transfer or assignment will not relieve Offeror of its obligations under
the Offer and will in no way prejudice the rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tenders. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees and any other required
documents, or an Agent's Message in the case of a book-entry delivery, must be
6
<PAGE>
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the Expiration Date. In addition, either
(i) certificates representing such Shares must be received by the Depositary or
such Shares must be tendered pursuant to the procedure for book-entry transfer
set forth below, and a Book-Entry Confirmation must be received by the
Depositary, in each case prior to the Expiration Date, or (ii) the tendering
stockholder must comply with the guaranteed delivery procedure set forth below.
No alternative, conditional or contingent tenders will be accepted. DELIVERY OF
DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at DTC for purposes of the Offer within two
business days after the date of this Offer to Purchase. Any financial
institution that is a participant in DTC's system may make book-entry delivery
of Shares by causing DTC to transfer such Shares into the Depositary's account
at DTC in accordance with DTC's procedures for transfer. Although delivery of
Shares may be effected through book-entry at DTC, the Letter of Transmittal (or
a manually signed facsimile thereof), properly completed and duly executed, with
any required signature guarantees and any other required documents, or an
Agent's Message in the case of a book-entry delivery, must, in any case, be
transmitted to and received by the Depositary at one of its addresses set forth
on the back cover of this Offer to Purchase prior to the Expiration Date or the
guaranteed delivery procedures described below must be complied with.
Signature Guarantee. Signatures on the Letter of Transmittal need not be
guaranteed by a member firm of a registered national securities exchange
(registered under Section 6 of the Exchange Act), by a member firm of the
National Association of Securities Dealers, Inc., by a commercial bank or trust
company having an office or correspondent in the United States or by any other
'Eligible Guarantor Institution,' as defined in Rule 17Ad-15 under the Exchange
Act (collectively, 'Eligible Institutions'), unless the Shares tendered thereby
are tendered (i) by a registered holder of Shares who has completed either the
box entitled 'Special Payment Instructions' or the box entitled 'Special
Delivery Instructions' on the Letter of Transmittal or (ii) as noted in the
following sentence. If the certificates evidencing Shares are registered in the
name of a person or persons other than the signer of the Letter of Transmittal,
or if payment is to be made, or certificates for unpurchased Shares are to be
issued or returned, to a person other than the registered owner or owners, then
the tendered certificates must be endorsed or accompanied by duly executed stock
powers, in either case signed exactly as the name or names of the registered
owner or owners appear on the certificates, with the signatures on the
certificates or stock powers guaranteed by an Eligible Institution as provided
in the Letter of Transmittal. See Instructions 1 and 5 to the Letter of
Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit all required documents to reach the Depositary
prior to the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if such
tender complies with all of the following guaranteed delivery procedures:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Offeror herewith, is
received by the Depositary, as provided below, prior to the Expiration
Date; and
(iii) the certificates representing all tendered Shares, in proper
form for transfer, or a Book-Entry Confirmation with respect to all
Tendered Shares, together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees and any other documents required by the Letter of Transmittal,
are received by the Depositary within three New York Stock Exchange
('NYSE') trading days after the date of such Notice of Guaranteed Delivery.
If certificates are forwarded separately to the Depositary, a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof) must accompany each such delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
7
<PAGE>
THE METHOD OF DELIVERY OF CERTIFICATES REPRESENTING SHARES, THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS
AT THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER AND THE DELIVERY WILL
BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for the Shares (or a Book-Entry
Confirmation) and (ii) a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) and any other documents
required by the Letter of Transmittal (or, as applicable, an Agent's Message).
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT FEDERAL INCOME TAX BACKUP
WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE OF SHARES PURCHASED
PURSUANT TO THE OFFER, EACH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH ITS
CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT IT IS NOT SUBJECT TO
BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9
INCLUDED IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION 10 SET FORTH IN THE
LETTER OF TRANSMITTAL.
Determinations of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by Offeror, in its sole discretion,
and its determination will be final and binding on all parties. Offeror reserves
the absolute right to reject any or all tenders of any Shares that are
determined by it not to be in proper form or the acceptance of or payment for
which may, in the opinion of Offeror, be unlawful. Offeror also reserves the
absolute right to waive any of the conditions of the Offer (other than as
prohibited by the Merger Agreement, as described in Section 1, 'Terms of the
Offer') or any defect or irregularity in the tender of any Shares. Offeror's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the Instructions to the Letter of Transmittal) will be final and
binding on all parties. No tender of Shares will be deemed to have been validly
made until all defects and irregularities have been cured or waived. None of
Offeror, the Depositary, the Information Agent or any other person will be under
any duty to give notification of any defects or irregularities in tenders or
incur any liability for failure to give any such notification.
Other Requirements. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Offeror as the
attorneys-in-fact and proxies of such stockholder, each with full power of
substitution, to the full extent of such stockholder's rights with respect to
the Shares tendered by such stockholder and accepted for payment by Offeror (and
any and all other Shares or other securities issued or issuable in respect of
such Shares on or after October 31, 1999), including, without limitation, the
right to vote such Shares in such manner as such attorney and proxy or his
substitute shall, in his sole discretion, deem proper. All such powers of
attorney and proxies shall be considered coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the extent
that, Offeror accepts such Shares for payment. Upon such acceptance for payment,
all prior powers of attorney and proxies given by the stockholder with respect
to such Shares will be revoked, without further action, and no subsequent powers
of attorney and proxies may be given (and, if given, will be deemed
ineffective). The designees of Offeror will, with respect to the Shares for
which such appointment is effective, be empowered to exercise all voting and
other rights of such stockholder as they in their sole judgment deem proper.
Offeror reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the acceptance for payment of such Shares,
Offeror or its designees must be able to exercise full voting rights with
respect to such Shares.
The tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer as well as the tendering stockholder's representation
and warranty that (a) such stockholder has a net long position in the Shares
being tendered within the meaning of Rule 14e-4 under the Exchange Act and
(b) the tender of such Shares complies with Rule 14e-4. It is a violation of
Rule 14e-4 for a person, directly or indirectly, to tender Shares for such
person's own account unless, at the time of tender, the person so tendering
(i) has a net long position equal to or greater than the amount of (x) Shares
tendered or (y) other securities immediately convertible into or exchangeable or
exercisable for the Shares tendered and such person will acquire such Shares for
tender by conversion, exchange or exercise and (ii) will cause such
8
<PAGE>
Shares to be delivered in accordance with the terms of the Offer. Rule 14e-4
provides a similar restriction applicable to the tender or guarantee of a tender
on behalf of another person. Offeror's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering
stockholder and Offeror upon the terms and subject to the conditions of the
Offer.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment pursuant to the Offer, may also be withdrawn at any time
after January 3, 2000. If purchase of or payment for Shares is delayed for any
reason or if Offeror is unable to purchase or pay for Shares for any reason,
then, without prejudice to Offeror's rights under the Offer, tendered Shares may
be retained by the Depositary on behalf of Offeror and may not be withdrawn
except to the extent that tendering stockholders are entitled to withdrawal
rights as set forth in this Section 4, subject to Rule 14e-1(c) under the
Exchange Act which provides that no person who makes a tender offer shall fail
to pay the consideration offered or return the securities deposited by or on
behalf of security holders promptly after the termination or withdrawal of the
Offer.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name in which the
certificates representing such Shares are registered, if different from that of
the person who tendered the Shares. If certificates for Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and, unless such Shares have
been tendered by an Eligible Institution, the signatures on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Shares have been
tendered pursuant to the procedures for book-entry transfer set forth in
Section 3, 'Procedure for Tendering Shares,' any notice of withdrawal must also
specify the name and number of the account at DTC to be credited with the
withdrawn Shares.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Offeror, in its sole discretion, and
its determination will be final and binding on all parties. None of Offeror, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be returned at any subsequent time prior to the
Expiration Date by following any of the procedures described in Section 3,
'Procedure for Tendering Shares.'
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of the principal federal income tax consequences
of the Offer and the Merger to holders whose Shares are purchased pursuant to
the Offer or whose Shares are converted to cash in the Merger (including
pursuant to the exercise of appraisal rights). The discussion applies only to
holders of Shares in whose hands Shares are capital assets, and may not apply to
Shares received pursuant to the exercise of employee stock options or otherwise
as compensation, or to holders of Shares who are in special tax situations (such
as insurance companies, tax-exempt organizations or non-U.S. persons), or to
persons holding Shares as part of a 'straddle,' 'hedge,' or 'conversion
transaction.' This discussion does not address any aspect of state, local or
foreign taxation.
THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR
GENERAL INFORMATIONAL PURPOSES ONLY AND ARE BASED UPON CURRENT LAW. BECAUSE
INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT SUCH
HOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES
9
<PAGE>
DISCUSSED BELOW TO SUCH STOCKHOLDER AND THE PARTICULAR TAX EFFECTS OF THE OFFER
AND THE MERGER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND OTHER
TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger
(including pursuant to the exercise of appraisal rights) will be a taxable
transaction for federal income tax purposes (and also may be a taxable
transaction under applicable state, local and other income tax laws). In
general, for federal income tax purposes, a holder of Shares will recognize gain
or loss equal to the difference between the holder's adjusted tax basis in the
Shares sold pursuant to the Offer or converted to cash in the Merger and the
amount of cash received therefor. Gain or loss must be determined separately for
each block of Shares (i.e., Shares acquired at the same cost in a single
transaction) sold pursuant to the Offer or converted to cash in the Merger. Such
gain or loss will be capital gain or loss (other than, with respect to the
exercise of appraisal rights, amounts, if any, which are or are deemed to be
interest for federal income tax purposes, which amounts will be taxed as
ordinary income) and will be (i) long-term gain or loss if, on the date of sale
(or, if applicable, the date of the Merger), the Shares were held for more than
one year. In the case of an individual, net long-term capital gain may be
subject to a reduced rate of tax and net capital losses may be subject to limits
on deductibility.
Payments in connection with the Offer or the Merger may be subject to
'backup withholding' at a 31% rate. Backup withholding generally applies if the
stockholder (a) fails to furnish its social security number or other taxpayer
identification number ('TIN'), (b) furnishes an incorrect TIN, (c) fails
properly to include a reportable interest or dividend payment on its federal
income tax return or (d) under certain circumstances, fails to provide a
certified statement, signed under penalties of perjury, that the TIN provided is
its correct number and that it is not subject to backup withholding. Backup
withholding is not an additional tax but merely an advance payment, which may be
refunded to the extent it results in an overpayment of tax. Certain persons
generally are entitled to exemption from backup withholding, including
corporations and financial institutions. Certain penalties apply for failure to
furnish correct information and for failure to include reportable payments in
income. Each stockholder should consult with his own tax advisor as to his
qualification for exemption from backup withholding and the procedure for
obtaining such exemption. Tendering stockholders may be able to prevent backup
withholding by completing the Substitute Form W-9 included in the appropriate
Letter of Transmittal.
6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES.
According to the Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1998 (the 'Company 10-K'), the Shares trade on the NYSE
under the symbol 'TSX.' The Company completed its initial public offering in May
1998 (the third quarter of its fiscal year 1998).
According to the Company 10-K, it is the Company's policy not to pay
dividends but, instead, to retain earnings to support the growth of its
operations and to reduce its outstanding debt, and the Company's credit
agreement limits the Company's ability to pay dividends in any fiscal year.
Pursuant to the Merger Agreement, the Company has agreed not to declare, set
aside for payment or pay any dividends or other distributions with respect to
the Shares prior to consummation of the Merger (except the declaration and
payment of dividends by a wholly owned subsidiary of the Company to its parent).
The following table sets forth the high and low sales prices per Share on the
NYSE for the periods indicated, as reported in published financial sources.
10
<PAGE>
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
Year Ended September 30, 1998:
Third Quarter................................ $17.31 $14.00
Fourth Quarter............................... 16.31 6.00
Year Ended September 30, 1999:
First Quarter................................ 11.13 5.13
Second Quarter............................... 9.75 5.88
Third Quarter................................ 10.63 6.88
Fourth Quarter............................... 9.06 5.13
Year Ending September 30, 2000:
First Quarter (through November 4, 1999)..... 9.25 5.25
------ ------
</TABLE>
The closing sale price per Share on the NYSE on October 29, 1999, the last
full day of trading prior to the public announcement of Offeror's intention to
make the Offer, was $6.63. The closing sale price per Share on the NYSE on
November 4, 1999, the last full day of trading prior to the commencement of the
Offer, was $9.00. Stockholders are urged to obtain current market quotations for
the Shares and to review all information received by them from the Company,
including the materials referred to in Section 8, 'Certain Information
Concerning the Company.'
7. EFFECT OF OFFER ON NEW YORK STOCK EXCHANGE LISTING, MARKET FOR SHARES AND SEC
REGISTRATION.
The purchase of the Shares by Offeror pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and may reduce the number
of holders of Shares, which could adversely affect the liquidity and market
value of the remaining Shares, if any, held by stockholders other than Offeror.
The Shares are currently listed and traded on the NYSE, which constitutes
the principal trading market for the Shares. Depending upon the number of Shares
purchased pursuant to the Offer, the Shares may no longer meet the requirements
of the NYSE for continued listing and may, therefore, be delisted from such
exchange. According to the NYSE's published guidelines, the NYSE will consider
delisting shares if, among other things, the number of publicly held shares
(excluding shares held by officers, directors, their immediate families and
other concentrated holdings of 10% or more) is less than 600,000 (subject to
proportionate reduction if the unit of trading is less than 100 shares) or there
are fewer than 400 stockholders (or, if the average trading volume for the most
recent 12 months is less than 100,000 shares, fewer than 1,200 stockholders).
The Company 10-K states that, as of December 10, 1998, the Company had
approximately 470 holders of record of Shares, and the Company represented in
the Merger Agreement that, as of the date thereof, 17,277,054 Shares were
outstanding. If, as a result of the purchase of Shares pursuant to the Offer,
the Shares no longer meet the requirements of the NYSE for continued listing and
the listing of Shares is discontinued, the market for the Shares could be
adversely affected.
If the NYSE was to delist the Shares, it is possible that the Shares would
trade on another securities exchange or in the over-the-counter market and that
price quotations for the Shares would be reported by such exchange or through
the National Association of Securities Dealers Automated Quotation National
Market System or other sources. The extent of a public market for the Shares and
availability of such quotations would, however, depend upon such factors as the
number of holders and/or the aggregate market value of the publicly held Shares
at such time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration of the Shares under
the Exchange Act and other factors.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the Commission
if there are fewer than 300 record holders of Shares. If such registration was
terminated, the Company would no longer legally be required to disclose publicly
in proxy materials distributed to stockholders the information which it now must
provide under the Exchange Act or to make public disclosure of financial and
other information in annual, quarterly and other reports required to be filed
with the Commission under the Exchange Act; the officers, directors and 10%
stockholders of the Company would no longer be subject to the 'short-
11
<PAGE>
swing' insider trading reporting and profit recovery provisions of the Exchange
Act or the proxy statement requirements of the Exchange Act in connection with
stockholders' meetings; and the Shares would no longer be eligible for NYSE
reporting or for continued inclusion on the Federal Reserve Board's 'margin
list.' Furthermore, if such registration was terminated, persons holding
'restricted securities' of the Company may be deprived of their ability to
dispose of such securities under Rule 144 promulgated under the Securities Act
of 1933, as amended (the 'Securities Act').
Offeror intends to seek delisting of the Shares from the NYSE and to cause
the Company to apply for termination of registration of the Shares under the
Exchange Act as soon after the completion of the Offer as the requirements for
such delisting and termination are met. If registration of the Shares is not
terminated prior to the Merger, then the Shares will cease to be reported on the
NYSE and the registration of the Shares under the Exchange Act will be
terminated following the consummation of the Merger.
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
Except as specifically set forth herein, the information concerning the
Company contained in this Offer to Purchase has been taken from or is based upon
publicly available documents and records on file with the Commission and other
public sources. Neither Parent nor Offeror has any knowledge that would indicate
that any statements contained herein based on such documents and records are
untrue. However, neither Parent nor Offeror assumes any responsibility for the
accuracy or completeness of the information concerning the Company, whether
furnished by the Company or contained in such documents and records, or for any
failure by the Company to disclose events which may have occurred or which may
affect the significance or accuracy of any such information but which are
unknown to Offeror.
The Company is a Delaware corporation with its principal executive offices
located at 2527 Willowbrook Road, Suite 200, Dallas, Texas 75220-4420. According
to the Company 10-K, the Company is both (i) a leading distributor of aerospace
fasteners, fastening systems and related hardware and (ii) a leading provider of
customized inventory management services to original equipment manufacturers of
aircraft and aircraft components, to commercial airlines, and to aircraft
maintenance, repair and overhaul facilities, based on annual sales by the
Company and its competitors in the aerospace hardware industry.
Set forth below is certain summary consolidated financial information with
respect to the Company and its subsidiaries excerpted or derived from the
consolidated financial statements presented in the Company 10-K. More
comprehensive financial information is included in that report and in other
documents filed by the Company with the Commission (which may be inspected or
obtained in the manner set forth below), and the following summary is qualified
in its entirety by reference to those materials and all of the financial
information and notes contained therein or incorporated therein by reference.
12
<PAGE>
TRISTAR AEROSPACE CO.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
-----------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues............................................... $185,945 $140,719 $ 3,555
Gross profit........................................... 59,573 44,326 1,113
Selling, general and administrative expenses........... 27,944 21,048 463
Compensation expense of stock options.................. 1,486 -- --
Operating income....................................... 30,143 23,278 650
Interest expense and other income...................... 5,311 5,116 184
Provision for income taxes............................. 9,048 6,559 177
Net income............................................. 15,783 11,603 289
Earnings per share:
Basic............................................. $ 0.94 $ 0.73 $ 0.02
Diluted........................................... 0.88 0.70 0.02
Weighted average shares Outstanding:
Basic............................................. 16,741 15,897 15,118
Diluted........................................... 18,011 16,509 15,118
</TABLE>
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
-----------------------------
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Current assets......................................... $141,915 $ 99,680 $86,611
Total assets........................................... 155,758 110,235 97,216
Current liabilities.................................... 27,219 28,076 22,308
Long-term debt, less current maturities................ 75,000 49,000 55,500
Stockholders' equity................................... 53,539 33,159 19,408
</TABLE>
Results for Fiscal Year 1999; Forecasts for Fiscal Years 2000 and 2001. On
November 4, 1999, the Company released its unaudited results for fiscal year
1999. Also, during the course of discussions between Parent and the Company that
led to the execution of the Merger Agreement (see Section 11, 'Background of
Offer'), the Company provided Parent with certain information relating to the
Company which may not be publicly available. The information most recently
provided to Parent included the Company's financial forecasts for fiscal years
2000 and 2001. The forecasts were developed by the Company's senior management
based on their assumptions for macroeconomic conditions, industry conditions,
revenues, gross profits and operating expenses. That information is summarized
below (the following information has been excerpted from the materials presented
to Parent and does not reflect consummation of the Offer or the Merger):
TRISTAR AEROSPACE CO.
UNAUDITED FINANCIAL INFORMATION FOR FISCAL YEAR 1999
AND FORECASTED FINANCIAL INFORMATION FOR FISCAL YEARS 2000 AND 2001
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------------
2001 2000 1999
---- ---- ----
<S> <C> <C> <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Revenues.............................................. $231,260 $219,837 $207,442
Gross profit.......................................... 67,065 65,346 65,568
Selling, general and administrative expenses.......... 37,154 36,921 32,592
Operating income...................................... 29,911 28,425 32,976
Interest expense and other income..................... 7,168 8,457 7,543
Provision for income taxes............................ 8,870 7,787 9,846
Net income............................................ 13,873 12,180 15,587
</TABLE>
The Company has advised Parent as follows: The foregoing forecasts for
fiscal years 2000 and 2001 contain 'forward-looking statements' within the
meaning of Section 21E of the Exchange Act.
13
<PAGE>
Forward-looking statements also include any assumptions relating to the
foregoing. Certain important factors which may cause actual results to vary
materially from such forward-looking statements appear under the heading 'Risk
Factors' in the Company 10-K. A copy of that report may be obtained at the
offices of the Commission in the same manner as set forth below under 'Available
Information.' All subsequent written or oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified by those factors.
The Company has informed Parent that the Company does not as a matter of
course make public any forecasts or projections as to future performance or
earnings; the forecasts set forth above are included in this Offer to Purchase
only because the information was made available to Parent by the Company. The
Company has informed Parent that the forecasts were prepared for internal use
and were not prepared with a view to public disclosure or compliance with the
published guidelines of the Commission or the guidelines established by the
American Institute of Certified Public Accountants regarding projections or
forecasts. The Company has also informed Parent that the forecasts were prepared
using accounting policies consistent with the Company's actual results for
fiscal 1999 and that a summary of those accounting policies is located in the
Company 10-K. There will usually be differences between the forecasted and
actual results, because events and circumstances frequently do not occur as
expected, and those differences may be material. The Company has informed Parent
that the forecasts were based on assumptions showing a reduction in the revenue
growth rate and gross profit margin for the years 2000 and 2001, that such
reduction is due to an expected slowdown in the aircraft production rate of the
commercial transport sector which would result in lower demand for aerospace
hardware, and that the impact of the expected commercial transport production
decline could be more or less significant than management anticipates as a
result of numerous economic and market factors beyond the Company's control.
Forecasted information of this type is based on estimates and assumptions
that are inherently subject to significant economic and competitive
uncertainties and contingencies, all of which are difficult to predict and
many of which are beyond the control of the Company, Offeror or Parent or
their respective advisors. Many of the assumptions upon which the forecasts
were based, none of which were approved by Parent or Offeror, are dependent
upon economic forecasting (both general and specific to the Company's
businesses), which is inherently uncertain and subjective. The inclusion
of the foregoing forecasts should not be regarded as an indication
that the Company, Offeror, Parent or any other person who received such
information considers it an accurate prediction of future events, and neither
Offeror nor Parent has relied on them as such. None of the Company, Offeror or
Parent or their advisors assumes any responsibility for the accuracy or validity
of any of the forecasts.
Available Information. The Company is subject to the information and
reporting requirements of the Exchange Act and, in accordance therewith, is
obligated to file reports and other information with the Commission relating to
its business, financial condition, and other matters. Information as of
particular dates concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities, any material interests of such persons in transactions
with the Company, and other matters is required to be disclosed in proxy
statements distributed to the Company's stockholders and filed with the
Commission. Such reports, proxy statements, and other information should be
available for inspection at the Commission's Public Reference Room, Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and copies should be obtainable
upon payment of the Commission's customary charges by writing to the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
Such material should also be available for inspection and copying at the
regional offices of the Commission located at Seven World Trade Center, 13th
Floor, New York, New York, 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. The Commission also maintains a World Wide
Web site on the Internet at http://www.sec.gov that contains reports, proxy
statements and other information regarding registrants that file electronically
with the Commission.
9. CERTAIN INFORMATION CONCERNING OFFEROR AND PARENT.
Information Concerning Offeror
Offeror, a Delaware corporation, was recently incorporated for the purpose
of making the Offer and consummating the Merger. All of the outstanding capital
stock of Offeror is owned by Parent. Until
14
<PAGE>
immediately prior to the time it purchases Shares pursuant to the Offer, it is
not anticipated that Offeror will have any significant assets or liabilities or
engage in activities other than those incidental to its formation and
capitalization and the transactions contemplated by the Offer and the Merger.
Since Offeror is newly formed and has minimal assets and capitalization, no
meaningful financial information is available for it. Offeror is not subject to
the informational filing requirements of the Exchange Act.
The principal executive offices of Offeror are located at 101 Columbia
Road, Morris Township, New Jersey 07962, telephone 973-455-2000. The name,
business address, past and present principal occupations and citizenship of each
of the directors and executive officers of Offeror are set forth in Annex I to
this Offer to Purchase.
Information Concerning Parent
Parent, a Delaware corporation, is a leading advanced technology and
manufacturing company serving customers worldwide with aerospace products and
services, automotive products, chemicals, fibers, plastics and advanced
materials. Parent operates through eleven strategic business units that offer
products and services which are sold principally for use in the following
applications: commercial and military aviation, defense, space, automotive and
heavy vehicles, electronics, carpeting, refrigeration, construction, computers,
utilities, pharmaceutical and agriculture.
Parent's strategic business units have been aggregated into five reportable
segments. A description of Parent's five reportable segments follows:
(i) Aerospace Systems. Parent's Aerospace Systems segment accounted
for approximately 32% of Parent's 1998 total sales. This segment provides
sales and service for a wide range of aerospace products for both original
equipment manufacturers and aftermarket customers, including:
(a) systems and components for commercial, military, regional and
general aviation aircraft, including environmental control systems,
aircraft wheels and brakes, power generation systems and engine
controls;
(b) advanced electronics, avionics and lighting for military
aircraft, defense and space stations, large and regional air transport,
business and general aviation, including communications, navigation,
flight control and management, weather radar systems, microwave landing
and electronic systems, flight guidance and control systems, sensors and
components, automatic test systems, cockpit display systems and internal
and external aircraft lighting;
(c) maintenance, repair and overhaul services and spares and
hardware sales to support aerospace aftermarket customers; and
(d) management and technical services for the government.
(ii) Specialty Chemicals & Electronic Solutions. Parent's Specialty
Chemicals & Electronic Solutions segment accounted for approximately 15% of
Parent's 1998 total sales. This segment manufactures engineered materials
used in numerous applications and technologically advanced materials used
in the manufacturing of electronics and semiconductors. The Specialty
Chemicals & Electronic Solutions segment's products include:
(a) specialty and fine chemical products, including hydrofluoric
acid, polyethylene and petroleum-based specialty waxes and wax blends,
environmentally safer fluorocarbons, pharmaceutical bulk active and
advanced intermediate chemicals and process technology, for use in a
diverse range of applications, including pharmaceutical, polymer, crop
protection, petroleum, personal care products, security coding,
semiconductor, air conditioning and refrigeration, medical, coatings,
textile, electronics and nuclear; and
(b) materials and solutions for the global electronics market,
including printed circuit boards, interconnect materials and solutions
for semiconductor wafer manufacturing, electron beam curing equipment
and amorphous metals.
(iii) Turbine Technologies. Parent's Turbine Technologies segment
accounted for approximately 24% of Parent's 1998 total sales. This segment
provides products based on technologically advanced turbine applications.
Turbine Technologies' products include:
15
<PAGE>
(a) auxiliary power units for commercial and regional airlines and
business and military aircraft;
(b) turbofan, turboshaft and turboprop propulsion engines for
business aviation, regional airlines, military aircraft and marine and
industrial markets; and
(c) turbochargers, charged air coolers, radiators and complete
cooling modules for passenger cars, racecars, trucks, buses,
agricultural equipment, diesel locomotives and marine, mining,
construction, military, aviation, and power generation applications.
(iv) Performance Polymers. Parent's Performance Polymers segment
accounted for approximately 13% of Parent's 1998 total sales. This segment
manufactures high performance fibers, specialty films, plastics and
intermediate chemicals such as caprolactam, the base chemical used to make
nylon. These products have broad applications in industries such as
commercial and residential carpeting, autos and auto components, food and
pharmaceutical packaging, specialty chemicals and electronics.
(v) Transportation Products. Parent's Transportation Products segment
accounted for approximately 16% of Parent's 1998 total sales. This segment
provides parts, supplies and systems for vehicles to both original
equipment manufacturers and aftermarket customers. Transportation Products
manufactures and distributes:
(a) well-recognized consumer-branded automotive products for
aftermarket customers, as well as to automotive original equipment
manufacturers and installers, such as oil and air filters (FRAM'r'),
spark plugs (Autolite'r') and car care products including antifreeze,
windshield washer fluids and waxes, washes and specialty cleaners (for
example, Prestone'r' and Simoniz'r');
(b) brake friction materials, including disc brake pads and drum
brake linings, and aftermarket brake hard parts, used for a broad range
of car, truck, railway and aerospace applications worldwide; and
(c) air brake and filtration systems and components for heavy-duty
trucks, tractors, trailers, buses and other commercial vehicles sold
through a joint venture owned 65% by Parent and 35% by Knorr-Bremse AG
of Germany.
The principal executive offices of Parent are located at 101 Columbia Road,
Morris Township, New Jersey 07692, telephone 973-455-2000. The name, business
address, past and present principal occupations and citizenship of each of the
directors and executive officers of Parent are set forth in Annex I to this
Offer to Purchase.
Parent is subject to the informational filing requirements of the Exchange
Act. Reports filed by Parent with the Commission may be inspected and copies
obtained at the offices of the Commission in the same manner as set forth with
respect to the Company in Section 8, 'Certain Information Concerning the
Company -- Available Information.' In addition, stockholders of the Company may
also obtain copies of Parent's 1998 Annual Report by contacting the Office of
the Secretary of Parent at Parent's principal executive offices set forth above.
Information Concerning Merger of Parent and Honeywell
On June 7, 1999, Parent and Honeywell Inc. ('Honeywell') announced that
they had entered into a merger agreement providing for the combination of the
two companies. Under that agreement, Parent will be renamed Honeywell
International Inc. ('Honeywell International') at the effective time of the
combination. When the combination is completed, Honeywell stockholders will be
entitled to receive 1.875 shares of Honeywell International common stock for
each share of Honeywell common stock plus cash in lieu of any fractional shares.
Blossom Acquisition Corp., a wholly owned subsidiary of Parent, will merge with
and into Honeywell at the effective time of the combination, and Honeywell will
become a wholly owned subsidiary of Honeywell International. The headquarters of
Honeywell International will remain in Morris Township, New Jersey at the
current location of Parent's headquarters.
The combination with Honeywell is subject to approval by both Parent and
Honeywell stockholders and by European Commission and U.S. antitrust regulators,
as well as to other customary
16
<PAGE>
conditions. The stockholders of Parent and Honeywell voted to approve the
combination at special meetings held on September 1, 1999. In addition, Parent
expects that the U.S. Department of Justice will not challenge the proposed
combination, subject to final entry of a consent decree requiring the
divestiture of portions of Parent's and Honeywell's avionics businesses
accounting for approximately $250 million in revenues in 1998. Parent expects
that the combination will be completed by the end of 1999.
Honeywell was founded in 1885 with the invention of the automatic
thermostat control for home heating and has evolved into what is today one of
the leading technology and controls companies in the world, serving customers in
homes and commercial buildings, in industry, and in space and aviation.
Honeywell has three businesses, all with a focus on controls:
(i) Home and Building Control. Honeywell's Home and Building Control
business is a global provider of comfortable, healthy, safe and
energy-efficient indoor environments, offering more than 3,500 products to
both the consumer and the building industry. The Home and Building Control
business provides products, services and solutions to create efficient,
safe, comfortable indoor environments, offering controls for heating,
ventilating, humidification and air-conditioning equipment; security and
fire alarm systems; home automation systems; energy-efficient lighting
controls; and building management systems and services. This business
accounted for approximately 41% of Honeywell's 1998 total sales.
(ii) Industrial Control. Honeywell is a worldwide provider of
automation solutions from sensors to integrated systems, serving industries
such as hydrocarbon processing, chemicals, and pulp and paper. The
Industrial Control business provides one-stop, integrated automation
solutions, including systems, products and services for process industries
such as hydrocarbon processing, chemicals, and pulp and paper, and
manufactures switches and sensors for use in vehicles, consumer products,
data communication and industrial process applications and systems, as well
as smart position-sensing devices and systems used in factories and package
distribution systems. The Industrial Control business accounted for
approximately 30% of Honeywell's 1998 total sales.
(iii) Space and Aviation Control. Honeywell is a supplier of avionics
systems and products for the commercial, military and space markets with
customers ranging from aircraft manufacturers and business aircraft
operators to prime space contractors and the U.S. government. Honeywell's
systems are on board virtually every commercial aircraft produced in the
Western world and every manned flight launched in the United States. This
business accounted for approximately 28% of Honeywell's 1998 total sales.
The foregoing description of Honeywell was obtained from Honeywell's
filings with the Commission and other public sources, and neither Parent nor
Offeror assumes any responsibility for the accuracy or completeness of the
description. For more information about the proposed combination with Honeywell,
you may refer to the joint proxy statement/prospectus filed by Parent and
Honeywell with the SEC and dated July 23, 1999 (Registration No. 333-82049) (the
'Joint Prospectus'). Copies of that filing, as well as other filings by
Honeywell with the Commission, may be inspected and copies obtained at the
offices of the Commission in the same manner as set forth with respect to the
Company in Section 8, 'Certain Information Concerning the Company -- Available
Information.'
Financial Information Concerning Parent
Set forth below is a summary of certain consolidated financial data
concerning Parent excerpted or derived from the consolidated financial
statements presented in the Parent's Annual Reports on Form 10-K for the fiscal
years ended December 31, 1998 and 1997, Parent's Quarterly Report on Form 10-Q
for the second quarter ended June 30, 1999, Parent's Quarterly Report on
Form 10-Q for the second quarter ended June 30, 1998, and Parent's Quarterly
Report on Form 10-Q for the second quarter ended June 30, 1997, all of which are
incorporated herein by this reference. Copies of those reports may be obtained
at the offices of the Commission in the same manner as set forth with respect to
the Company in Section 8, 'Certain Information Concerning the
Company -- Available Information.'
17
<PAGE>
ALLIEDSIGNAL INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, YEAR ENDED DECEMBER 31,
--------------------------- ------------------------------
1999* 1998* 1997* 1998 1997 1996
----- ----- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
INCOME DATA:
Net sales........................... $ 7,414 $ 7,515 $ 6,905 $15,128 $14,472 $13,971
Net income.......................... 735 650 564 1,331 1,170 1,020
Earnings per share:
Basic.......................... $ 1.33 $ 1.15 $ 1.00 $ 2.37 $ 2.07 $ 1.80
Assuming dilution.............. 1.30 1.13 $ 0.97 2.32 2.02 1.76
</TABLE>
<TABLE>
<CAPTION>
AT JUNE 30, AT DECEMBER 31,
--------------------------- ---------------------------
1999* 1998* 1997* 1998 1997 1996
----- ----- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Net working capital................. $ 1,291 $ 1,394 $ 2,044 $ 408 $ 1,137 $ 2,143
Total assets........................ 14,089 13,897 12,912 15,560 13,707 12,829
Long-term debt...................... 1,453 1,638 1,263 1,476 1,215 1,317
Shareowner's equity................. 5,026 4,823 4,352 5,297 4,386 4,180
</TABLE>
- ------------
* Unaudited.
10. SOURCE AND AMOUNT OF FUNDS.
If all Shares (including Shares covered by vested options (other than
out-of-the-money Options) outstanding at October 31, 1999) are tendered to and
purchased by Offeror, the aggregate purchase price, together with Parent's
estimated related fees and expenses, will be approximately $189 million. Offeror
intends to obtain all of such funds from Parent which in turn would obtain such
funds from Parent's working capital. Although Parent has sufficient working
capital to consummate the Offer, Parent contemplates augmenting its working
capital in the near future through the issuance of commercial paper in the
public markets at prevailing market terms. Except for the issuance of commercial
paper, no funds are expected to be, directly or indirectly, borrowed from any
third party for the purpose of the Offer. The Offer is not conditioned on
Offeror or Parent obtaining any financing.
11. BACKGROUND OF THE OFFER.
Parent's management continually reviews the results of operations of
participants in the aerospace industry. The Company engages in lines of business
complementary to those of Parent's Hardware Product Group, a global distributor
of aerospace consumable hardware and an operating unit within Parent's Aerospace
Services strategic business unit ('Aerospace Services'). Accordingly, Parent is
familiar with the business activities of the Company.
At the request of Parent, on March 31 and April 1, 1999, P. Quentin
Bourjeaurd, Chairman, President and Chief Executive Officer of the Company, met
with Thomas Schmidt, former Vice President and General Manager, Hardware Product
Group, and Ricardo Navarro, Director, Corporate Development, of Parent, in
Dallas, Texas. They were joined by James Taiclet, President, Aerospace Services,
on April 1, 1999. The parties discussed the Company's willingness to explore
possible strategic alternatives involving Parent, including a possible
acquisition of the Company. The parties concluded the meeting by determining
that they should pursue further discussions.
On April 5, 1999, Parent and the Company executed a Confidentiality
Agreement, which required each party and its representatives to maintain the
confidentiality of certain information provided to them by or on behalf of the
other party, and which also included customary standstill provisions entered
into by Parent with respect to the Company.
On May 5, 1999, representatives of Parent, including Mr. Taiclet and James
Gelly, currently Vice President and Treasurer of Parent, telephoned
Mr. Bourjeaurd to express Parent's continued willingness to explore Parent's
possible acquisition of the Company. Messrs. Taiclet and Gelly requested that
the
18
<PAGE>
Company provide Parent with preliminary information regarding the Company's
business and operations and stated that Parent would review that information and
contact the Company regarding its willingness to make a proposal.
Mr. Bourjeaurd agreed to Parent's request to conduct due diligence. On May 12,
1999, Goldman, Sachs & Co., the Company's financial advisor, forwarded
preliminary materials regarding the Company to Parent for its review.
In early June 1999, Mr. Taiclet called Mr. Bourjeaurd and requested
permission for Parent to conduct further due diligence on the Company. In
response to Mr. Taiclet's request, on June 17 and 18, 1999, representatives of
Parent met with representatives of the Company in Dallas to conduct both an
on-site and off-site review of the Company's business and operations. During the
course of such review, the Company provided Parent with financial forecasts for
the remainder of fiscal year 1999 as well as fiscal years 2000 and 2001.
On June 23, 1999, Mr. Taiclet and Mr. Bourjeaurd met in Phoenix, Arizona.
At that meeting, Mr. Taiclet indicated that, based upon Parent's due diligence
to date, and subject to further due diligence, Parent would be willing to
consider a possible acquisition of the Company at a price around $10 per Share.
Mr. Bourjeaurd stated that the Company was unwilling to pursue further
discussions on that basis. Promptly thereafter, the Company requested that
Parent return or destroy all due diligence materials previously furnished to
Parent.
In mid-September 1999, Robert D. Johnson, President and Chief Executive
Officer of AlliedSignal Aerospace, spoke with Brian Barents, an outside director
of the Company, and indicated that Parent might be willing to renew discussions.
Mr. Bourjeaurd called Mr. Taiclet on September 21, 1999, and inquired as to
whether Parent was interested in resuming discussions concerning a possible
business combination between the Company and Parent. Mr. Taiclet indicated that
he was willing to meet with Mr. Bourjeaurd to discuss Parent's interest in
pursuing an acquisition of the Company. Accordingly, on October 1, 1999,
Mr. Taiclet met with Mr. Bourjeaurd in Dallas. During that meeting, Mr. Taiclet
expressed Parent's willingness to consider a possible acquisition of the Company
at a price of $8.50 to $11 per Share, subject to Parent's completion of its due
diligence review, including a review of the Company's revised financial
forecasts.
On October 12, 1999, Mr. Bourjeaurd and Douglas Childress, Chief Financial
Officer of the Company, together with representatives of Goldman, Sachs & Co.,
met in Phoenix with Jeffrey Reichard, Vice President and General Manager,
Hardware Product Group, and other representatives of Parent. The Company
reviewed with Parent its estimated financial results for fiscal year 1999 and
revised financial forecasts for fiscal years 2000 and 2001. Also at that
meeting, Parent provided the Company with additional due diligence requests.
Mr. Bourjeaurd requested that Parent express a more specific price range for the
Company's Shares prior to the Company permitting Parent to complete its due
diligence review. In a series of telephone calls on October 19, 1999,
Mr. Taiclet advised Mr. Bourjeaurd that Parent was interested in acquiring the
Company at a price range of $8.50 to $9.50 per Share, subject to its
satisfactory completion of its remaining due diligence. Mr. Bourjeaurd agreed to
permit Parent to proceed with its due diligence review.
From October 26 through October 29, 1999, Parent continued its due
diligence review of the Company, and at Parent's request the Company provided
Parent with updated financial forecasts for fiscal years 2000 and 2001, as well
as a copy of its unaudited results for fiscal year 1999. Also during that
period, representatives of Parent and the Company met in person in Dallas and
engaged in telephonic discussions to negotiate the terms of the Merger Agreement
and the Shareholders Agreement and, at the request of Parent, an amendment to
Mr. Bourjeaurd's employment agreement (the 'Employment Agreement Amendment').
In the late afternoon of Friday, October 29, 1999, representatives of
Parent conveyed to Mr. Bourjeaurd a proposal of $9.50 per Share, subject to
completion of remaining due diligence, which Parent expected to complete by
October 31. On the afternoon of Sunday, October 31, 1999, Parent completed its
due diligence review of the Company, and Mr. Taiclet and Martin Cohen (Vice
President, Corporate Development, of Parent) called Mr. Bourjeaurd and stated
that Parent was willing to acquire the Company at a price of $9.50 per Share in
cash, subject to the satisfactory completion of definitive documentation.
Representatives of Parent and the Company thereafter concluded their
negotiations of such definitive documentation.
19
<PAGE>
The Merger Agreement, the Shareholders Agreement and the Employment
Agreement Amendment were executed and delivered in the evening of October 31,
1999. On the morning of November 1, 1999, the Company and Parent announced in a
press release the execution of the Merger Agreement.
12. PURPOSE OF THE OFFER; THE MERGER; PLANS FOR THE COMPANY.
Purpose. The purpose of the Offer and the Merger is for Offeror to acquire
control of, and the entire equity interest in, the Company. The purpose of the
Merger is for Offeror to acquire all Shares not purchased pursuant to the Offer.
Upon consummation of the Merger, the Company will become a wholly owned
subsidiary of Offeror. The Offer is being made pursuant to the Merger Agreement.
Approval. Under the Delaware General Corporation Law, as amended (the
'DGCL'), the approval of the Board of Directors of the Company and the
affirmative vote of the holders of a majority of the outstanding Shares may be
required to approve and adopt the Merger Agreement and the transactions
contemplated thereby, including the Merger. The Board of Directors of the
Company has unanimously approved and adopted the Merger Agreement and the
transactions contemplated thereby, and, unless the Merger is consummated
pursuant to the short-form merger provisions under the DGCL described below, the
only remaining required corporate action of the Company is the approval and
adoption of the Merger Agreement and the transactions contemplated thereby by
the affirmative vote of the holders of a majority of the Shares. Accordingly, if
the Minimum Condition is satisfied, Offeror will have sufficient voting power to
cause the approval and adoption of the Merger Agreement and the transactions
contemplated thereby without the affirmative vote of any other stockholders.
Stockholder Meetings. In the Merger Agreement, the Company has agreed, if a
stockholder vote is required, to take all action necessary in accordance with
the DGCL and its Certificate of Incorporation and By-laws to convene a meeting
of its stockholders as promptly as practicable following consummation of the
Offer for the purpose of considering and voting on the Merger. The Company,
acting through its Board of Directors, has further agreed that if a
stockholders' meeting is convened, the Board of Directors shall recommend that
stockholders of the Company vote to approve the Merger, but that such
recommendation may be withdrawn, modified or amended to the extent that the
Board of Directors concludes, in good faith after consultation with its outside
financial advisor, upon advice of outside legal counsel, that it is inconsistent
with its fiduciary duties under applicable law not to do so. In the event that
proxies are to be solicited from the Company's stockholders, the Company shall,
if and to the extent requested by Offeror, use its reasonable efforts to solicit
from stockholders of the Company proxies in favor of the Merger and shall take
all other reasonable action necessary or, in the opinion of Offeror, helpful to
secure a vote or consent of stockholders in favor of the Merger. At any such
meeting, all of the Shares then owned by Offeror and by any of its subsidiaries,
and all Shares for which the Company has received proxies to vote, will be voted
in favor of the Merger. The Company has also agreed to postpone the holding of
its Annual Meeting of Stockholders indefinitely pending consummation of the
Merger unless the Company is otherwise required to hold such meeting by the
DGCL.
Board Representation. If Offeror purchases Shares pursuant to the Offer
that, together with Shares that Parent, Offeror or any of their affiliates
beneficially own (excluding Shares held by the Company), constitute at least a
majority of the outstanding Shares, the Merger Agreement provides that the
Company shall increase the size of its Board of Directors to seven members and
Offeror will be entitled to designate representatives to serve on the Board in
the same proportion as the proportion of Shares beneficially owned by Parent and
its subsidiaries (including Offeror) following such purchase (except that, prior
to the Effective Time, at least one director of the Company shall be an
independent director). See Section 13, 'The Transaction Documents -- The Merger
Agreement -- Board of Directors.' Parent currently intends to designate a
majority of the directors of the Company following consummation of the Offer. It
is currently anticipated that Parent will designate some or all of Robert D.
Johnson, Peter M. Kreindler, Steven R. Loranger, Donald J. Redlinger, James D.
Taiclet and Richard F. Wallman, or such other persons listed on Annex I as
Parent shall determine, to serve as directors of the Company following
consummation of the Offer. Offeror expects that, subject to the exercise of such
individuals' fiduciary duties consistent with the provisions of the DGCL, such
representation would permit Offeror to exert substantial influence over the
Company's conduct of its business and operations.
20
<PAGE>
Short-form Merger. Under the DGCL, if Offeror acquires, pursuant to the
Offer, at least 90% of the outstanding Shares, Offeror will be able to approve
the Merger without a vote of the Company's stockholders. In such event, Parent
and Offeror anticipate that they will take all necessary and appropriate action
to cause the Merger to become effective as soon as reasonably practicable after
such acquisition, without a meeting of the Company's stockholders. If, however,
Offeror does not acquire at least 90% of the outstanding Shares pursuant to the
Offer or otherwise and a vote of the Company's stockholders is required under
the DGCL, a significantly longer period of time would be required to effect the
Merger. Pursuant to the Merger Agreement, the Company has agreed to take all
action necessary under the DGCL and its Certificate of Incorporation and By-laws
to convene a meeting of its stockholders promptly following consummation of the
Offer to consider and vote on the Merger, if a stockholders' vote is required.
Appraisal Rights. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, stockholders will have certain
rights under the DGCL to dissent and demand appraisal of, and to receive payment
in cash of the fair value of, their Shares. Such rights to dissent, if the
statutory procedures are met, could lead to a judicial determination of the fair
value of the Shares, as of the day prior to the date on which the stockholders'
vote was taken approving the Merger or similar business combination (excluding
any element of value arising from the accomplishment or expectation of the
Merger), required to be paid in cash to such dissenting holders for their
Shares. In addition, such dissenting stockholders would be entitled to receive
payment of a fair rate of interest from the date of consummation of the Merger
on the amount determined to be the fair value of their Shares. In determining
the fair value of the Shares, the court is required to take into account all
relevant factors. Accordingly, such determination could be based upon
considerations other than, or in addition to, the market value of the Shares,
including, among other things, asset values and earning capacity. In Weinberger
v. UOP, Inc., the Delaware Supreme Court stated, among other things, that 'proof
of value by any techniques or methods which are generally considered acceptable
in the financial community and otherwise admissible in court' should be
considered in an appraisal proceeding. Therefore, the value so determined in any
appraisal proceeding could be the same as, or more or less than, the purchase
price per Share in the Offer or the Merger consideration.
In addition, several decisions by Delaware courts have held that, in
certain circumstances, a controlling stockholder of a company involved in a
merger has a fiduciary duty to other stockholders which requires that the merger
be fair to such other stockholders. In determining whether a merger is fair to
minority stockholders, Delaware courts have considered, among other things, the
type and amount of consideration to be received by the stockholders and whether
there was fair dealing among the parties. The Delaware Supreme Court stated in
Weinberger and Rabkin v. Philip A. Hunt Chemical Corp. that the remedy
ordinarily available to minority stockholders in a cash-out merger is the right
to appraisal described above. However, a damages remedy or injunctive relief may
be available if a merger is found to be the product of procedural unfairness,
including fraud, misrepresentation or other misconduct.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain 'going private' transactions and which may under
certain circumstances be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer or otherwise
in which Offeror seeks to acquire the remaining Shares not held by it. Offeror
believes, however, that Rule 13e-3 will not be applicable to the Merger if the
Merger is consummated within one year after the Expiration Date at the same per
Share price as paid in the Offer. If applicable, Rule 13e-3 requires, among
other things, that certain financial information concerning the Company and
certain information relating to the fairness of the proposed transaction and the
consideration offered to minority stockholders in such transaction be filed with
the Commission and disclosed to stockholders prior to consummation of the
transaction.
Plans for the Company. Following the Offer and the Merger, Parent intends
to integrate the Company into the Hardware Product Group and conduct the
Company's business on a basis generally consistent with the Company's existing
plans and programs. However, Parent will continue to evaluate the business and
operations of the Company and will take such actions as it deems appropriate
under the circumstances then existing.
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Confidentiality; Standstill. In connection with granting Parent and its
representatives access to certain confidential information of the Company,
Parent executed a Confidentiality Agreement with the Company, dated April 5,
1999 and reaffirmed on October 7, 1999 (the 'Confidentiality Agreement'). Among
other things, the Confidentiality Agreement provides that, for a period of 18
months from the date of the Confidentiality Agreement, Parent will not, without
the prior consent of the Board of Directors of the Company or its designee,
directly or indirectly, in any manner, do the following (the 'Standstill
Provisions'), except with respect to certain permitted actions by benefit plan
investment vehicles of Parent and its affiliates:
(a) acquire, offer or propose to acquire, solicit an offer to sell or
agree to acquire, directly or indirectly, alone or in concert with others,
by purchase or otherwise, any voting securities of the Company;
(b) make, or in any way participate in, directly or indirectly, alone
or in concert with others, any 'solicitation' of 'proxies' (as such terms
are used in the proxy rules promulgated pursuant to Section 14 of the
Exchange Act) to vote, or seek to advise or influence in any manner
whatsoever any person with respect to the voting of, any voting securities
of the Company;
(c) form, join or in any way participate in a 'group' (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting
securities of the Company or any of its subsidiaries;
(d) acquire, offer to acquire or agree to acquire, directly or
indirectly, alone or in concert with others, by purchase or otherwise,
(i) any of the assets, tangible and intangible, of the Company or
(ii) direct or indirect rights or options to acquire any assets of the
Company or any of its subsidiaries or affiliates, except for such assets as
are then being offered for sale by the Company or any of its subsidiaries
or affiliates;
(e) arrange, or in any way participate, directly or indirectly, in any
financing for the purchase of any voting securities of the Company or any
of its subsidiaries;
(f) otherwise act, alone or in concert with others, to seek to propose
to the Company or any of its subsidiaries or affiliates or any of their
respective stockholders any merger, business combination, restructuring,
recapitalization or other transaction involving the Company to or with
Parent to otherwise seek, alone or in concert with others, to control,
change or influence the management, board of directors or policies of the
Company or any of its subsidiaries or affiliates;
(g) make any request or proposal to amend, waive or terminate any of
the foregoing provisions or take any initiative with respect to the Company
or any of its subsidiaries which could require the Company to make a public
announcement regarding any such prohibited initiative referred to above; or
(h) announce an intention to do, or enter into any arrangement or
understanding with others to do, any of the actions restricted or
prohibited under the foregoing provisions.
The Company waived the Standstill Provisions with respect to the Offer and
the Merger. In addition, in the Merger Agreement, the Company has agreed that,
notwithstanding the Standstill Provisions and other provisions of the
Confidentiality Agreement: (i) following any notification to Parent of a written
proposal that permits the Company to negotiate with or furnish information to
any third party in accordance with the Nonsolicitation Provisions (defined in
Section 13, 'The Transaction Documents -- The Merger
Agreement -- Nonsolicitation Obligations and Exceptions'), and until any
transaction resulting from such proposal shall have either been consummated or
the Company shall have received written notification that any such third party
shall no longer seek to engage in such transaction with or involving the
Company, Parent shall be entitled to propose or present to the Company any offer
in response to such third party's offer, and (ii) if, from the date of the
Merger Agreement until the effective time of the Merger (the 'Effective Time'),
any third party shall announce its intention to commence, or shall commence, any
tender offer to acquire Shares, Parent and Offeror shall be entitled to make any
public announcement or proposal, or to take any other action it or they may deem
appropriate, in response to such announcement or tender offer and which is
consistent with their obligations under the Merger Agreement. See Section 13,
'The Transaction Documents -- The Merger Agreement -- Nonsolicitation
Obligations and Exceptions.'
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Extraordinary Corporate Transactions. Except as indicated in this Offer to
Purchase, neither Parent nor Offeror have any present plans or proposals which
relate to or would result in an extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the Company or any of its
subsidiaries, a sale or transfer of a material amount of assets of the Company
or any of its subsidiaries or any material change in the Company's
capitalization or dividend policy or any other material changes in the Company's
corporate structure or business, or the composition of the Company's Board of
Directors or management.
13. THE TRANSACTION DOCUMENTS.
THE MERGER AGREEMENT
Commencement. The Merger Agreement provides for the commencement of the
Offer not later than five business days after the execution of the Merger
Agreement, provided that none of the Offer Conditions has occurred. Parent,
Offeror and the Company are required to use all reasonable efforts to take all
action as may be reasonably necessary or appropriate in order to effectuate the
Offer and the Merger as promptly as possible and to carry out the transactions
provided for or contemplated by the Merger Agreement.
Merger. The Merger Agreement provides that, as soon as practicable after
the approval and adoption of the Merger Agreement by the stockholders of the
Company, to the extent required by Delaware law, and the satisfaction or waiver,
if possible, of certain other conditions contained in the Merger Agreement, and
in no event later than five business days after such satisfaction or waiver,
Offeror (or another direct or indirect wholly owned subsidiary of Parent) will
be merged with and into the Company (the 'Merger'), with the Company continuing
as the surviving corporation (the 'Surviving Corporation') in the Merger under
the corporate name it possesses immediately prior to the Effective Time.
Notwithstanding the foregoing, the parties to the Merger Agreement have agreed
that Offeror may revise the structure of the Merger (including merging the
Company into Offeror or merging the Company with or into another direct or
indirect wholly owned subsidiary of Parent) provided that any such restructuring
does not adversely affect the stockholders of the Company or cause the Company
to breach its representations and warranties under the Merger Agreement.
In the Merger Agreement, the Company has represented to Parent and Offeror
that the Board of Directors of the Company has received the opinion of Goldman,
Sachs & Co., the Company's financial advisor, to the effect that the $9.50 per
Share in cash to be received by the holders of Shares (other than Parent or any
subsidiary thereof) pursuant to the Offer and the Merger is fair from a
financial point of view to such holders. A copy of that opinion is set forth in
full as an appendix to the Company's Solicitation/Recommendation Statement on
Schedule 14D-9 which is being mailed to the Company's stockholders, and
stockholders are urged to read the opinion in its entirety.
Vote Required to Approve Merger. See Section 12, 'Purpose of the Offer; The
Merger; Plans for the Company -- Stockholder Meetings.'
Conversion of Securities. At the Effective Time, each Share issued and
outstanding immediately prior thereto (other than Shares held in the treasury of
the Company or owned by Parent or any subsidiary of Parent, which shall
automatically be cancelled and retired) will automatically be cancelled and
extinguished and, other than Shares with respect to which appraisal rights are
properly exercised, will be converted into and become a right to receive the
Offer Price upon the surrender of the certificate formerly representing such
Share. Each share of common stock of Offeror issued and outstanding immediately
prior to the Effective Time shall, at the Effective Time, by virtue of the
Merger and without any action on the part of Offeror, the Company or the holders
of Shares, be converted into and shall thereafter evidence one validly issued
fully paid and nonassessable share of common stock of the Surviving Corporation.
Treatment of Stock Options. In the Merger Agreement, the Company has agreed
that, at the Effective Time, each holder of an outstanding option, warrant or
other right to acquire Shares (collectively the 'Options'), whether granted
under any employee or non-employee compensation plan, agreement or arrangement
of the Company, and whether or not then vested, shall be cancelled, and the
holders of fully vested Options shall be entitled to receive from the Surviving
Corporation, in
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cancellation of such vested Options, an amount in cash equal to the excess, if
any, of (a) the product of the number of Shares covered by such vested Options
multiplied by the Offer Price, over (b) the product of the number of Shares
covered by such vested Options multiplied by the per-Share exercise, purchase or
conversion price payable upon exercise, purchase or conversion of such vested
Options, subject to any required withholding taxes. The Company has agreed in
the Merger Agreement to take all action necessary to effectuate such provisions,
including obtaining any necessary consents of the holders of the Options.
Conditions to Obligations of All Parties to Merger Agreement. The
obligations of each of the parties to effect the Merger are subject to the
following conditions:
(i) the Merger shall have been approved and adopted by the vote of the
stockholders of the Company to the extent required by the DGCL;
(ii) all waiting, review and investigation periods (and any extension
thereof) applicable to the consummation of the Merger under the
Hart-Scott-Rodino Act shall have expired or been terminated;
(iii) there shall have been no law, statute, rule or order, domestic
or foreign, enacted or promulgated which would make consummation of the
Merger illegal;
(iv) no injunction or other order entered by a United States (state or
federal) court of competent jurisdiction shall have been issued and remain
in effect which would prohibit consummation of the Merger (but the parties
shall use their reasonable efforts to cause any such injunction or order to
be vacated or lifted); and
(v) Parent, Offeror or their affiliates shall have purchased Shares
validly tendered and not withdrawn pursuant to the Offer (but neither
Parent nor Offeror may invoke that condition if Parent or Offeror has
failed to purchase Shares so tendered and not withdrawn in violation of the
Merger Agreement or the Offer).
Conditions to Obligations of Offeror. See Section 15, 'Certain Conditions
to Offeror's Obligations.'
Schedule 14D-9. In the Merger Agreement, the Company has agreed that
simultaneously with, or as promptly as possible after, the commencement of the
Offer, it will file with the Commission and promptly mail to its stockholders a
Solicitation/Recommendation Statement on Schedule 14D-9 (the 'Schedule 14D-9')
containing the recommendation of the Board of Directors that the Company's
stockholders accept the Offer, tender their Shares in the Offer and, if
applicable, approve the Merger Agreement and the Merger (and such recommendation
shall not be withdrawn or adversely modified except by resolution of the Board
of Directors adopted in the exercise of applicable fiduciary duties upon the
advice of outside legal counsel and in accordance with the Merger Agreement).
Board of Directors. The Merger Agreement provides that, promptly upon the
payment for any Shares by Offeror pursuant to the Offer as a result of which
Parent, Offeror or any of their affiliates beneficially own (excluding Shares
held by the Company) at least a majority of the outstanding Shares, the Company
shall increase the size of its Board of Directors to seven members and Offeror
shall be entitled to designate members of the Board of Directors such that
Offeror, subject to compliance with Section 14(f) of the Exchange Act, will have
a number of representatives on the Board of Directors, rounded up to the next
whole number, equal to the product obtained by multiplying seven by the
percentage of Shares beneficially owned by Parent and any of its subsidiaries.
The Company has agreed, upon the request of Offeror, to promptly increase the
size of the Board of Directors to the extent permitted by the Certificate of
Incorporation of the Company and/or use its best efforts to secure the
resignations of such number of directors as is necessary to enable Offeror's
designees to be elected to the Board of Directors and has agreed to use its best
efforts to cause Offeror's designees to be so elected. Notwithstanding the
foregoing sentence: (i) in the event that Offeror's designees are appointed or
elected to the Company's Board of Directors, until the Effective Time, the
Company's Board of Directors shall have at least one director who is a director
on the date of the Merger Agreement and who is neither an officer of the Company
nor a stockholder, affiliate or associate (within the meaning of federal
securities laws) of Parent (any such directors, the 'Continuing Directors'), and
(ii) if no Continuing Directors remain, the other directors shall designate one
person to fill one of the vacancies, who shall not be either an officer of the
Company or a stockholder, affiliate or associate of Parent, and
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such person shall be deemed to be a Continuing Director. The Company has agreed,
at its expense and at the request of Offeror, to take all actions necessary to
effect any such election, including the mailing to its stockholders of the
information required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder, in form and substance reasonably satisfactory to Offeror
and its counsel (but Parent and Offeror will supply to the Company and be solely
responsible for any written information with respect to its nominees, officers,
directors and affiliates required by Section 14(f) and Rule 14f-1).
Parent currently intends to designate a majority of the directors of the
Company following consummation of the Offer. It is currently anticipated that
Parent will designate some or all of Messrs. Johnson, Kreindler, Loranger,
Redlinger, Taiclet and Wallman, or such other persons listed on Annex I as
Parent shall determine, to serve as directors of the Company following
consummation of the Offer.
Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to Parent and Offeror, including,
but not limited to, representations and warranties relating to the Company's
organization and qualification, the Company's subsidiaries, capitalization and
authority to enter into the Merger Agreement and carry out the transactions
contemplated thereby, required consents and approvals, Commission filings
(including financial statements), the absence of certain material adverse
changes or events since September 30, 1998, litigation, the material liabilities
of the Company and its subsidiaries, environmental matters relating to the
Company and its subsidiaries, employee benefit plans, labor matters, the
documents supplied by the Company relating to the Offer, trademarks, patents and
other intellectual property (including Year 2000 issues), the payment of taxes,
arrangements with financial advisors, the absence of product liability claims,
the absence of related party transactions, relationships with suppliers and
customers, and the absence of actions in violation of the Foreign Corrupt
Practices Act of 1977, as amended. The Company has also represented that it has
taken all action necessary to render Section 203 of the DGCL (see Section 16,
'Certain Regulatory and Legal Matters -- State Takeover Laws.') inapplicable to
the Offer, the Merger, the Merger Agreement and the Shareholders Agreement and
the transactions contemplated thereby.
Parent and Offeror have also made customary representations and warranties
to the Company, including, but not limited to, representations and warranties
relating to Parent and Offeror's organization and qualification, their authority
to enter into the Merger Agreement and the Shareholders Agreement and consummate
the transactions contemplated thereby, required consents and approvals,
documents related to the Offer, the availability of sufficient financing to
consummate the Offer, the absence of violations of certain margin rules, and the
absence of any prior activities by Offeror.
Conduct of Company's Business Pending Merger. Pursuant to the Merger
Agreement, the Company has agreed that, prior to the Effective Time, unless
Offeror shall otherwise have agreed in writing or as otherwise contemplated or
permitted by the Merger Agreement, the Company will do the following:
(i) conduct the business of the Company and its subsidiaries only in,
and maintain their facilities in, the ordinary course of business and
consistent with past practice;
(ii) use its commercially reasonable efforts to cause its current
insurance (or reinsurance) policies not to be canceled or terminated or any
of the coverage thereunder to lapse, unless simultaneously with such
termination, cancellation or lapse, replacement policies providing coverage
equal to or greater than the coverage under the canceled, terminated or
lapsed policies for substantially similar premiums are in full force and
effect;
(iii) use its commercially reasonable efforts, and cause its
subsidiaries to use commercially reasonable efforts, to preserve intact
their respective business organizations and goodwill, keep available the
services of their current officers and employees as a group and maintain
satisfactory relationships with suppliers, distributors, customers and
others having business relationships with them;
(iv) confer on a regular and frequent basis with representatives of
Offeror to report financial matters and, to the extent not prohibited by
applicable law, operational matters and the general status of ongoing
operations;
(v) notify Offeror of any emergency or other change in the normal
course of the Company's or any of its subsidiaries' business or in the
operation of the Company's or the subsidiaries' properties
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and of any governmental or third party complaints, investigations or
hearings (or communications indicating that the same may be contemplated)
if such emergency, change, complaint, investigation or hearing has or would
be reasonably likely to have, individually or in the aggregate, a material
adverse effect, individually or in the aggregate, on the business,
liabilities, revenues, operations, results of operations or financial
condition of the Company and its subsidiaries, taken as a whole (a 'Company
Material Adverse Effect') or would be material to any party's ability to
consummate the transaction contemplated by the Merger Agreement; and
(vi) postpone the holding of its Annual Meeting of Stockholders
indefinitely pending consummation of the Merger unless otherwise required
by the DGCL.
The Company has also agreed pursuant to the Merger Agreement that, prior to
the Effective Time, unless Offeror shall otherwise have agreed in writing or as
otherwise contemplated or permitted by the Merger Agreement, it will not
directly or indirectly do, or permit the occurrence of, any of the following:
(i) issue, sell, pledge, dispose of or encumber (or permit any of its
subsidiaries to issue, sell, pledge, dispose of or encumber) any shares of,
or any options, warrants, conversion privileges or rights of any kind to
acquire any shares of, any capital stock of the Company or any of its
subsidiaries (other than shares issuable upon exercise of the outstanding
(as of the date of the Merger Agreement) options to acquire Shares in
accordance with their terms in effect on the date of the Merger Agreement);
(ii) amend or propose to amend the Certificate or Articles of
Incorporation or By-laws of the Company or any of its subsidiaries;
(iii) split, combine or reclassify any outstanding Shares, or declare,
set aside or pay any dividend or other distribution payable in cash, stock,
property or otherwise with respect to the Shares (except the declaration
and payment of dividends by a wholly owned subsidiary of the Company to its
parent);
(iv) redeem, purchase or acquire or offer to acquire (or permit any of
its subsidiaries to redeem, purchase or acquire or offer to acquire) any
Shares or other securities of the Company or any of its subsidiaries other
than as contemplated by the Merger Agreement and other than for the
repurchase by the Company, pursuant to existing agreements, of any
outstanding Shares upon termination of any employment, director or
consulting relationship with the Company;
(v) enter into any material contract; or
(vi) enter into or modify any agreement, commitment or arrangement
with respect to any of the foregoing.
Pursuant to the Merger Agreement, the Company has agreed that, unless
Offeror shall otherwise have agreed in writing or as otherwise contemplated or
permitted by the Merger Agreement, the Company and its subsidiaries (including,
in the case of clause (viii), any 'Company ERISA Affiliate,' as defined in
Section 4.11 of the Merger Agreement) will not:
(i) sell, pledge, lease, dispose of or encumber any material assets
other than in the ordinary course of business consistent with past
practice;
(ii) acquire (by merger, consolidation, acquisition of stock or assets
or otherwise) any corporation, partnership or other business organization
or enterprise or material assets thereof;
(iii) incur any indebtedness for borrowed money or issue any debt
securities for borrowings except in the ordinary course of business and
consistent with past practice;
(iv) guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations of any
other person (other than a subsidiary of the Company or the Company) except
in the ordinary course of business consistent with past practice and in
amounts immaterial to the Company;
(v) enter into or modify any contract, agreement, commitment or
arrangement with respect to any of the foregoing;
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(vi) enter into or modify any employment, severance or similar
agreements or arrangements with, or grant any Options (or accelerate any
Options), bonuses, salary increases, severance or termination pay to, any
officers or directors;
(vii) in the case of employees who are not officers or directors, take
any action to grant or accelerate any Options, or take any other action
other than in the ordinary course of business consistent with past practice
(none of which actions shall be unreasonable or unusual) with respect to
the grant or creation of any bonuses, salary increases, severance or
termination pay, employment or similar agreements or with respect to any
increase of benefits in effect on the date of the Merger Agreement;
(viii) except as may be required by applicable law, adopt or amend any
bonus, profit sharing, compensation, stock option, pension, retirement,
deferred compensation, employment or other employee benefit plan,
agreement, trust fund or arrangement for the benefit or welfare of any
employee;
(ix) adopt a plan of liquidation, dissolution, merger, consolidation,
restructuring, recapitalization, or reorganization;
(x) make any material tax election or settle or compromise any
material federal, state, local, or foreign tax liability, except in the
ordinary course of business and consistent with past practice; or
(xi) take any action which would render, or which reasonably may be
expected to render, any representation or warranty made by the Company in
the Merger Agreement untrue in any respect at any time prior to the
Effective Time (or untrue in any material respect if such representation or
warranty is not qualified by 'material,' 'Company Material Adverse Effect,'
a specified dollar limitation or the like).
In addition, the Company has agreed that it will not, unless Offeror shall
otherwise have agreed in writing or as otherwise contemplated or permitted by
the Merger Agreement: (i) call any meeting (other than as contemplated by the
Merger Agreement) of its stockholders or waive or modify any provision of, or
terminate any, confidentiality or standstill agreement entered into by the
Company with any person or (ii) modify or accelerate the exercisability of any
Options outstanding on the date of the Merger Agreement.
Nonsolicitation Obligations and Exceptions. The Company has agreed in the
Merger Agreement to immediately cease and terminate any existing activities,
discussions or negotiations with any parties with respect to any acquisition of
or sale of any equity interest in or substantial assets of the Company or any of
its subsidiaries. Also, the Company has agreed (except as set forth below) that
it will not, directly or indirectly, solicit, encourage, participate in or
initiate discussions or negotiations with, or provide any information to, any
other person other than Offeror or its affiliates or representatives (a 'third
party') concerning any merger, consolidation, tender offer, exchange offer, sale
of all or substantially all of the Company's assets, sale of shares of capital
stock or similar business combination transaction involving the Company or any
principal operating or business unit of the Company or its subsidiaries (an
'Acquisition Proposal').
Notwithstanding the foregoing: (i) if, prior to Offeror owning a majority
of the outstanding Shares, the Company receives an unsolicited, written
indication of a willingness to make an Acquisition Proposal at a price per share
which the Company reasonably concludes is in excess of the Offer Price, and the
Company reasonably concludes in good faith, after consultation with its outside
financial advisor, that the person delivering such indication is capable of
consummating such an Acquisition Proposal, then the Company may provide access
to information concerning the Company's business, properties or assets to any
such person pursuant to an appropriate confidentiality agreement and the Company
may engage in discussions related thereto, and (ii) the Company may participate
in and engage in discussions and negotiations with any person meeting the
requirement set forth in clause (i) above in response to a written Acquisition
Proposal if the Company concludes in good faith, after consultation with its
outside financial advisor, upon advice of its legal counsel, that the failure to
engage in such discussions or negotiations is inconsistent with the fiduciary
duties of its Board of Directors to its stockholders under applicable laws, and
the Company receives from the person making an
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Acquisition Proposal an executed confidentiality agreement the terms of which
are (without regard to the terms of the Acquisition Proposal) (A) no less
favorable to the Company, and (B) no less restrictive to the person making the
Acquisition Proposal, than those contained in the Confidentiality Agreement.
Also, in the event that, after the Company has received a written
Acquisition Proposal (without breaching its obligations under clause (i) or (ii)
above) but prior to Offeror beneficially owning a majority of the outstanding
Shares, the Board of Directors concludes in good faith, after consultation with
its outside financial advisor, upon advice of its legal counsel, that it is
inconsistent with its fiduciary duties under applicable law not to:
(x) withdraw or modify the Board of Directors' recommendation of the Merger or
the Merger Agreement, (y) approve or recommend an Acquisition Proposal, subject
to the relevant provisions of the Merger Agreement, or (z) terminate the Merger
Agreement, the Company may do any or all of the foregoing but, if so, the
Company must pay the Termination Fee.
The Company has agreed promptly (but in any event within two days) to
advise Parent in writing of any Acquisition Proposal or any inquiry regarding
the making of an Acquisition Proposal including any request for information, the
material terms and conditions of such request, Acquisition Proposal or inquiry
and the identity of the person making such request, Acquisition Proposal or
inquiry and thereafter to keep Parent reasonably informed, on a current basis,
of the status and material terms of such proposals and the status of such
negotiations or discussions, providing copies to Parent of any Acquisition
Proposals made in writing. The Company has also agreed to provide Parent with
one business day advance notice of, in each and every case, its intention to
provide any information to, or enter into any confidentiality agreement with,
any person or entity making any such inquiry or proposal, and the Company has
agreed to provide Parent with three business days advance notice of, in each and
every case, its intention to enter into any other agreement with any person or
entity making any such inquiry or proposal.
Notwithstanding the provisions of the Confidentiality Agreement:
(i) following any notification to Parent of a written proposal that permits the
Company to negotiate with or furnish information to any third party in
accordance with the foregoing provisions, and until any transaction resulting
from such proposal shall have either been consummated or the Company shall have
received written notification that any such third party shall no longer seek to
engage in such transaction with or involving the Company, Parent shall be
entitled to propose or present to the Company any offer in response to such
third party's offer, and (ii) if, from the date of the Merger Agreement until
the Effective Time, any third party shall announce its intention to commence, or
shall commence, any tender offer to acquire Shares, Parent and Offeror shall be
entitled to make any public announcement or proposal, or to take any other
action it or they may deem appropriate, in response to such announcement or
tender offer and which is consistent with their obligations under the Merger
Agreement.
The Merger Agreement provides that it does not prohibit the Company and its
Board of Directors from taking and disclosing to the Company's stockholders a
position with respect to a tender or exchange offer by a third party pursuant to
Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or from making such
disclosure to the Company's stockholders or otherwise which, in the judgment of
the Board of Directors upon advice of legal counsel, is required under
applicable law or rules of any stock exchange.
The Company has agreed not to release any third party from, or waive any
provisions of, any confidentiality or standstill agreement to which the Company
is a party and to use its best efforts to enforce any such agreements at the
request of and on behalf of Parent. The Company also will promptly request each
person or entity which has executed, within 12 months prior to the date of the
Merger Agreement, a confidentiality agreement in connection with its
consideration of acquiring the Company to return or destroy all confidential
information furnished to such person or entity by or on behalf of the Company.
The provisions discussed in the preceding seven paragraphs are referred to
hereinbelow as the 'Nonsolicitation Provisions.'
Indemnification; Settlement of Stockholder Claims. The parties to the
Merger Agreement have agreed that, for a period of six years after Parent or
Offeror acquires a majority of the Shares, the Certificate of Incorporation of
the Surviving Corporation shall contain provisions no less favorable with
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respect to indemnification that are set forth in Articles VIII and IX of the
Certificate of Incorporation of the Company. Also, the Surviving Corporation
shall maintain in full force and effect, for a period of at least six years from
the Effective Time, directors' and officers' liability insurance comparable to
the Company's current policy but only to the extent obtainable at a cost of no
more than 100% greater than the cost of such policy (and, if not so obtainable,
the Surviving Corporation shall obtain what it believes in good faith
constitutes the best available insurance at such price level).
The Company has agreed not to settle or compromise any claim brought by any
present, former or purported holder of any securities of the Company in
connection with the Merger prior to the Effective Time without the prior written
consent of Offeror.
Existing Employment Agreements and Benefits. The Merger Agreement provides
that Parent will cause the Surviving Corporation to honor all employment,
consulting, termination and severance agreements in effect prior to the date of
the Merger Agreement between the Company or any of its subsidiaries and any
current or former officer, director, consultant or employee of the Company.
Also, the parties to the Merger Agreement have agreed to certain provisions to
provide for the continued coverage of the employees of the Company and its
subsidiaries under benefits plans.
Consents; Audit; Access to Information. In the Merger Agreement, the
Company has agreed to use its best efforts to obtain, without the payment of any
fee or compensation, certain consents to the Offer, the Merger, and the
transactions contemplated by the Merger Agreement. The Company has also agreed
to use reasonable commercial efforts to have Arthur Andersen LLP complete its
audit of the Company's consolidated financial statements for the fiscal year
ended September 30, 1999 as promptly as practicable, and to give Parent and
Offeror reasonable access to such audit work papers and audit staff, as well as
(subject to the provisions of the Confidentiality Agreement and to the extent
not prohibited by applicable law) to any other books, records and personnel of
the Company as may be reasonably requested.
Termination. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether prior to or after approval by the stockholders of
the Company:
(a) by mutual consent of the Boards of Directors of Parent and the
Company;
(b) by either Offeror or the Company if the Offer shall not have been
consummated on or before the Termination Date; provided, however, that a
party shall not be entitled to terminate the Merger Agreement pursuant to
such provision if such party is in material breach of its obligations under
the Merger Agreement; provided, further, that if the Offer shall not have
been consummated on or before the Termination Date solely as a result of
the failure of any waiting, review and investigation period (and any
extension thereof) applicable to the consummation of the Offer or the
Merger under the Hart-Scott-Rodino Act to expire or terminate or failure to
obtain required governmental consents, the Termination Date shall, in the
sole discretion of Offeror, be extended to a date that is up to 60 business
days from the date the Offer is commenced;
(c) By Offeror if the Board of Directors of the Company shall have
withdrawn or adversely modified (or, upon the written request of Offeror,
failed to reaffirm within three business days; provided that no such
additional request may be made during such three business day period) its
recommendations to the stockholders of the Company to approve the Offer and
the Merger;
(d) By Offeror if the Offer terminates or expires on account of the
occurrence of any of the Offer Conditions, without Offeror having purchased
any Shares thereunder;
(e) By the Company if (i) the Offer shall not have been commenced
substantially in accordance with the relevant provisions of the Merger
Agreement, or (ii) the Offer shall have expired or been terminated without
any Shares having been purchased thereunder, or (iii) a tender offer for
Shares is commenced by a person or entity, or the Company receives an
Acquisition Proposal, any of which the Board of Directors determines, in
the exercise of its fiduciary duties and subject to compliance with the
Nonsolicitation Provisions, makes necessary or advisable the termination of
the Merger Agreement; provided that the Nonsolicitation Provisions and the
provisions described below under 'Expenses; Termination Fee' (the 'Expense
Provisions') shall survive any such termination of the Merger Agreement; or
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(f) By Offeror if any action, suit or proceeding is commenced or
overtly threatened against Parent or Offeror or the Company, before any
court or governmental or regulatory authority or body, seeking to restrain,
enjoin, or otherwise prohibit the Offer, the Merger, or the completion of
any of the other transactions contemplated by the Merger Agreement;
provided that the Nonsolicitation Provisions and the Expense Provisions
shall survive any such termination of the Merger Agreement.
If the Merger Agreement is so terminated, Offeror shall terminate the
Offer, if still pending, without purchasing any Shares thereunder, and the
Merger Agreement will become void and there will be no liability or further
obligation on the part of Parent, Offeror or the Company or their respective
stockholders, officers or directors, except (i) as described under clauses (e)
and (f) above, under the Nonsolicitation Provisions, under the Expense
Provisions, and with respect to certain confidentiality obligations, and
(ii) to the extent that such termination results from the breach by a party of
any of its representations, warranties, covenants or agreements set forth in the
Merger Agreement; provided, however, that if Parent has received the Termination
Fee, Parent shall not assert or pursue in any manner, directly or indirectly,
any claim or cause of action against the Company or any of its officers or
directors based in whole or in part upon its or their receipt, consideration,
recommendation or approval of an Acquisition Proposal or the exercise of the
right of the Company to terminate the Merger Agreement under clause (e) above as
long as the Company complied in all material respects with the Nonsolicitation
Provisions.
Expenses; Termination Fee. The Merger Agreement provides that the Company
will pay Parent, upon demand, $5,500,000 (the 'Termination Fee'), to compensate
Parent and Offeror for taking actions to consummate the Merger Agreement, to
reimburse them for the time and expense relating thereto and for other direct
and indirect costs in connection with the transactions contemplated by the
Merger Agreement, upon the following events:
(i) the termination of the Merger Agreement by the Company pursuant to
the Nonsolicitation Provisions or pursuant to clause (e)(iii) above;
(ii) the termination of the Merger Agreement by Offeror pursuant to
clause (c) above;
(iii) the termination of the Offer by Offeror pursuant to clause (i)
of Section 15, 'Certain Conditions to Offeror's Obligations'; or
(iv) the termination of the Merger Agreement pursuant to its terms for
any reason other than a material breach by Parent or Offeror if within six
months thereafter either (x) a definitive agreement is entered into between
the Company and any third party for the acquisition or disposition of all
or substantially all of the assets of the Company, or securities of the
Company constituting (or convertible into) 35% or more of the Shares
outstanding on the date of the Merger Agreement, or for a merger,
consolidation or other reorganization of the Company, at a price equivalent
to a price per Share in excess of $9.50 and such transaction is closed
concurrently therewith or at any time thereafter, or (y) any person or
'group' (as that term is used in Section 13(d)(3) of the Exchange Act)
other than Offeror or any affiliate of Offeror acquires beneficial
ownership of 35% or more of the outstanding Shares.
Also, in the event that, after the Company has received a written
Acquisition Proposal (without breaching certain Nonsolicitation Provisions) but
prior to Offeror beneficially owning a majority of the outstanding Shares, the
Board of Directors concludes in good faith, after consultation with its outside
financial advisor, upon advice of its legal counsel, that it is inconsistent
with its fiduciary duties under applicable law not to: (x) withdraw or modify
the Board of Directors' recommendation of the Merger or the Merger Agreement,
(y) approve or recommend an Acquisition Proposal, subject to the relevant
provisions of the Merger Agreement, or (z) terminate the Merger Agreement, the
Company may do any or all of the foregoing but, if so, the Company must pay the
Termination Fee.
The Merger Agreement further provides that, in addition to any damages
caused by conduct that constitutes a breach under the Merger Agreement by
Parent, Offeror or the Company, the breaching parties, jointly and severally,
will pay to the nonbreaching parties all costs and expenses (including
attorneys' fees and expenses) it incurs in connection with its enforcement of
its rights under the Merger Agreement.
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Consent of Continuing Directors to Termination, Modification, Amendment or
Waiver. Notwithstanding anything in the Merger Agreement to the contrary, if
Offeror's designees are elected to the Company's Board of Directors, after the
acceptance for purchase of Shares pursuant to the Offer and prior to the
Effective Time, the affirmative vote of a majority of the Continuing Directors
will be required (i) to amend or terminate the Merger Agreement on behalf of the
Company, (ii) to amend the Company's Certificate of Incorporation or By-laws,
(iii) to exercise or waive any of the Company's rights or remedies under the
Merger Agreement, (iv) to extend the time for performance of Parent or Offeror's
obligations under the Merger Agreement, (v) to take any other action by the
Company in connection with the Merger Agreement required to be taken by the
Company's Board of Directors.
THE SHAREHOLDERS AGREEMENT
Agreement to Tender Shares. On October 31, 1999, Parent and Offeror entered
into the Tender and Option Agreement (the 'Shareholders Agreement') with P.
Quentin Bourjeaurd and Charles Balchunas, each of whom is an officer and
director of the Company (the 'Subject Stockholders'). The Shareholders Agreement
applies with respect to the Shares now beneficially owned by Messrs. Bourjeaurd
and Balchunas (1,459,447 Shares and 136,522 Shares, respectively), any Shares
either such person may acquire pursuant to the exercise of Options (1,534,022
Shares and 602,276 Shares, respectively), and any Shares of which either such
person may later acquire beneficial ownership by any means (collectively, the
'Subject Shares'). Each Subject Stockholder has agreed to tender and sell in the
Offer all of the then outstanding Subject Shares.
Voting. Each Subject Stockholder has generally agreed to cause its Subject
Shares to be present or absent at stockholders meetings as directed by Parent or
Offeror, and has appointed Parent and Offeror, or any nominee thereof, as his
attorney and proxy to vote the Subject Shares, in each case (i) in favor of the
Merger and the Merger Agreement and (ii) against any Acquisition Proposal (other
than the Merger), any actions which would result in a breach of the Merger
Agreement, or any actions which are intended or could be expected to adversely
affect the Offer and the related agreements.
Grant of Purchase Option. The Subject Stockholders have also granted to
Parent and Offeror an irrevocable option (the 'Purchase Option') to purchase for
cash at the Offer Price, any or all of the Subject Shares, including, without
limitation, by requiring the Subject Stockholder to exercise any or all Options
(to the extent exercisable and convertible, and other than Options with exercise
or conversion prices above the Offer Price) and tender the Shares acquired
pursuant to such exercise or conversion into the Offer or sell such Shares to
Parent or Offeror. At the request of the Subject Stockholder following receipt
of an exercise notice, Parent or Offeror shall advance to such Subject
Stockholder an amount in cash equal to the aggregate per Share exercise price of
the Options to be exercised pursuant to the exercise notice. The Purchase Option
may be exercised by Parent or Offeror, in whole or in part, at any time or from
time to time after the occurrence of any 'Trigger Event,' meaning any of the
following: (i) the Merger Agreement becomes terminable under circumstances that
entitle Parent or Offeror to receive the Termination Fee (regardless of whether
the Merger Agreement is actually terminated and whether such Fee is actually
paid) or (ii) the Offer is consummated but, due solely to the failure of the
Subject Stockholder to validly tender its Subject Shares, Parent has not
accepted for payment or paid for all of such Shares.
Conditions. The obligations of the Subject Stockholders to sell Subject
Shares under the Shareholders Agreement is subject to the following conditions:
(i) all applicable waiting periods, if any, under the Hart-Scott-Rodino Act have
expired or been terminated; (ii) all applicable consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, any court,
administrative agency or other governmental entity, if any, have been obtained
or made; and (iii) no preliminary or permanent injunction or other order by any
court of competent jurisdiction prohibiting or otherwise restraining such sale
or acquisition is in effect.
Restrictions on Transfer. Each Subject Stockholder has generally agreed not
to tender into any other tender or exchange offer or otherwise transfer or
encumber any interest in the Subject Shares, not to enter into any voting
arrangements with respect to the Subject Shares, and not to exercise any
appraisal rights with respect to the Subject Shares in connection with the
Merger. Each Subject Stockholder may, however, transfer Subject Shares to
certain affiliates, family members and family
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trusts, as well as organizations qualifying under Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, but in each case only if the
transferee agrees to be bound by the Shareholders Agreement.
No Solicitation. Other than to the extent permitted in the stockholder's
capacity as an officer or director of the Company as permitted in the Merger
Agreement or consistent with his fiduciary duties, each Subject Stockholder has
agreed not to initiate, solicit, encourage or otherwise facilitate any inquiries
or the making or submission of any Acquisition Proposal, and to promptly advise
Parent of any Acquisition Proposals.
Termination. The Shareholders Agreement will terminate with respect to a
Subject Stockholder upon the purchase of all his Subject Shares in the Offer.
Otherwise, the Shareholders Agreement will terminate upon the earliest of the
following: (i) the Effective Time; (ii) the termination of the Merger Agreement
in accordance with its terms other than upon, during the continuance of, or
after, a Trigger Event or an event which could lead to a Trigger Event (as
provided above under 'The Merger Agreement -- Expenses; Termination Fee'); or
(iii) 180 days following the earlier of (x) any termination of the Merger
Agreement upon, during the continuance of or after a Trigger Event or
(y) termination of the Merger Agreement under circumstances that could lead to a
Trigger Event (as provided above under 'The Merger Agreement -- Expenses;
Termination Fee') (or if, at the expiration of such 180 day period the Purchase
Option cannot be exercised by reason of any applicable judgment, decree, order,
injunction, law or regulation, five business days after such impediment to
exercise has been removed or has become final and not subject to appeal).
Representations and Warranties; Covenants. Under the Shareholders
Agreement, each of the Subject Stockholders has made customary representations
and warranties to Parent and Offeror, including with respect to (i) his
beneficial ownership of the Subject Shares free of undisclosed encumbrances,
(ii) the Subject Shares constituting all securities in the Company beneficially
owned by such Subject Stockholder, (iii) the Subject Stockholder not having
rights to acquire any other securities of the Company, (iv) the absence of
voting restrictions on the Subject Shares, (v) the Subject Stockholder's due
execution and delivery of the Shareholders Agreement, (vi) the legal, valid and
binding effect of the Shareholders Agreement, (vii) the absence of certain
violations, breaches, defaults, lien creations and other events arising by
virtue of the Shareholders Agreement under existing agreements, court orders,
laws and the like, (viii) the absence of any investment banker or other
intermediary requiring a fee, and (ix) the acknowledgment of Parent and
Offeror's reliance on such representations and warranties.
Each of Parent and Offeror has also made customary representations and
warranties under the Shareholders Agreement, including with respect to (i) its
authority to enter into and perform its obligations under the Shareholders
Agreement, (ii) its due execution and delivery of the Shareholders Agreement,
(iii) the legal, valid and binding effect of the Shareholders Agreement,
(iv) the transfer of the Subject Shares upon exercise of the Purchase Option
only in compliance with the Securities Act, and (v) the absence of certain
violations, breaches, defaults, lien creations and other events arising by
virtue of the Shareholders Agreement under existing agreements, court orders,
laws and the like.
All representations and warranties in the Shareholders Agreement will
survive for twelve months after the termination thereof.
THE AMENDMENT TO MR. BOURJEAURD'S EMPLOYMENT AGREEMENT
In connection with the Merger Agreement, on October 31, 1999 the Company
and P. Quentin Bourjeaurd executed an amendment (the 'Employment Agreement
Amendment') to Mr. Bourjeaurd's Executive Employment Agreement, dated
September 19, 1996 (the 'Employment Agreement'). Pursuant to the Employment
Agreement Amendment, upon the termination of Mr. Bourjeaurd's employment by the
Company other than for cause, he shall continue to receive salary and benefits
under his Employment Agreement until September 19, 2001. Also pursuant to the
Employment Agreement Amendment, the noncompetition covenant contained in
Mr. Bourjeaurd's Employment Agreement was extended under all circumstances
through September 19, 2001.
The foregoing is a summary of certain provisions of the Merger Agreement,
the Shareholders Agreement and the Employment Agreement Amendment, copies of
which have been filed as exhibits to the Schedule 14D-1 and which are available
in the same manner set forth with respect to the
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Company in Section 8, 'Certain Information Concerning the Company -- Available
Information.' Such summary is qualified in its entirety by reference to the text
of such agreements.
14. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that the Company will not, among other
things, (a) issue, sell, pledge, dispose of or encumber (or permit any of its
subsidiaries to issue, sell, pledge, dispose of or encumber) any shares of, or
any options, warrants, conversion privileges or rights of any kind to acquire
any shares of any capital stock of the Company or any of its subsidiaries (other
than shares issuable upon exercise of the outstanding (as of the date of the
Merger Agreement) options to acquire Shares in accordance with their terms in
effect on the date of the Merger Agreement); (b) split, combine or reclassify
any outstanding Shares, or declare, set aside or pay any dividend or other
distribution payable in cash, stock, property or otherwise with respect to the
Shares (except the declaration and payment of dividends by a wholly owned
subsidiary of the Company to its parents); or (c) redeem, purchase or acquire or
offer to acquire (or permit any of its subsidiaries to redeem, purchase or
acquire or offer to acquire) any Shares or other securities of the Company or
any of its subsidiaries other than as contemplated by the Merger Agreement and
other than for the repurchase by the Company, pursuant to existing agreements,
of any outstanding Shares upon termination of any employment, director or
consulting relationship with the Company. See Section 13, 'The Transaction
Documents -- Conduct of Company's Business Pending Merger.'
15. CERTAIN CONDITIONS TO OFFEROR'S OBLIGATIONS.
Offeror shall not be required to commence or continue the Offer or accept
for payment, purchase or pay for any Shares tendered, or may postpone the
acceptance, purchase or payment for Shares, or may amend (to the extent
permitted by the Merger Agreement) or terminate the Offer (1) if the Minimum
Condition is not satisfied as of the expiration of the Offer, (2) if any
applicable waiting, review and investigation periods under the Hart-Scott-Rodino
Act in respect of the Offer shall not have expired or been terminated prior to
the expiration of the Offer, or (3) if, at any time on or after October 31, 1999
and prior to the expiration date of the Offer (or, in respect of clause (viii)
below concerning required governmental consents, the latest date permitted in
accordance with Rule 14d-1(c) of the Exchange Act), any of the following events
shall have occurred (each of paragraphs (i) through (viii) providing a separate
and independent condition to Offeror's obligations pursuant to the Offer):
(i) the Company or any subsidiary of the Company, or their respective
Boards of Directors, shall have authorized, recommended or proposed, or
shall have announced an intention to authorize, recommend or propose, or
shall have entered into an agreement or agreement in principle 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 material change in its capitalization, or the Company's
Board of Directors shall have withdrawn or adversely modified (including by
amendment to its Schedule 14D-9), or upon request of Offeror, failed to
reaffirm its favorable recommendations with respect to the Offer and the
Merger as provided in the Merger Agreement, or any corporation, entity,
'group' or 'person' (as defined in the Exchange Act), other than Parent or
Offeror, shall have acquired beneficial ownership of 35% or more of the
outstanding Shares;
(ii) there shall have been any statute, rule, injunction or other
order promulgated, enacted, entered or enforced by any court or
governmental agency or other regulatory or administrative agency or
commission, domestic or foreign (other than the routine application to the
Offer, the Merger or other subsequent business combination of waiting,
review and investigation periods under the Hart-Scott-Rodino Act):
(a) making the purchase of some or all of the Shares pursuant to the Offer
or the Merger illegal, or resulting in a material delay in the ability of
Offeror to purchase some or all of the Shares, (b) invalidating or
rendering unenforceable any material provision of the Merger Agreement,
(c) imposing material limitations on the ability of Offeror effectively to
acquire or hold or to exercise full rights of ownership of the Shares
acquired by it, including but not limited to, the right to vote the Shares
purchased by it on all matters properly presented to the stockholders of
the Company, (d) imposing material limitations on the ability of any of
Parent, Offeror, or the Company to continue effectively all or any material
portion of its respective business as heretofore conducted or to continue
to own or operate effectively all or any
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material portion of its respective assets as heretofore owned or operated,
(e) imposing material limitations on the ability of Offeror to continue
effectively all or any material portion of the business of the Company and
its subsidiaries (taken as a whole) as previously conducted or to own or
operate effectively all or any material portion of the assets of the
Company and its subsidiaries (taken as a whole) as heretofore operated, or
(f) to the effect that the Offer or the Merger is violative of any
applicable law which would reasonably be expected to result in any of the
consequences described in subclauses (a) through (e) above;
(iii) there shall have been any law, statute, rule or regulation,
domestic or foreign, enacted or promulgated that, directly or indirectly,
results or may be anticipated to result in any of the consequences referred
to in clause (ii) above, or any action, suit or proceeding shall have been
commenced before any court or governmental or regulatory authority or body
seeking to restrain, enjoin or otherwise prohibit the Offer, the Merger, or
the completion of the transactions contemplated by the Merger Agreement;
(iv) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on any national securities
exchange or in the over the counter market in the United States for a
period of in excess of six and one-half trading hours in any period of 24
consecutive hours (excluding suspensions resulting solely from physical
damage or interference with such exchanges not related to market
conditions), (ii) the declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States, (iii) any limitation
by any governmental authority on, or any other event which might materially
adversely affect, the extension of credit by banks or other lending
institutions in the United States, or (iv) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof;
(v) except as set forth in certain filings made by the Company with
the Commission before October 31, 1999 or disclosed in schedules to the
Merger Agreement, any change shall have occurred or be threatened which
individually or in the aggregate has had or is continuing to have a Company
Material Adverse Effect;
(vi) (i) any of the representations and warranties of the Company in
the Merger Agreement shall not be true and correct in all respects as if
made on the date of any determination thereunder except for those
representations or warranties that address matters only as of a specified
date or only with respect to a specified period of time which need only be
true and accurate as of such date or with respect to such period; provided,
however, any representation or warranty not qualified by 'material,'
'Company Material Adverse Effect,' a specified dollar limitation or the
like need only be true and correct in all material respects on the date of
any determination hereunder, or (ii) the Company shall have breached in any
respect or shall not have performed in all respects each covenant and
complied with each agreement to be performed and complied with by it under
the Merger Agreement unless the Company gives prompt notice to Offeror of
such breach or nonperformance, such breach or nonperformance is capable of
being fully and completely cured at no more than an inconsequential cost or
expense to the Company or its subsidiaries and such breach or
nonperformance is so cured within three business days following such breach
or nonperformance;
(vii) the Company and Offeror shall have reached an agreement or
understanding regarding termination of the Offer or the Merger Agreement
shall have been terminated in accordance with its terms; or
(viii) all governmental consents (including consents of foreign
governmental entities) required to be obtained in connection with the
purchase of Shares pursuant to the Offer shall not have been obtained or
any governmental agency shall have announced an intention to seek to
prohibit or interfere with the purchase of Shares pursuant to the Offer;
which, in the good faith judgment of Offeror, in any such case, and regardless
of the circumstances giving rise to any such condition, make it inadvisable to
proceed with acceptance for payment or purchase of or payment for the Shares.
The foregoing conditions are for the sole benefit of Offeror and Parent and
may be asserted by Offeror and Parent regardless of the circumstances giving
rise to such conditions, or may be waived by
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Offeror in whole at any time or in part from time to time in their sole
discretion. The failure by Offeror or Parent at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right and may be asserted at any time and from
time to time.
16. CERTAIN REGULATORY AND LEGAL MATTERS.
Except as set forth in this Section 16, Offeror is not aware of any
approval or other action by any governmental or administrative agency which
would be required for the acquisition or ownership of Shares by Offeror as
contemplated herein. However, each of the Company, Offeror and Parent, together
with its advisors, is currently reviewing whether any approval or other action
will be required by any governmental or administrative agency of any foreign
country in connection with the Offer and the Merger. Should any such approval or
other action (whether foreign or domestic) be required, it will be sought, but
Offeror has no current intention to delay the purchase of Shares tendered
pursuant to the Offer pending the outcome of any such matter, subject, however,
to Offeror's right to decline to purchase Shares if any of the Offer Conditions
shall not have been satisfied. There can be no assurance that any such approval
or other action, if needed, would be obtained or would be obtained without
substantial conditions, or that adverse consequences might not result to the
Company's business or that certain parts of the Company's business might not
have to be disposed of if any such approvals were not obtained or other action
taken.
Antitrust. The Hart-Scott-Rodino Act provides that the acquisition of
Shares by Offeror may not be consummated unless certain information has been
furnished to the Division (the 'Division') and the Federal Trade Commission (the
'FTC') and certain waiting period requirements have been satisfied. The rules
promulgated by the FTC under the Hart-Scott-Rodino Act require the filing of a
Notification and Report Form (the 'Form') with the Division and the FTC and that
the acquisition of Shares under the Offer may not be consummated earlier than 15
days after receipt of the Form by the Division and the FTC. Within such 15 day
period the Division or the FTC may request additional information or documentary
material from Offeror. In the event of such request the acquisition of Shares
under the Offer may not be consummated until 10 days after receipt of such
additional information or documentary material by the Division or the FTC.
Offeror filed its Form with the Division and the FTC on November 5, 1999.
Offeror anticipates that the Company will file its Form with the Division and
the FTC shortly.
Federal Reserve Board Regulations. Federal Reserve Board Regulations T, U
and X (the 'Margin Regulations') promulgated by the Federal Reserve Board place
restrictions on the amount of credit that may be extended for the purpose of
purchasing margin stock (including the Shares) if such credit is secured
directly or indirectly by margin stock. Because no borrowings secured by margin
stock will be borrowed in order to finance the Offer, Parent and Offeror believe
that the Margin Regulations are not applicable to the Offer.
State Takeover Laws. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of the DGCL prevents an 'interested
stockholder' (generally a person who owns or has the right to acquire 15% or
more of a corporation's outstanding voting stock, or an affiliate or associate
thereof) from engaging in a 'business combination' (defined to include mergers
and certain other transactions) with a Delaware corporation for a period of
three years following the date such person became an interested stockholder
unless, among other things, prior to such date the board of directors of the
corporation approved either the business combination or the transaction in which
the interested stockholder became an interested stockholder. On October 31,
1999, prior to the execution of the Merger Agreement, the Board of Directors of
the Company, by unanimous vote of all directors present at a meeting held on
such date, (i) approved the Offer and the Merger, (ii) determined that the
Offer, the Merger Agreement and the Merger are fair to and advisable and in the
best interests of the Company and its stockholders and (iii) resolved to
recommend that the stockholders of the Company accept the Offer and tender their
Shares in the Offer and, if applicable, vote to approve and adopt the Merger
Agreement and the Merger. Accordingly, Section 203 is inapplicable to the Offer
and the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal
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executive offices or principal places of business, or whose business operations
otherwise have substantial economic effects, in such states. In Edgar v. MITE
Corp., the Supreme Court of the United States invalidated on constitutional
grounds the Illinois Business Takeover Statute, which, as a matter of state
securities law, made takeovers of corporations meeting certain requirements more
difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the
Supreme Court held that the State of Indiana may, as a matter of corporate law
and, in particular, with respect to those aspects of corporate law concerning
corporate governance, constitutionally disqualify a potential acquirer from
voting on the affairs of a target corporation without the prior approval of the
remaining stockholders. The state law before the Supreme Court was by its terms
applicable only to corporations that had a substantial number of stockholders in
the state and were incorporated there.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Offeror does not know whether any of these laws will, by their
terms, apply to the Offer or the Merger and has not complied with any such laws.
Should any person seek to apply any state takeover law, Offeror will take such
action as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that the takeover laws of any state are applicable to the Offer
or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Offeror might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Offeror might be unable to accept for
payment any Shares tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer and the Merger. In such case, Offeror may not be
obligated to accept for payment any Shares tendered. See Section 15, 'Certain
Conditions to Offeror's Obligations.'
17. FEES AND EXPENSES.
Neither Offeror nor Parent will pay any fees or commissions to any broker
or dealer or other person for soliciting tenders of Shares pursuant to the
Offer. Brokers, dealers, commercial banks and trust companies will, upon
request, be reimbursed by Offeror for customary mailing and handling expenses
incurred by them in forwarding material to their customers.
Offeror has retained Georgeson Shareholder Communications Inc. as
Information Agent and The Bank of New York as Depositary in connection with the
Offer. The Information Agent and the Depositary will receive reasonable and
customary compensation for their services hereunder and reimbursement for their
reasonable out-of-pocket expenses. The Depositary will also be indemnified by
Offeror against certain liabilities in connection with the Offer.
18. MISCELLANEOUS.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities or blue sky
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
shall be deemed to be made on behalf of Offeror by one or more registered
brokers or dealers which are licensed under the laws of such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of Offeror other than as contained in this Offer to
Purchase or in the Letter of Transmittal, and, if any such information or
representation is given or made, it should not be relied upon as having been
authorized by Offeror.
Offeror has filed with the Commission a statement on Schedule 14D-1,
pursuant to Section 14(d)(1) of the Exchange Act and Rule 14d-1 promulgated
thereunder, furnishing certain information with respect to the Offer. Such
statement and any amendments thereto, including exhibits, may be examined and
copies may be obtained at the same places and in the same manner as set forth
with respect to the Company in Section 8, 'Certain Information Concerning the
Company.'
ALLIEDSIGNAL ACQUISITION CORP.
November 5, 1999
36
<PAGE>
ANNEX I
DIRECTORS AND EXECUTIVE OFFICERS
OF PARENT AND OFFEROR
The names and ages of the directors and executive officers of Parent and
Offeror, and their present principal occupations, are set forth below. Each
individual is a citizen of the United States. Unless otherwise indicated, each
person's business address is 101 Columbia Road, Morris Township, New Jersey
07962.
PARENT
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT WITH PARENT; MATERIAL POSITIONS
NAME, AGE AND BUSINESS ADDRESS HELD DURING THE PAST FIVE YEARS
- ------------------------------ -------------------------------
<S> <C>
William J. Amelio, 41 President -- AlliedSignal Transportation and Power
Systems since August 1999. President, Turbocharging
Systems from April 1997 to July 1999. Vice President, Re-
Engineering and Information Systems of IBM Personal
Computer Company from 1996 to 1997. Vice President,
Operations, IBM Personal Computer Company from
1994 to 1995.
Hans W. Becherer, 64 ...................... Member of the Board of Directors of AlliedSignal Inc.
Deere & Company since 1991. Chairman and Chief Executive Officer of Deere
One John Deere Place & Company, a manufacturer of mobile power machinery and a
Moline, IL 61265-8098 supplier of financial services, since 1990. Director of
The Chase Manhattan Corporation and Schering-Plough
Corporation.
David E. Berges, 50 ....................... President -- AlliedSignal Consumer Products Group since
January 1998. President, Bendix/Jurid unit of Friction
Materials from November 1997 to December 1997. Vice
President and General Manager, Engine Systems and
Accessories unit of Aerospace Equipment Systems from July
1994 to October 1997.
Lawrence A. Bossidy, 64 ................... Member of the Board of Directors of AlliedSignal Inc.
since 1991. Chairman of the Board of AlliedSignal Inc.
since 1992 and Chief Executive Officer since 1991.
Director of Champion International Corporation, J.P.
Morgan & Co. Incorporated and Merck & Co., Inc.
Gary A. Cappeline, 50 ..................... President -- AlliedSignal Specialty Chemicals since
December 1998. Group Vice President, Pigments and
Additives, Engelhard Corporation, a chemical
manufacturer, from January 1997 to November 1998. Group
Vice President, Specialty Chemicals of Ashland Chemical
from January 1993 to December 1996.
Marshall N. Carter, 59 .................... Member of the Board of Directors of AlliedSignal Inc.
State Street Corporation since 1999. Chairman of the Board since 1993 and Chief
225 Franklin Street Executive Officer since 1992 of State Street Corporation
Boston, MA 02110-2804 and its principal subsidiary, State Street Bank and Trust
Company. State Street is a provider of services to
institutional investors worldwide.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT WITH PARENT; MATERIAL POSITIONS
NAME, AGE AND BUSINESS ADDRESS HELD DURING THE PAST FIVE YEARS
- ------------------------------ -------------------------------
<S> <C>
Karen K. Clegg, 50 ........................ President -- AlliedSignal Federal Manufacturing &
Technologies ('FM&T') since May 1995. Vice
President of FM&T from February 1995 to April 1995.
Vice President, Field Services and New Markets,
AlliedSignal Technical Services Corporation from
January 1994 to January 1995.
Ann M. Fudge, 48 .......................... Member of the Board of Directors of AlliedSignal
Maxwell House and Post Division Inc. since 1993. Executive Vice President of Kraft
Kraft Foods, Inc. Foods, Inc. since 1995. President of Kraft's
555 South Broadway Maxwell House and Post Division since 1997. Served
Tarrytown, NY 10591 as President of Kraft General Foods' Maxwell House
Coffee Company from 1994 to 1995 and General
Manager of the Maxwell House Coffee Division from
1995 to 1997. Kraft is the multinational food
business of Philip Morris Companies Inc. Director
of General Electric Company and Liz Claiborne, Inc.
Robert D. Johnson, 52 ..................... President and Chief Executive Officer of
AlliedSignal Aerospace since April 1999.
President -- Aerospace Marketing, Sales and Service
from January 1999 to March 1999.
President -- Electronic & Avionics Systems from
October 1997 to December 1998, and Vice President
and General Manager -- Aerospace Services from 1994
to 1997. Group Vice President, Manufacturing and
Services of AAR Corp. from 1993 to 1994.
Larry E. Kittelberger, 50 ................. Senior Vice President and Chief Information Officer
of AlliedSignal Inc. since February 1999. Vice
President and Chief Information Officer from August
1995 to January 1999. Corporate
Chairman -- Information Officer Leadership
Committee of Tenneco Inc., a diversified industrial
concern, from June 1989 to July 1995.
Peter M. Kreindler, 54 .................... Senior Vice President, General Counsel and
Secretary of AlliedSignal Inc. since December 1994.
Senior Vice President and General Counsel of
AlliedSignal Inc. from March 1992 to November 1994.
Steven R. Loranger, 47 .................... President -- AlliedSignal Engines and Systems since
April 1999. President -- Engines from July 1997 to
March 1999. President -- Truck Brake Systems from
February 1995 to June 1997. Vice President -- Air
Transport unit of Engines from May 1993 to January
1995.
Robert P. Luciano, 66 ..................... Member of the Board of Directors of AlliedSignal
Schering-Plough Corporation Inc. since 1989. Served as Chief Executive Officer
One Giralda Farms of Schering- Plough Corporation, a manufacturer and
Madison, NJ 07940 marketer of pharmaceuticals and consumer products,
from 1982 through 1995 and Chairman of the Board
from 1984 through 1998. Director of C.R. Bard,
Inc., Merrill Lynch & Co. and Schering-Plough
Corporation.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT WITH PARENT; MATERIAL POSITIONS
NAME, AGE AND BUSINESS ADDRESS HELD DURING THE PAST FIVE YEARS
- ------------------------------ -------------------------------
<S> <C>
Robert B. Palmer, 59 ...................... Member of the Board of Directors of AlliedSignal
Inc. since 1995. Served as President and Chief
Executive Officer of Digital Equipment Corporation,
a provider of networked computer systems, software
and services, from 1992 through mid-1998 and
Chairman of the Board from 1995 through mid-1998.
Russell E. Palmer, 65 ..................... Member of the Board of Directors of AlliedSignal
The Palmer Group Inc. since 1987. Chairman and Chief Executive
3600 Market Street Officer of The Palmer Group, a private investment
Philadelphia, PA 19104 firm, since 1990. Director of Federal Home Loan
Mortgage Corporation, GTE Corporation, The May
Department Stores Company and Safeguard
Scientifics, Inc.
Donald J. Redlinger, 54 ................... Senior Vice President -- Human Resources and
Communications of AlliedSignal Inc. since February
1995. Senior Vice President -- Human Resources of
AlliedSignal Inc. from January 1991 to January
1995.
Ivan G. Seidenberg, 52 .................... Member of the Board of Directors of AlliedSignal
Bell Atlantic Corporation Inc. since 1995. Chairman and Chief Executive
1095 Avenue of the Americas Officer of Bell Atlantic Corporation, a
New York, NY 10036 telecommunications and information services
provider, since 1999. Served as Vice Chairman,
President and Chief Executive Officer of Bell
Atlantic Corporation from June 1998 until 1999, and
Vice Chairman, President and Chief Operating
Officer of Bell Atlantic Corporation following the
merger of NYNEX Corporation and Bell Atlantic in
1997. Served as President and Chief Operating
Officer of NYNEX Corporation from 1994 until 1995
and Chairman and Chief Executive Officer from 1995
until 1997. Director of American Home Products
Corporation, Boston Properties, Inc., CVS
Corporation and Viacom, Inc.
Andrew C. Sigler, 68 ...................... Member of the Board of Directors of AlliedSignal
Champion International Corporation Inc. since 1994. Served as Chairman and Chief
One Champion Plaza Executive Officer of Champion International
Stamford, CT 06921 Corporation, a paper and forest products company,
from 1979 through 1996. Director of The Chase
Manhattan Corporation and General Electric Company.
Jeffrey I. Sinclair, 49 ................... President -- AlliedSignal Turbocharging Systems
since September 1999. President, Truck Brake
Systems from October 1997 to August 1999. Vice
President, Global Sales and Marketing, Friction
Materials from September 1996 to September 1997.
Principal of A.T. Kearney, a management consulting
company, from September 1995 to August 1996.
President of St. James Group, a marketing
consulting company, from March 1991 to August 1995.
</TABLE>
I-3
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT WITH PARENT; MATERIAL POSITIONS
NAME, AGE AND BUSINESS ADDRESS HELD DURING THE PAST FIVE YEARS
- ------------------------------ -------------------------------
<S> <C>
John R. Stafford, 62 ...................... Member of the Board of Directors of AlliedSignal
American Home Products Corporation Inc. since 1993. Chairman of the Board and Chief
Five Giralda Farms Executive Officer of American Home Products
Madison, NJ 07940-0874 Corporation, a manufacturer of pharmaceutical,
health care, animal health and agricultural
products, since 1986 and President from 1981
through 1990. Re-appointed as President in 1994.
Director of Bell Atlantic Corporation, The Chase
Manhattan Corporation and Deere & Company.
Lt. Gen. Thomas P. Stafford, 69 ........... Member of the Board of Directors of AlliedSignal
Stafford, Burke and Hecker, Inc. Inc. since 1981. Consultant for General Technical
1006 Cameron Street Services, Inc., a consulting firm, since 1984. Vice
Alexandria, VA 22314 Chairman and co- founder of Stafford, Burke and
Hecker, Inc., a Washington-based consulting firm.
Chairman of Omega Watch Corporation of America and
a Director of CMI Corporation, Cycomm International
Inc., Seagate Technology Inc., Timet Inc. and
Tremont Corporation.
Richard F. Wallman, 48 .................... Senior Vice President and Chief Financial Officer
of AlliedSignal Inc. since March 1995. Vice
President and Controller of International Business
Machines Corp. (IBM) from April 1994 to February
1995.
John H. Weber, 43 ......................... President -- AlliedSignal Friction Materials since
1999. President and Chief Operating Officer of KN
Energy Inc. from 1998 to 1999. President of Vickers
Inc., a unit of Aeroquip-Vickers, Inc., and
Executive Vice President of Aeroquip-Vickers from
1996 to 1998. Group Vice President, Vickers
Industrial Group, from 1994 to 1996.
David N. Weidman, 44 ...................... President -- AlliedSignal Polymers since March
1998. President, Fluorine Products unit of
Specialty Chemicals from May 1995 to February 1998.
Vice President and General Manager, Performance
Additives unit of Specialty Chemicals from May 1994
to April 1995. Vice President and General Manager
of American Cyanamid's Fibers business from 1990 to
1994.
Robert C. Winters, 67 ..................... Member of the Board of Directors of AlliedSignal
The Prudential Insurance Inc. since 1989. Served as Chairman and Chief
Company of America Executive Officer of The Prudential Insurance
751 Broad Street Company of America, a provider of insurance and
Newark, NJ 07102-3777 financial services, from 1987 through 1994 and has
served as Chairman Emeritus since 1994.
Henry T. Yang, 58 ......................... Member of the Board of Directors of AlliedSignal
University of California, Santa Barbara Inc. since 1996. Chancellor of the University of
5221 Cheadle Hall California, Santa Barbara since 1994.
Santa Barbara, CA 93106
</TABLE>
I-4
<PAGE>
OFFEROR
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR
EMPLOYMENT WITH OFFEROR; MATERIAL POSITIONS
NAME, AGE AND BUSINESS ADDRESS HELD DURING THE PAST FIVE YEARS
- ------------------------------ -------------------------------
<S> <C>
James V. Gelly, 39 ........................ Treasurer of AlliedSignal Acquisition Corp. Vice
President and Treasurer of AlliedSignal Inc. since
February 1999. Vice President -- Finance and Chief
Financial Officer of AlliedSignal Aerospace
Marketing Sales & Service from April 1998 to
February 1999. Vice President -- Investor Relations
of AlliedSignal Inc. from September 1996 to March
1998. Assistant Treasurer -- Investor Relations
from May 1994 to August 1996.
Peter M. Kreindler, 54 .................... Member of the Board of Directors and President of
AlliedSignal Acquisition Corp. (see above under
'Parent' for employment history).
Thomas F. Larkins, 38 ..................... Member of the Board of Directors and Assistant
Secretary of AlliedSignal Acquisition Corp. Vice
President and General Counsel -- Aerospace Services
and the Aerospace Market Segment Organizations of
AlliedSignal Inc. since April 1999. Vice President
and General Counsel -- AlliedSignal Aerospace
Marketing, Sales and Service from 1997 to
March 1999. Senior Vice President, General Counsel
and Secretary of L.A. Gear, Inc., a designer,
developer and marketer of athletic footwear, from
1994 to 1997, and Chief Administrative Officer from
1995 to 1997.
Victor P. Patrick, 41 ..................... Member of the Board of Directors and Vice President
and Secretary of AlliedSignal Acquisition Corp.
Deputy General Counsel, Corporate and Finance, of
AlliedSignal Inc. since April 1999. Vice President
and General Counsel of AlliedSignal Aerospace
Equipment Systems from November 1997 to April 1999.
Associate General Counsel, Corporate and Finance,
of AlliedSignal Inc. from January 1996 to October
1997. Assistant General Counsel, Corporate and
Finance, of AlliedSignal Inc. from November 1994 to
December 1995.
</TABLE>
I-5
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for Shares and
any other required documents should be sent or delivered by each stockholder of
the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary, at one of the addresses set forth below:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange Department (For Eligible Institutions Tender & Exchange Department
P.O. Box 11248 Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
For Confirmation Telephone:
(212) 815-6173
</TABLE>
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number listed below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and other tender offer
materials may be obtained from the Information Agent as set forth below and will
be furnished promptly at Offeror's expense. You may also contact your broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
[LOGO OF GEORGESON SHAREHOLDER COMMUNICATIONS INC.]
17 State Street
10th Floor
New York, New York 10004
Bankers and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
TRISTAR AEROSPACE CO.
PURSUANT TO THE OFFER TO PURCHASE
DATED NOVEMBER 5, 1999
BY
ALLIEDSIGNAL ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, DECEMBER 6, 1999, UNLESS EXTENDED.
- --------------------------------------------------------------------------------
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: Facsimile Copy Number By Hand or Overnight Courier:
Tender & Exchange Department (For Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 For Confirmation Telephone New York, New York 10286
(212) 815-6173
</TABLE>
------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU
MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED
BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by holders of Shares (as
defined below) of TriStar Aerospace Co. (the 'Stockholders') if certificates
evidencing Shares ('Certificates') are to be forwarded herewith or, unless an
Agent's Message (as defined in Section 2 of the Offer to Purchase) is utilized,
if delivery of Shares is to be made by book-entry transfer to an account
maintained by the Depositary at The Depository Trust Company (a 'Book-Entry
Transfer Facility') pursuant to the procedures set forth in Section 3 of the
Offer to Purchase.
Stockholders whose Certificates are not immediately available or who cannot
deliver their Certificates for, or a Book-Entry Confirmation (as defined in
Section 2 of the Offer to Purchase) with respect to, their Shares and all other
required documents to the Depositary prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase) must tender their Shares according to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.
See Instruction 2 hereof.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDERS(S) SHARES TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NUMBER
SHARE OF SHARES NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
- ------------------------------------------------------------------------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
----------------------------------------------------
TOTAL SHARES
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered.
See Instruction 4.
- --------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS CAREFULLY
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY, AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER).
Name of Tendering Institution: _________________________________________________
Account No.: ________________________________________________________________ at
[ ] The Depository Trust Company
Transaction Code No.: __________________________________________________________
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Shareholder(s): _______________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Window Ticket Number (if any): _____________________________________________
Name of Institution which Guaranteed Delivery: _____________________________
If delivery is by book-entry transfer:
Name of Tendering Institution: __________________________________________
Account No.: _________________________________________________________ at
[ ] The Depository Trust Company
Transaction Code Number: ________________________________________________
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to AlliedSignal Acquisition Corp., a
Delaware corporation ('Offeror'), and wholly owned subsidiary of AlliedSignal
Inc., a Delaware corporation ('Parent'), the above-described shares of Common
Stock, $0.01 par value per share (the 'Shares'), of TriStar Aerospace Co., a
Delaware corporation (the 'Company'), at a price of $9.50 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated November 5, 1999 (the 'Offer to Purchase'), receipt of
which is hereby acknowledged, and in this Letter of Transmittal (which together
constitute the 'Offer'). The Offer is being made in connection with the
Agreement and Plan of Merger, dated as of October 31, 1999, among Parent,
Offeror, and the Company (the 'Merger Agreement'). The undersigned understands
that Offeror reserves the right to transfer or assign, in whole or from time to
time in part, to any direct or indirect wholly owned subsidiary of Parent, the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve Offeror of its
obligations under the Offer or prejudice the rights of tendering holders of
the Shares ('Stockholders') to receive payment for Shares validly tendered and
accepted for payment pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of, or payment for,
Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms or conditions of any such extension or amendment), the undersigned hereby
sells, assigns and transfers to, or upon the order of, Offeror all right, title
and interest in and to all of the Shares that are being tendered hereby and any
and all other Shares or other securities issued or issuable in respect of such
Shares on or after the date of the Offer (a 'Distribution'), and constitutes and
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares (and any 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 evidencing such Shares
(and any Distributions), or transfer ownership of such Shares (and any
Distributions) on the account books maintained by a Book-Entry Transfer Facility
together, in any such case, with all accompanying evidences of transfer and
authenticity to, or upon the order of, Offeror, upon receipt by the Depositary,
as the undersigned's agent, of the purchase price with respect to such Shares,
(ii) present such Shares (and any Distributions) for transfer on the books of
the Company and (iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares (and any Distributions), all in accordance
with the terms and subject to the conditions of the Offer.
The undersigned hereby irrevocably appoints each designee of Offeror as the
attorney-in-fact and proxy of the undersigned, each with full power of
substitution, to the full extent of the undersigned's rights with respect to all
Shares tendered hereby and accepted for payment and paid for by Offeror (and any
Distributions), including, without limitation, the right to vote such Shares
(and any Distributions) in such manner as each such attorney and proxy or his
substitute shall, in his sole discretion, deem proper. All such powers of
attorney and proxies, being deemed to be irrevocable, shall be considered
coupled with an interest in the Shares tendered herewith. Such appointment will
be effective when, and only to the extent that, Offeror accepts such Shares for
payment. Upon such acceptance for payment, all prior powers of attorney and
proxies given by the undersigned with respect to such Shares (and any
Distributions) will be revoked, without further action, and no subsequent powers
of attorney and proxies may be given (and, if given, will be deemed
ineffective). The designees of Offeror will, with respect to the Shares (and any
Distributions) for which such appointment is effective, be empowered to exercise
all voting and other rights of the undersigned as they in their sole discretion
may deem proper. Offeror reserves the absolute right to require that, in order
for Shares to be deemed validly tendered, immediately upon the acceptance for
payment of such Shares, Offeror or its designees are able to exercise full
voting rights with respect to such Shares (and any Distributions).
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any Distributions) and that, when the same are accepted for
payment and paid for by Offeror, Offeror will acquire good, marketable and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances including irrevocable proxies, and that the Shares tendered
hereby (and any Distributions) will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or Offeror to be necessary or
3
<PAGE>
desirable to complete the sale, assignment and transfer of Shares tendered
hereby (and any Distributions). In addition, the undersigned shall promptly
remit and transfer to the Depositary, for the account of Offeror, all
Distributions issued to the undersigned on or after October 31, 1999, in respect
of the Shares tendered hereby, accompanied by appropriate documentation of
transfer; and pending such remittance and transfer or appropriate assurance
thereof, Offeror shall be entitled to all rights and privileges as owner of any
such Distributions and may withhold the entire purchase price or deduct from the
purchase price the amount of value thereof, as determined by Offeror in its sole
discretion.
The undersigned understands that Offeror's acceptance for payment of any
Shares tendered hereby will constitute a binding agreement between the
undersigned and Offeror with respect to such Shares 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, Offeror may not be required to accept for payment any of
the Shares tendered hereby or may accept for payment fewer than all of the
Shares tendered hereby.
Unless otherwise indicated herein under 'Special Payment Instructions,'
please issue the check for the purchase price and/or return any Certificates
evidencing Shares not tendered or not accepted for payment in the name(s) of the
registered holder(s) appearing under 'Description of Shares Tendered.'
Similarly, unless otherwise indicated under 'Special Delivery Instructions,'
please mail the check for the purchase price and/or return any Certificates
evidencing Shares not tendered or not accepted for payment (and accompanying
documents, as appropriate) to the address(es) of the registered holder(s)
appearing under 'Description of Shares Tendered.' In the event that both the
'Special Payment Instructions' and the 'Special Delivery Instructions' are
completed, please issue the check and/or return any such Certificates evidencing
Shares not tendered or not accepted for payment in the name(s) of, and deliver
such check and/or return such Certificates to, the person(s) so indicated.
Unless otherwise indicated herein under 'Special Payment Instructions,' in the
case of a book-entry delivery of Shares, please credit the account maintained at
the Book-Entry Transfer Facility indicated above with respect to any Shares not
accepted for payment. The undersigned recognizes that Offeror has no obligation
pursuant to the 'Special Payment Instructions' to transfer any Shares from the
name of the registered holder thereof if Offeror does not accept for payment any
of the Shares tendered hereby.
4
<PAGE>
- -----------------------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)
To be completed ONLY if Certificates not tendered or not accepted for
payment and/or the check for the purchase price of Shares accepted for
payment are to be issued in the name of someone other than the
undersigned, or if Shares delivered by book-entry transfer that are not
accepted for payment are to be returned by credit to an account maintained
at a Book-Entry Transfer Facility, other than to the account indicated
above.
Issue: [ ] Check [ ] Certificate(s) to:
Name: ____________________________________________________________________
(PLEASE PRINT)
Address: _________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
(ZIP CODE)
__________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9)
[ ] Credit Shares by book-entry transfer and not purchased to the account
set forth below
Name of Account Party: ___________________________________________________
Acct No.: ________________________________________________________________
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 7)
To be completed ONLY if Certificates not tendered or not accepted for
payment and/or the check for the purchase price of Shares accepted for
payment are to be sent to someone other than the undersigned or to the
undersigned at an address other than that shown above.
Mail check and/or Certificates to:
Name: ____________________________________________________________________
(PLEASE PRINT)
Address: _________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
(ZIP CODE)
__________________________________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9)
-----------------------------------------------------------------------------
5
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, signatures
on this Letter of Transmittal need not be guaranteed by a member firm of a
registered national securities exchange (registered under Section 6 of the
Securities Exchange Act of 1934, as amended (the 'Exchange Act')) or by a member
firm of the National Association of Securities Dealers, Inc., by a commercial
bank or trust company having an office or correspondent in the United States or
by any other 'Eligible Guarantor Institution' (bank, stockholder, savings and
loan association or credit union with membership approved signature guarantee
medallion program) as defined in Rule 17Ad-15 under the Exchange Act (each of
the foregoing constituting an 'Eligible Institution'), unless the Shares
tendered hereby are tendered (i) by the registered holder (which term, for
purposes of this document, shall include any participant in a Book-Entry
Transfer Facility whose name appears on a security position listing as the owner
of Shares) of such Shares who has completed either the box entitled 'Special
Payment Instructions' or the box entitled 'Special Delivery Instructions' herein
or (ii) as noted in the following sentence. If the Certificates are registered
in the name of a person or persons other than the signer of this Letter of
Transmittal, or if payment is to be made, or Certificates evidencing unpurchased
Shares are to be issued or returned, to a person other than the registered owner
or owners, then the tendered Certificates must be endorsed or accompanied by
duly executed stock powers, in either case signed exactly as the name or names
of the registered owner or owners appear on the Certificates, with the
signatures on the Certificates or stock powers guaranteed by an Eligible
Institution as provided herein. See Instruction 5.
2. Requirements of Tender. This Letter of Transmittal is to be completed by
Stockholders if Certificates evidencing Shares are to be forwarded herewith or,
unless an Agent's Message (as defined in the Offer to Purchase) is utilized, if
delivery of Shares is to be made pursuant to the procedures for book-entry
transfer set forth in Section 3 of the Offer to Purchase. For a Stockholder to
validly tender Shares pursuant to the Offer, either (a) a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof),
with any required signature guarantees and any other required documents, or an
Agent's Message in the case of a book-entry delivery, must be received by the
Depositary at one of its addresses set forth herein prior to the Expiration Date
and either (i) Certificates for tendered Shares must be received by the
Depositary at one of such addresses prior to the Expiration Date or (ii) Shares
must be delivered pursuant to the procedures for book-entry transfer set forth
in Section 3 of the Offer to Purchase and a Book-Entry Confirmation must be
received by the Depositary prior to the Expiration Date or (b) the tendering
Stockholder must comply with the guaranteed delivery procedures set forth below
and in Section 3 of the Offer to Purchase.
Stockholders whose Certificates are not immediately available or who cannot
deliver their Certificates and all other required documents to the Depositary or
complete the procedures for book-entry transfer prior to the Expiration Date may
tender their Shares by properly completing and duly executing a Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender
must be made by or through an Eligible Institution, (ii) a properly completed
and duly executed Notice of Guaranteed Delivery, substantially in the form made
available by Offeror, must be received by the Depositary prior to the Expiration
Date, and (iii) the Certificates representing all tendered Shares, in proper
form for transfer, or a Book-Entry Confirmation with respect to all tendered
Shares, together with a Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, with any required signature
guarantees and any other documents required by this Letter of Transmittal, must
be received by the Depositary within three NYSE trading days after the date of
such Notice of Guaranteed Delivery. If Certificates are forwarded separately to
the Depositary, a properly completed and duly executed Letter of Transmittal (or
a manually signed facsimile thereof) must accompany each such delivery.
THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ANY
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted. All
tendering Stockholders, by execution of this Letter of Transmittal (or a
facsimile thereof), waive any right to receive any notice of the acceptance of
their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
information required under 'Description of Shares Tendered' should be listed on
a separate signed schedule attached hereto.
6
<PAGE>
4. Partial Tenders. If less than all of the Shares represented by any
Certificates delivered to the Depositary herewith is to be tendered hereby, fill
in the number of Shares which are to be tendered in the box entitled 'Number of
Shares Tendered.' In such case, a new Certificate for the remainder of the
Shares that were evidenced by the old Certificate(s) will be sent, without
expense, to the person(s) signing this Letter of Transmittal, unless otherwise
provided in the box entitled 'Special Payment Instructions' or the box entitled
'Special Delivery Instructions' on this Letter of Transmittal, as soon as
practicable after the Expiration Date. All Shares represented by Certificate(s)
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. Signatures on Letter of Transmittal, Instruments of Transfer and
Endorsements. If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond
exactly with the name(s) as written on the face of the Certificate(s) without
alteration, enlargement or any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
Certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of Certificates. To
obtain additional Letters of Transmittal, you may either make a photocopy of
this Letter of Transmittal or call Georgeson Shareholder Communications Inc.,
the Information Agent, at (800) 223-2064.
If this Letter of Transmittal or any Certificates or instruments of
transfer are 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 Offeror of such person's authority to so act
must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of Certificates or
separate instruments of transfer are required unless payment is to be made, or
Certificates not tendered or not purchased are to be issued or returned, to a
person other than the registered holder(s).
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares evidenced by the Certificate(s) listed and
transmitted hereby, the Certificate(s) must be endorsed or accompanied by
appropriate instruments of transfer, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on the Certificate(s).
Signature(s) on such Certificate(s) and such endorsements or instruments of
transfer must be guaranteed by an Eligible Institution.
6. Transfer Taxes. Except as set forth in this Instruction 6, Offeror will
pay or cause to be paid any transfer taxes with respect to the transfer and sale
of purchased Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price is to be made to, or (in the circumstances
permitted hereby) if Certificates for Shares not tendered or not purchased are
to be registered in the name of, any person other than the registered holder(s),
or if tendered Certificates are registered in the name of any person other than
the person(s) signing this Letter of Transmittal, the amount of any transfer
taxes (whether imposed on the registered holder(s) or such person) payable on
account of the transfer to such person will be deducted from the purchase price
unless satisfactory evidence of the payment of such taxes or exemption therefrom
is submitted herewith.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATE(S) LISTED IN THIS LETTER OF
TRANSMITTAL.
7. Special Payment and Delivery Instructions. If a check and/or
Certificates for unpurchased Shares are to be issued in the name of a person
other than the signer of this Letter of Transmittal or if a check is to be sent
and/or such Certificates are to be returned to someone other than the signer of
this Letter of Transmittal or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed. If any
tendered Shares are not purchased for any reason and such Shares are delivered
by book-entry transfer to a Book-Entry Transfer Facility, such Shares will be
credited to an account maintained at the appropriate Book-Entry Transfer
Facility.
8. Requests for Assistance or Additional Copies. Questions and requests for
assistance may be directed to the Information Agent at its address or telephone
number set forth below and requests for additional copies of the Offer to
Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent or brokers, dealers, commercial banks and
trust companies and such materials will be furnished at Offeror's expense.
7
<PAGE>
9. Waiver of Conditions. The conditions of the Offer may be waived by
Offeror, in whole or in part, at any time or from time to time, at Offeror's
sole discretion, subject to the terms of the Offer and the Merger Agreement.
10. Backup Withholding Tax. Each tendering Stockholder is required to
provide the Depositary with a correct Taxpayer Identification Number ('TIN') on
Substitute Form W-9, which is provided under 'Important Tax Information' below.
FAILURE TO PROVIDE THE INFORMATION ON THE SUBSTITUTE FORM W-9 MAY SUBJECT THE
TENDERING STOCKHOLDER TO 31% FEDERAL INCOME TAX BACKUP WITHHOLDING ON THE
PAYMENT OF THE PURCHASE PRICE FOR THE SHARES. The tendering Stockholder should
indicate in the box in Part III of the Substitute Form W-9 if the tendering
Stockholder has not been issued a TIN and has applied for or intends to apply
for a TIN in the near future, in which case the tendering Stockholder should
complete the Certificate of Awaiting Taxpayer Identification Number provided
below. If the Stockholder has indicated in the box in Part III that a TIN has
been applied for and the Depositary is not provided a TIN within 60 days, the
Depositary will withhold 31% of all payments of the purchase price, if any, made
thereafter pursuant to the Offer until a TIN is provided to the Depositary.
11. Lost or Destroyed Certificates. If any Certificate(s) representing
Shares has been lost or destroyed, the holders should promptly notify the
Depositary. The holders will then be instructed as to the procedure to be
followed in order to replace the Certificate(s). This Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost or
destroyed Certificate(s) have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (TOGETHER WITH CERTIFICATES OR A
BOOK-ENTRY CONFIRMATION FOR SHARES AND ANY OTHER REQUIRED DOCUMENTS) MUST BE
RECEIVED BY THE DEPOSITARY, OR A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED
BY THE DEPOSITARY, PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a Stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
Stockholder's correct TIN on Substitute Form W-9 below. If such Stockholder is
an individual, the TIN is his social security number. If the tendering
Stockholder has not been issued a TIN and has applied for a number or intends to
apply for a number in the near future, such Stockholder should so indicate on
the Substitute Form W-9 and should complete the Certificate of Awaiting Taxpayer
Identification Number provided below. See Instruction 10. If the Depositary is
not provided with the correct TIN, the Stockholder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that are
made to such Stockholders with respect to Shares purchased pursuant to the Offer
may be subject to federal income tax backup withholding.
Certain Stockholders (including among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that Stockholder must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Forms for 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, the Depositary is required to withhold 31%
of any payments made to the Stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent federal income tax backup withholding with respect to payment of
the purchase price for Shares purchased pursuant to the Offer, a Stockholder
must provide the Depositary with his correct TIN by completing the Substitute
Form W-9 below, certifying that the TIN provided on Substitute Form W-9 is
correct (or that such Stockholder is awaiting a TIN) and that (1) such
Stockholder has not been notified by the Internal Revenue Service that he is
subject to backup withholding as a result of failure to report all interest or
dividends or (2) the Internal Revenue Service has notified the Stockholder that
he is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Stockholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report.
8
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
(COMPLETE SUBSTITUTE FORM W-9 BELOW)
________________________________________________________________________________
________________________________________________________________________________
SIGNATURE(S) OF OWNER(S)
Name(s) ________________________________________________________________________
________________________________________________________________________________
(PLEASE PRINT)
Capacity (Full Title) __________________________________________________________
Address ________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
________________________________________________________________________________
Area Code and Telephone Number _________________________________________________
Taxpayer Identification or Social Security Number ______________________________
(SEE SUBSITUTE FORM W-9)
Dated: ______________________________
(Must be signed by registered holder(s) exactly as name(s) appear(s) on stock
certificate(s) or on a security position listing or by the person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, please set forth full title and see
Instruction 5).
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
Authorized Signature(s) ________________________________________________________
Name ___________________________________________________________________________
________________________________________________________________________________
(PLEASE PRINT)
Name of Firm ___________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _________________________________________________
Dated: ______________________________
- --------------------------------------------------------------------------------
9
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PAYOR'S NAME: THE BANK OF NEW YORK
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PART I -- PLEASE PROVIDE YOUR TIN IN THE PART III --
BOX AT THE RIGHT AND CERTIFY BY SIGNING TIN: ____________________________________
SUBSTITUTE AND DATING BELOW Social Security Number
FORM W-9 or Employer Identification Number
--------------------------------------------------------------------------------------------------
DEPARTMENT OF THE PART II -- For Payees exempt from backup withholding, see the enclosed Guidelines for
TREASURY, INTERNAL Certification or Taxpayer Identification Number on Substitute Form W-9 and complete as
REVENUE SERVICE instructed therein
--------------------------------------------------------------------------------------------------
PAYER'S REQUEST FOR Certification -- Under penalties of perjury, I certify that:
TAXPAYER (1) The number shown on this form is my correct TIN (or I am waiting for a number to be issued
IDENTIFICATION to me); and
NUMBER ('TIN') (2) I am not subject to backup withholding because (a) I am exempt from backup withholding or
AND CERTIFICATION (b) I have not been notified by the Internal Revenue Service ('IRS') that I am subject to
backup withholding as a result of a failure to report all interest or dividends, or
(c) the IRS has notified me that I am no longer subject to backup withholding.
--------------------------------------------------------------------------------------------------
Signature: ________________________________________________ Date:____________________________
- -----------------------------------------------------------------------------------------------------------------------------------
</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 were no longer subject to backup
withholding, do not cross out item (2). (Also see the instructions in the
enclosed Guidelines.)
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING YOUR TIN.
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a TIN has not been issued to me,
and either (1) I have mailed or delivered an application to receive a TIN to the
appropriate IRS Center or Social Security Administration Officer or (2), I
intend to mail or deliver an application in the near future. I understand that
if I do not provide a TIN by the time of payment, 31% of all payments pursuant
to the Offer made to me thereafter will be withheld until I provide a number.
Signature: ________________________________ Date: ________________________
- --------------------------------------------------------------------------------
The Information Agent for the Offer is:
[Georgeson Logo]
17 State Street, 10th Floor
New York, NY 10004
Bankers and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064
10
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TRISTAR AEROSPACE CO.
AT
$9.50 NET PER SHARE
BY
ALLIEDSIGNAL ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, DECEMBER 6, 1999, UNLESS EXTENDED.
- --------------------------------------------------------------------------------
November 5, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by AlliedSignal Acquisition Corp., a Delaware
corporation ('Offeror') and direct wholly owned subsidiary of AlliedSignal Inc.
('Parent'), to act as Information Agent in connection with Offeror's offer to
purchase all outstanding shares of Common Stock, $0.01 par value per share
(collectively, the 'Shares'), of TriStar Aerospace Co., a Delaware corporation
(the 'Company'), at a purchase price of $9.50 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 November 5, 1999 (the 'Offer to
Purchase'), and in the related Letter of Transmittal (which together with any
amendments or supplements thereto, collectively constitute the 'Offer') enclosed
herewith. The Offer is being made in connection with the Agreement and Plan of
Merger, dated as of October 31, 1999, among Parent, Offeror and the Company (the
'Merger Agreement'). Holders of Shares whose certificates for such Shares are
not immediately available or who cannot deliver their certificates and all other
required documents to The Bank of New York (the 'Depositary') or complete the
procedures for book-entry transfer prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase) must tender their Shares according to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A MINIMUM NUMBER
OF SHARES WHICH, WHEN ADDED TO THE SHARES, IF ANY, BENEFICIALLY OWNED BY PARENT,
ITS AFFILIATES OR OFFEROR (EXCLUDING SHARES BENEFICIALLY OWNED BY OFFEROR BY
VIRTUE OF THE SHAREHOLDERS AGREEMENT (AS DEFINED IN SECTION 13 OF THE OFFER TO
PURCHASE)) WOULD CONSTITUTE AT LEAST A MAJORITY OF THE OUTSTANDING SHARES ON A
FULLY DILUTED BASIS ON THE DATE OF PURCHASE. THE OFFER IS ALSO SUBJECT TO
CERTAIN OTHER CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTIONS 1 AND
15 OF THE OFFER TO PURCHASE.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares registered in your name or in the name of
your nominee.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:
1. The Offer to Purchase, dated November 5, 1999.
2. The Letter of Transmittal to be used by holders of Shares in
accepting the Offer and tendering Shares. Facsimile copies of the Letter of
Transmittal (with manual signatures) may be used to tender Shares.
<PAGE>
3. A letter to stockholders of the Company from P. Quentin Bourjeaurd,
President and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company and mailed to the
stockholders of the Company.
4. The Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if neither of the two procedures for tendering Shares set forth
in the Offer to Purchase can be completed on a timely basis.
5. A printed form of letter which may be sent to your clients for
whose accounts you hold Shares registered in your name or in the name of
your nominee, with space provided for obtaining such clients' instructions
with regard to the Offer.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to the Depositary.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Offeror will accept for payment and will pay for all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 4 of the Offer to Purchase promptly after the later to
occur of (a) the Expiration Date and (b) the satisfaction or waiver of the
conditions set forth in Section 15 of the Offer to Purchase related to
regulatory matters. Subject to compliance with Rule 14e-1(c) under the Exchange
Act, Offeror expressly reserves the right to delay payment for Shares in order
to comply in whole or in part with any applicable law. See Sections 1 and 16 of
the Offer to Purchase. In all cases, payment for Shares tendered and accepted
for payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates for such Shares or timely confirmation of a book-
entry transfer of such Shares into the Depositary's account at The Depository
Trust Company, pursuant to the procedures set forth in Section 3 of the Offer to
Purchase, (ii) a properly completed and duly executed Letter of Transmittal (or
a manually signed facsimile thereof) with all required signature guarantees or,
in the case of a book-entry transfer, an Agent's Message (as defined in Section
2 of the Offer to Purchase) and (iiii) any other documents required by the
Letter of Transmittal.
Neither Offeror nor Parent will pay any fees or commissions to any broker,
dealer or any other person (other than the Information Agent and the Depositary
as described in Section 17 of the Offer to Purchase) in connection with the
solicitation of tenders of Shares pursuant to the Offer. Offeror will, however,
upon request, reimburse you for customary mailing and handling expenses incurred
by you in forwarding any of the enclosed materials to your clients.
Offeror will pay or cause to be paid any stock transfer taxes incident to
the transfer to it of validly tendered Shares, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, DECEMBER 6, 1999,
UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal (or a manually signed facsimile thereof) with
any required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message or other required documents should be sent to the Depositary and
(ii) certificates representing the tendered Shares or a timely Book-Entry
Confirmation (as defined in Section 2 of the Offer to Purchase) should be
delivered to the Depositary in accordance with the instructions set forth in the
Offer.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents or complete the
procedures for book-entry transfer prior to the Expiration Date, a tender must
be effected by following the guaranteed delivery procedures specified in Section
3 of the Offer to Purchase.
2
<PAGE>
Any inquiries you may have with respect to the Offer should be addressed to
Georgeson Shareholder Communications Inc., the Information Agent for the Offer,
at 17 State Street, 10th Floor, New York, New York 10004, (212) 440-9800.
Additional copies of the enclosed materials may be obtained by calling
Georgeson Shareholder Communications Inc., the Information Agent for the Offer
at (212) 440-9800 or from brokers, dealers, commercial banks or trust companies.
Very truly yours,
GEORGESON SHAREHOLDER COMMUNICATIONS INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF PARENT, OFFEROR, THE COMPANY, THE DEPOSITARY,
THE INFORMATION AGENT OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU
OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY
OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TRISTAR AEROSPACE CO.
AT
$9.50 NET PER SHARE
BY
ALLIEDSIGNAL ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, DECEMBER 6, 1999, UNLESS EXTENDED.
- --------------------------------------------------------------------------------
November 5, 1999
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated November
5, 1999 (the 'Offer to Purchase'), and the related Letter of Transmittal (which
together constitute the 'Offer') relating to the offer by AlliedSignal
Acquisition Corp., a Delaware corporation ('Offeror') and wholly owned
subsidiary of AlliedSignal Inc., a Delaware corporation ('Parent'), to purchase
all of the outstanding shares of Common Stock, $0.01 par value per share (the
'Shares'), of TriStar Aerospace Co., a Delaware corporation (the 'Company'), at
a price of $9.50 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer. The Offer is being made in
connection with the Agreement and Plan of Merger, dated as of October 31, 1999,
among Parent, Offeror, and the Company (the 'Merger Agreement'). Holders of
Shares whose certificates for such Shares (the 'Certificates') are not
immediately available or who cannot deliver their Certificates and all other
required documents to the Depositary or complete the procedures for book-entry
transfer prior to the Expiration Date (as defined in the Offer to Purchase) must
tender their Shares according to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR
YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES HELD BY US
FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish us to tender on
your behalf any or all of the Shares held by us for your account, pursuant to
the terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $9.50 per Share, net to the seller in cash.
2. The Offer is subject to a Minimum Condition (as defined in the
Offer to Purchase) and certain other conditions. See Sections 1 and 15 of
the Offer to Purchase.
3. The Offer is being made for all of the outstanding Shares.
4. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the
Letter of Transmittal, transfer taxes on the purchase of Shares by Offeror
pursuant to the Offer. However, federal income tax backup withholding at a
rate of 31% may be required, unless an exemption is provided or unless the
required taxpayer identification information is provided. See Instruction
10 of the Letter of Transmittal.
<PAGE>
5. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Monday, December 6, 1999, unless the Offer is extended.
6. The Board of Directors of the Company (the 'Board') has unanimously
approved the Offer and the Merger (as defined in the Offer to Purchase),
has determined that the Merger Agreement and the Offer are fair to and
advisable and in the best interests of the Company and its stockholders and
has resolved to recommend acceptance of the Offer to the Company's
stockholders, and that the stockholders tender their Shares in the Offer
and, if applicable, vote to approve and adopt the Merger Agreement and the
Merger.
7. Notwithstanding any other provision of the Offer, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made
only after timely receipt by the Depositary of (a) Certificates pursuant to
the procedures set forth in Section 3 of the Offer to Purchase, or a timely
Book-Entry Confirmation (as defined in Section 2 of the Offer to Purchase)
with respect to such Shares, (b) the Letter of Transmittal (or a manually
signed facsimile thereof), properly completed and duly executed, with any
required signature guarantees or, in the case of a book-entry transfer, an
Agent's Message (as defined in Section 2 of the Offer to Purchase) and (c)
any other documents required by the Letter of Transmittal. Accordingly,
payment may not be made to all tendering stockholders at the same time
depending upon when Certificates are actually received by the Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth below. If you authorize the tender of your
Shares, all such Shares will be tendered unless otherwise specified below. YOUR
INSTRUCTIONS TO US SHOULD BE FORWARDED PROMPTLY TO US IN AMPLE TIME TO PERMIT US
TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, Offeror may,
in its discretion, take such action as it may deem necessary to make the Offer
in any jurisdiction and extend the Offer to holders of shares in such
jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer will be deemed to
be made on behalf of Offeror by one or more registered brokers or dealers that
are licensed under the laws of such jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TRISTAR AEROSPACE CO.
BY
ALLIEDSIGNAL ACQUISITION CORP.
The undersigned acknowledge(s) receipt of your letter, the enclosed Offer
to Purchase of AlliedSignal Acquisition Corp., dated November 5, 1999, and the
related Letter of Transmittal (which together constitute the 'Offer') in
connection with the offer by AlliedSignal Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of AlliedSignal Inc., a Delaware
corporation, to purchase all outstanding shares of Common Stock (the 'Shares'),
of TriStar Aerospace Co., a Delaware corporation.
This will instruct you to tender to Offeror the number of Shares indicated
below (or if no number is indicated below, all Shares) which are held by you for
the account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
- -----------------------------------------------
Number of Shares to be Tendered:* __________
- -----------------------------------------------
<TABLE>
<S> <C>
SIGN HERE
Account Number: ________________________________ ______________________________________
Date: ________________________________, ________ ______________________________________
Signature(s)
______________________________________
______________________________________
(Print Name(s))
______________________________________
______________________________________
(Print Address(es))
______________________________________
(Area Code and Telephone Number(s))
______________________________________
(Taxpayer Identification or
Social Security Number(s))
</TABLE>
- ------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
3
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF SHARES OF COMMON STOCK
OF
TRISTAR AEROSPACE CO.
AT
$9.50 NET PER SHARE
BY
ALLIEDSIGNAL ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, DECEMBER 6, 1999, UNLESS EXTENDED.
- --------------------------------------------------------------------------------
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates representing
the Common Stock, $0.01 par value per share (the 'Shares') of TriStar Aerospace
Co., a Delaware corporation (the 'Company'), are not immediately available or
the procedures for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach The Bank of New York (the
'Depositary') prior to the Expiration Date (as defined in Section 1 of the Offer
to Purchase). This Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile transmission or United States mail, overnight mail or
courier to the Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE COPY NUMBER BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department (For Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
FOR CONFIRMATION TELEPHONE
(212) 815-6173
</TABLE>
------------------------
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO
A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an 'Eligible Institution' under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to AlliedSignal Acquisition Corp., a
Delaware corporation and wholly owned subsidiary of AlliedSignal Inc., a
Delaware corporation, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated November 5, 1999 (the 'Offer to Purchase'), and in
the related Letter of Transmittal (which together constitute the 'Offer'),
receipt of which is hereby acknowledged, the number of Shares indicated below
pursuant to the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares: ________________________________ Date: ____________________________________________
Certificate Numbers (if available): ______________ Name(s) of Record Holder(s): _____________________
__________________________________________________ __________________________________________________
__________________________________________________ __________________________________________________
(PLEASE TYPE OR PRINT)
If Share(s) will be tendered by book entry
transfer:
Names of Tendering Institutions: Address(es): _____________________________________
__________________________________________________ __________________________________________________
__________________________________________________ __________________________________________________
(ZIP CODE)
Account No.: __________________________________ at Area Code and Tel. No(s).: _______________________
[ ] The Depository Trust Company Signature(s): ____________________________________
__________________________________________________
</TABLE>
THE GUARANTEE SET FORTH BELOW MUST BE COMPLETED
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, an Eligible Institution (as defined in Section 3 of the
Offer to Purchase), hereby guarantees to deliver to the Depositary the
certificates representing Shares tendered hereby, in proper form for transfer,
or a Book-Entry Confirmation (as defined in Section 2 of the Offer to Purchase)
with respect to such Shares, in either case together with a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile
thereof), with any required signature guarantees, and any other documents
required by the Letter of Transmittal, all within three NYSE trading days after
the date hereof.
<TABLE>
<S> <C>
Name of Firm: ___________________________________ __________________________________________________
(AUTHORIZED SIGNATURE)
Address: ________________________________________ Name: ____________________________________________
(PLEASE TYPE OR PRINT)
_________________________________________________ Title: ___________________________________________
_________________________________________________ Date: ____________________________________________
(ZIP CODE)
Area Code and Tel. No.: _________________________
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES SHOULD BE SENT ONLY TOGETHER WITH YOUR
LETTER OF TRANSMITTAL.
2
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR. -- Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the payor.
<TABLE>
<CAPTION>
- -------------------------------------------------------- --------------------------------------------------------------
Give the Give the
For this type of account: SOCIAL For this type of account: EMPLOYER
SECURITY IDENTIFICATION
number of -- number of --
- -------------------------------------------------------- --------------------------------------------------------------
<S> <C> <C> <C>
1. An individual's account The individual 9. A valid trust, estate, or The legal entity (Do
pension trust not furnish the
2. Two or more individuals The actual owner of identifying number of
(joint account) the account or, if the personal
combined funds, the representative or
first individual on trustee unless the
the account(1) legal entity itself is
not designated in the
3. Husband and wife (joint The actual owner of account title.)(5)
account) the account or, if
joint funds, the first 10. Corporate account The corporation
individual on the
account(1) 11. Religious, charitable, or The organization
educational organization
4. Custodian account of a minor The minor(2) account
(Uniform Gift to Minors Act)
12. Partnership account held in The partnership
5. Adult and minor (joint The adult or, if the the name of the business
account) minor is the only
contributor, the 13. Association, club or other The organization
minor(1) tax-exempt organization
6. Account in the name of The ward, minor, or 14. A broker or registered The broker or nominee
guardian or committee for a incompetent person(3) nominee
designated ward, minor, or
incompetent person 15. Account with the Department The public entity
of Agriculture in the name
7. a. A revocable savings The grantor- of a public entity (such as
trust account (in which trustee(1) a state or local
grantor is also trustee) governmental school
district or prison) that
b. Any 'trust' account that The actual owner(4) receives agricultural
is not a legal or valid program payments
trust under State law
8. Sole proprietorship account The owner(4)
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Card or Form SS-4,
Application for Employer Identification Number (for businesses and all other
entities), or Form W-7 for Individual Taxpayer Identification Number (for alien
individuals required to file U.S. tax returns) at an office of the Social
Security Administration or the Internal Revenue Service.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
A corporation.
A financial institution.
An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under Section 403(b)(7).
The United States or any agency or instrumentality thereof.
A State, the District of Columbia, a possession of the United States, or any
political subdivision or instrumentality thereof.
A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
An international organization or any agency or instrumentality thereof.
A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
A real estate investment trust.
A common trust fund operated by a bank under section 584(a).
An entity registered at all times during the tax year under the Investment
Company Act of 1940.
A foreign central bank of issue.
PAYMENTS NOT GENERALLY SUBJECT TO BACKUP WITHHOLDING
Payment of dividends and patronage dividends not generally subject to backup
withholding include the following:
Payments to nonresident aliens subject to withholding under section 1441.
Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
Payments of patronage dividends where the amount received is not paid in
money.
Payments made by certain foreign organizations.
Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
Payments described in section 6049(b)(5) to non-resident aliens.
Payments on tax-free covenant bonds under section 1451.
Payments made by certain foreign organizations.
Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE A SUBSTITUTE FORM W-9 TO AVOID
POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER, FURNISH
YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE 'EXEMPT' ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends and patronage dividends that are
not subject to information reporting are also not subject to backup withholding.
For details, see the regulations under sections 6041, 604lA(a), 6045 and 6050A.
PRIVACY ACT NOTICE -- Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. Payers must be
given the numbers whether or not recipients are required to file tax returns.
Payers must generally withhold 31% of taxable interest, dividend, and certain
other payments to a payee who does not furnish a taxpayer identification number
to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDER. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SHARES. THE OFFER IS MADE SOLELY BY THE OFFER TO PURCHASE, DATED
NOVEMBER 5, 1999, AND THE RELATED LETTER OF TRANSMITTAL AND IS NOT BEING MADE
TO, AND TENDERS WILL NOT BE ACCEPTED FROM, OR ON BEHALF OF, HOLDERS OF SHARES 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. IF THE SECURITIES
LAWS OF ANY JURISDICTION REQUIRE THE OFFER TO BE MADE BY A LICENSED BROKER OR
DEALER, THE OFFER SHALL BE DEEMED TO BE MADE ON BEHALF OF ALLIEDSIGNAL
ACQUISITION CORP. BY ONE OR MORE REGISTERED BROKERS OR DEALERS LICENSED UNDER
THE LAWS OF SUCH JURISDICTION.
NOTICE OF OFFER TO PURCHASE
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
TRISTAR AEROSPACE CO.
AT
$9.50 NET PER SHARE IN CASH
BY
ALLIEDSIGNAL ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ALLIEDSIGNAL INC.
AlliedSignal Acquisition Corp., a Delaware corporation ("Offeror") and
wholly owned subsidiary of AlliedSignal Inc., a Delaware corporation ("Parent"),
is offering to purchase all outstanding shares of Common Stock, par value $0.01
per share (the "Shares"), of TriStar Aerospace Co., a Delaware corporation (the
"Company"), at a purchase price of $9.50 per share (such amount, or any greater
amount per Share paid pursuant to the Offer, being hereinafter referred to as
the "Offer Price"), net to the seller in cash, without interest thereon, less
any required withholding taxes, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated November 5, 1999, and the related Letter
of Transmittal (which together constitute the "Offer"). See the Offer to
Purchase for capitalized terms used but not defined herein.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, DECEMBER 6, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn prior to the Expiration Date (as defined below) a
minimum number of Shares which, when added to the Shares, if any, beneficially
owned by Parent, its affiliates or Offeror (excluding Shares beneficially owned
by Offeror by virtue of the Shareholders Agreement (as defined in Section 13 of
the Offer to Purchase)) would constitute at least a majority of the outstanding
Shares on a fully diluted basis on the date of purchase (the "Minimum
Condition") and (ii) the expiration or termination of any applicable waiting
periods imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"). See Sections 1 and 15 of the Offer to Purchase.
The Offer is not conditioned on obtaining financing.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated
as of October 31, 1999 (the "Merger Agreement"), by and among Parent, Offeror
and the Company. The Merger Agreement provides, among other things, for the
commencement of the Offer by Offeror and further provides that, after the
purchase of Shares pursuant to the Offer and subject to the satisfaction or
waiver of certain conditions set forth therein, Offeror will be merged with and
into the Company (the "Merger"), with the Company surviving the Merger as a
wholly owned subsidiary of Parent. Pursuant to the Merger, each outstanding
Share (other than (i) Shares owned by Parent, Offeror or any subsidiaries
thereof or Shares held in the Company's treasury and (ii) Shares held by holders
who have properly exercised their appraisal rights under the Delaware General
Corporation Law) immediately prior to the Effective Time (as defined in the
Merger Agreement) will be converted into the right to receive the Offer Price,
in cash, without interest thereon, less any required withholding of taxes, upon
the surrender of certificates formerly representing such Shares.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND
THE MERGER, HAS DETERMINED THAT THE MERGER AGREEMENT AND THE OFFER ARE FAIR TO
AND ADVISABLE AND IN THE BEST INTERESTS OF THE COMPANY AND THE HOLDERS OF SHARES
(THE "STOCKHOLDERS"), AND HAS RESOLVED TO RECOMMEND ACCEPTANCE OF THE OFFER TO
THE STOCKHOLDERS, AND THAT THE STOCKHOLDERS TENDER THEIR SHARES IN THE OFFER
AND, IF APPLICABLE, VOTE TO APPROVE AND ADOPT THE MERGER AGREEMENT AND THE
MERGER.
<PAGE>
For purposes of the Offer, Offeror will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered to Offeror and not
withdrawn on or prior to the Expiration Date if, as and when Offeror gives oral
or written notice to The Bank of New York (the "Depositary") of Offeror's
acceptance for payment of such Shares. Upon the terms and subject to the
conditions of the Offer, payment for Shares accepted for payment pursuant to the
Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering Stockholders for the purpose
of receiving payment from Offeror and transmitting payments to tendering
Stockholders. Upon the deposit of funds with the Depositary for the purpose of
making payments to tendering Stockholders, Offeror's obligation to make such
payment will be satisfied, and tendering Stockholders must thereafter look
solely to the Depositary for payments of amounts owed to them by reason of the
acceptance for payment of Shares pursuant to the Offer.
The term "Expiration Date" means 12:00 midnight, New York City time, on
Monday, December 6, 1999 (the "Scheduled Expiration Date"), unless and until
Offeror, in accordance with the terms of the Offer and the Merger Agreement,
extends the period of time during which the Offer is open, in which event the
term "Expiration Date" means the latest time and date at which the Offer, as so
extended, expires. In the Merger Agreement, Offeror has agreed that if all of
the conditions to the Offer are not satisfied by the Scheduled Expiration Date
then, provided that all such conditions are and continue to be reasonably
probable of being satisfied by the date which is 35 business days after the
commencement of the Offer, Offeror shall extend the Offer for one or more
periods of not more than five (5) business days each if requested to do so by
the Company; provided that Offeror shall not be required to extend the Offer
beyond the date that is 35 business days from the date the Offer is commenced
or, if earlier, the date of termination of the Merger Agreement in accordance
with its terms. Otherwise, Offeror has agreed in the Merger Agreement that it
will not, without the prior written consent of the Company, extend the period
during which the Offer is open if all the Offer conditions have been satisfied,
except that Offeror may, without the consent of the Company, extend the Offer as
follows: (A) if on the Scheduled Expiration Date any of the Offer conditions
shall not have been satisfied or waived, for one (1) or more periods but in no
event past 45 business days from the date the Offer is commenced (unless the
waiting, review and investigation periods under the HSR Act have not terminated
or expired or required governmental consents have not been obtained in which
case not past 60 business days from the date the Offer is commenced) (the
"Termination Date"); (B) for such period as may be required by any rule,
regulation, interpretation or position of the Securities Exchange Commission or
the staff thereof applicable to the Offer; or (C) for one (1) or more periods
(each such period to be for not more than three (3) business days and such
extensions to be for an aggregate period of not more than five (5) business days
beyond the latest expiration date that would otherwise be permitted under clause
(A) or (B) of this sentence) if on such expiration date there shall not have
been tendered that number of Shares which would equal more than 90% of the
issued and outstanding Shares. Offeror's rights to extend the Offer pursuant to
the foregoing clauses (B) and (C) are subject to the Company's right to
terminate the Merger Agreement if the Offer shall not have been consummated by
the Termination Date. Subject to the foregoing restrictions, Offeror reserves
the right (but will not be obligated), in its sole discretion, to extend the
period during which the Offer is open by giving oral or written notice of such
extension to the Depositary and by making a public announcement of such
extension. There can be no assurance that Offeror will exercise its right to
extend the Offer.
If the Minimum Condition, or any of the other conditions set forth in
Section 15 of the Offer to Purchase, has not been satisfied by 12:00 midnight,
New York City time, on December 6, 1999 (or any other time then set as the
Expiration Date), Offeror may elect to (1) subject to the qualifications above
with respect to the extension of the Offer, extend the Offer and, subject to
applicable withdrawal rights, retain all tendered Shares until the expiration of
the Offer, as extended, subject to the terms of the Offer, (2) subject to
complying with applicable rules and regulations of the Commission and the terms
of the Merger Agreement (including obtaining, if required, the prior written
consent of the Company), accept for payment all Shares so tendered and not
extend the Offer or (3) subject to the terms of the Merger Agreement, terminate
the Offer and not accept for payment any Shares and return all tendered Shares
to tendering Stockholders.
Offeror will not, without the prior written consent of the Company, (i)
decrease the amount or change the form of consideration payable in the Offer,
(ii) decrease the number of Shares sought in the Offer, (iii) impose additional
conditions to the Offer, (iv) change any condition to the Offer or amend any
other term of the Offer if any such change or amendment would be adverse in any
respect to the holders of Shares (other than Parent or Offeror), or (v) amend or
waive the Minimum Condition.
Except as set forth above, and subject to the applicable rules and
regulations of the Commission, Offeror expressly reserves the right, in its sole
discretion, to amend the Offer in any respect. Any extension of the period
during which the Offer is open, or delay in acceptance for payment or payment,
or termination or amendment of the Offer, will be followed, as promptly as
practicable, by public announcement thereof, such announcement in the case of an
extension to be issued not later than 9:00 a.m. New York City time, on the next
business day after the previously scheduled Expiration Date in accordance with
the public announcement requirements of Rule 14d-4(c) under the Exchange Act.
The reservation by Offeror of the right to delay acceptance for payment of, or
payment for,
2
<PAGE>
Shares is subject to the provisions of Rule 14e-l(c) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), which requires that
Offeror pay consideration offered or return the Shares deposited by or on behalf
of Stockholders promptly after the termination or withdrawal of the Offer.
Offeror shall not have any obligation to pay interest on the purchase price for
tendered Shares, whether or not Offeror exercises its right to extend the Offer.
Tenders of Shares made pursuant to the Offer are irrevocable, except as
otherwise provided in Section 4 of the Offer to Purchase. Shares tendered
pursuant to the Offer may be withdrawn pursuant to the procedures set forth in
Section 4 of the Offer to Purchase at any time prior to the Expiration Date and,
unless theretofore accepted for payment and paid for by Offeror pursuant to the
Offer, may also be withdrawn at any time after January 3, 2000. For a withdrawal
to be effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses set
forth on the back cover of the Offer to Purchase. Any such notice of withdrawal
must specify the name of the persons who tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder, if
different from that of the person who tendered such Shares. If certificates
evidencing Shares to be withdrawn have been delivered or otherwise identified to
the Depositary, then, prior to the physical release of such certificates, the
tendering Stockholder must also submit to the Depositary the serial numbers
shown on the particular certificates evidencing the Shares to be withdrawn, and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (as defined below), except in the case of Shares tendered for the
account of an Eligible Institution. If Shares have been tendered pursuant to the
procedure for book-entry transfer set forth in Section 3 of the Offer to
Purchase, the notice of withdrawal must also specify the name and number of the
account at The Depository Trust Company to be credited with the withdrawn Shares
and otherwise comply with The Depository Trust Company's procedures. An Eligible
Institution is a member firm of a registered national securities exchange
(registered under Section 6 of the Exchange Act), a member of the National
Association of Securities Dealers, Inc. or a commercial bank or trust company
having an office or correspondent in the United States or any other "Eligible
Guarantor Institution," as defined in Rule 17Ad-15 under the Exchange Act.
THE INFORMATION REQUIRED TO BE DISCLOSED BY RULE 14D-6(e)(1)(VII) OF THE
GENERAL RULES AND REGULATIONS UNDER THE EXCHANGE ACT IS CONTAINED IN THE OFFER
TO PURCHASE AND IS INCORPORATED HEREIN BY REFERENCE.
The Company has provided Offeror with its stockholder list and security
position listings for the purpose of disseminating the Offer to Stockholders.
The Offer to Purchase, the related Letter of Transmittal and other relevant
materials will be mailed to record holders of Shares and will be furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the Company's Stockholder list,
or, if applicable, who are listed as participants in a clearing agency's
security position listing for subsequent transmittal to beneficial owners of
Shares.
STOCKHOLDERS ARE URGED TO READ THE OFFER TO PURCHASE AND THE RELATED LETTER
OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR SHARES PURSUANT
TO THE OFFER.
Questions and requests for assistance or for copies of the Offer to
Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery or other
related materials may be directed to the Information Agent at its address and
telephone number set forth below, and copies will be furnished promptly at
Offeror's expense. Holders of Shares may also contact brokers, dealers,
commercial bankers and trust companies for additional copies of the Offer to
Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery or other
related materials.
The Information Agent for the Offer is:
Georgeson Shareholder
Communications Inc.
17 State Street, 10th Floor
New York, New York 10004
Bankers and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
November 5, 1999
3
<PAGE>
ALLIEDSIGNAL TO ACQUIRE TRISTAR AEROSPACE CO.
MORRIS TOWNSHIP, N.J. & DALLAS--(BUSINESS WIRE)--Nov. 1, 1999--
Acquisition To Support Company's Expansion Of Aerospace Consumable
Hardware And Services Offerings; Will Create $600 Million Global
Aerospace Consumable Hardware Business
AlliedSignal Inc. (NYSE: ALD) and TriStar Aerospace Co. (NYSE: TSX) announced
today that they have entered into a definitive merger agreement under which
AlliedSignal will acquire TriStar for $9.50 per share in cash.
Under the merger agreement, AlliedSignal will commence, by Friday, November 5,
1999, a tender offer to acquire all of the outstanding shares of TriStar. The
transaction will total approximately $291 million, which includes the assumption
of approximately $107 million of TriStar debt.
The acquisition is part of AlliedSignal's ongoing strategy to grow its offerings
in the aerospace consumable hardware and aftermarket services areas. It builds
upon the company's 1998 acquisition of the aerospace parts distribution business
of Banner Aerospace Inc. and forms a $600 million global aerospace consumable
hardware business.
TriStar has annual sales of approximately $200 million. The company is a leading
provider of fasteners, fastening systems and related hardware to the aerospace
industry. It also provides just-in-time and automatic parts replenishment and
other customized inventory management services designed to reduce overall
customer costs.
"We will integrate TriStar with our Hardware Product Group," said James D.
Taiclet, President, AlliedSignal Aerospace Services. "The result will be a
single business capable of providing worldwide customers with one-stop shopping
for a wide range of consumable parts and value-added services that can help make
them more competitive. We'll be able to get more customers more parts as soon as
they're needed, and do so in ways that will enable our customers to operate with
greater efficiency and at lower costs."
Quentin Bourjeaurd, TriStar's Chairman and CEO, said, "TriStar and AlliedSignal
Hardware Product Group have complementary businesses and this combination will
allow us to achieve our mutual goals at a much quicker pace. Our respective
shareowners, employees, customers and suppliers will benefit as a result of this
merger."
TriStar executive officers beneficially owning approximately 20% of TriStar's
shares have committed to support the transaction and have entered into
tendering, voting and
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<PAGE>
option agreements. The acquisition is subject to clearance under the
Hart-Scott-Rodino Antitrust Improvements Act and the acquisition of a majority
of TriStar shares by AlliedSignal, as well as other customary conditions. The
two companies expect to complete the acquisition in December 1999.
This news release does not constitute an offer to purchase any securities, nor
solicitation of a proxy, consent or authorization for or with respect to a
meeting of the shareowners of AlliedSignal Inc. or TriStar Aerospace Co. or any
action in lieu of a meeting. Any solicitations will be made only pursuant to
separate materials in compliance with the requirements of applicable federal and
state securities laws.
TriStar is headquartered in Dallas, Texas, and employs approximately 500 people
and has facilities in North America and Europe.
AlliedSignal Aerospace, a US$7.5-billion unit of AlliedSignal Inc., is the
largest supplier of aircraft engines, equipment, systems and services for
commercial transport, regional, general aviation and military aircraft.
AlliedSignal Inc. is an advanced technology and manufacturing company serving
customers worldwide with aerospace products and services, automotive products,
plastics, chemicals, fibers and advanced materials. It is one of the 30 stocks
that make up the Dow Jones Industrial Average and is also a component of the
Standard & Poor's 500 Index. The company employs 70,400 people in some 40
countries. Additional information on the company is available on the World Wide
Web at http://www.allliedsignal.com.
This release contains forward-looking statements as defined in Section 21E of
the Securities Exchange Act of 1934, including statements about future business
operations, financial performance and market conditions. Such forward-looking
statements involve risks and uncertainties inherent in business forecasts.
CONTACT: Tom Crane John Clendening AlliedSignal Inc. AlliedSignal Aerospace
(973) 455-4732 (310) 512-1656.
<PAGE>
Contact: Tom Crane
(973) 455-4732
ALLIEDSIGNAL COMMENCES TENDER OFFER FOR TRISTAR AEROSPACE CO.
AT $9.50 PER SHARE
MORRIS TOWNSHIP, New Jersey, November 5, 1999 -- AlliedSignal Inc.
[NYSE: ALD] said today that it has commenced its previously announced tender
offer of $9.50 per share for shares of common stock of TriStar Aerospace Co.
[NYSE: TSX], Dallas, Texas.
The tender offer, which is being made pursuant to an Agreement and Plan
of Merger dated as of Sunday, October 31, 1999, is scheduled to expire at 12:00
midnight, New York City time, on Monday, December 6, 1999, unless extended.
Following the consummation of the tender offer, AlliedSignal intends to complete
a merger to acquire all of the remaining shares of TriStar common stock that are
not tendered in the offer.
The Board of Directors of TriStar has unanimously approved the tender
offer and the Agreement and Plan of Merger. The Board also has unanimously
determined that the terms of the tender offer and merger agreement are fair to
and in the best interests of TriStar's shareowners, and unanimously recommends
that shareowners accept the offer and tender their shares pursuant to the offer.
<PAGE>
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2
TriStar executive officers beneficially owning approximately 20% of
TriStar's shares have committed to support the transaction and have entered into
tendering, voting and option agreements. The acquisition is subject to clearance
under the Hart-Scott-Rodino Antitrust Improvements Act and the acquisition of a
majority of TriStar shares by AlliedSignal, as well as other customary
conditions. The two companies expect to complete the acquisition in December
1999.
The Bank of New York will act as depository for the tender offer and
Georgeson Shareholder Communications Inc. will act as information agent.
This news release does not constitute an offer to purchase any
securities, nor solicitation of a proxy, consent or authorization for or with
respect to a meeting of the shareowners of AlliedSignal Inc. or TriStar
Aerospace Co. or any action in lieu of a meeting. Any solicitations will be made
only pursuant to separate materials in compliance with the requirements of
applicable federal and state securities laws.
TriStar is a leading provider of fasteners, fastening systems and
related hardware to the aerospace industry. It also provides just-in-time and
automatic parts replenishment and other customized inventory management
services.
AlliedSignal Aerospace, a US$7.5-billion unit of AlliedSignal Inc., is
the largest supplier of aircraft engines, equipment, systems and services for
commercial transport, regional, general aviation and military aircraft.
AlliedSignal Inc. is an advanced technology and manufacturing company
serving customers worldwide with aerospace products and services, automotive
products, plastics,
<PAGE>
3
chemicals, fibers and advanced materials. It is one of the 30 stocks that make
up the Dow Jones Industrial Average and is also a component of the Standard &
Poor's 500 Index. The company employs 70,400 people in some 40 countries.
Additional information on the company is available on the World Wide Web at
http://www.alliedsignal.com.
- ------------------------------------------------------------------------------
This release contains forward-looking statements as defined in Section
21E of the Securities Exchange Act of 1934, including statements
about future business operations, financial performance and market conditions.
Such forward-looking statements involve risks and uncertainties inherent
in business forecasts.
- ------------------------------------------------------------------------------
# # #
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of October 31, 1999 (the
"Agreement"), by and among AlliedSignal Inc., a Delaware corporation (the
"Purchaser"), AlliedSignal Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Purchaser (the "Merger Sub"), and TriStar Aerospace
Co., a Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of the Purchaser, the Merger Sub and the
Company have each determined that it is advisable and in the best interests of
their respective stockholders for the Purchaser to acquire the Company on the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance thereof, it is proposed that the Merger Sub shall
make a cash tender offer to acquire all of the issued and outstanding shares of
common stock, par value $.01 per share, of the Company (the "Company Common
Stock"), for $9.50 per share of Company Common Stock (all issued and outstanding
shares of Company Common Stock, being hereinafter referred to as the "Shares"),
net to the seller in cash, in accordance with the terms and subject to the
conditions provided for herein and in the offering documents relating to the
Offer (as defined below);
WHEREAS, the Board of Directors of each of the Purchaser, the Merger Sub
and the Company have resolved to approve and adopt this Agreement and the Merger
(as defined below) following the Offer pursuant to which the Merger Sub shall
merge with and into the Company and each Share (other than Shares held by the
Purchaser or the Merger Sub or any subsidiary of the Purchaser or the Merger
Sub) shall be converted into the right to receive the Merger Consideration (as
defined below) upon the terms and subject to the conditions set forth herein;
and
WHEREAS, the Board of Directors of the Company has unanimously (i)
determined that each of the Offer and the Merger (as defined below) is
advisable, fair to and in the best interests of the Company and its stockholders
and (ii) resolved to recommend acceptance of the Offer and approval and adoption
by the stockholders of the Company of this Agreement and the Merger on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
Purchaser, the Merger Sub and the Company hereby agree as follows:
<PAGE>
<PAGE>
ARTICLE 1
THE OFFER
1.1 The Offer.
(a) Provided that none of the conditions set forth in Annex I to this
Agreement shall have occurred, the Merger Sub shall, not later than one business
day after execution of this Agreement, publicly announce the transactions
contemplated hereby, and not later than five business days after execution of
this Agreement, commence (within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), an offer to purchase all
Shares at a price of $9.50 per Share, net to the seller in cash (the "Offer,"
which term shall include any amendments to such Offer not prohibited by this
Agreement) and, subject to a minimum number of Shares which, when added to the
Shares, if any, beneficially owned by the Purchaser, its affiliates or the
Merger Sub (excluding Shares beneficially owned by the Purchaser by virtue of
the Shareholders Agreement (as defined below)) would constitute at least a
majority of the outstanding Shares (on a fully-diluted basis) being validly
tendered and not withdrawn prior to the expiration of the Offer (the "Minimum
Condition") and the conditions set forth in Annex I of this Agreement, shall use
its best efforts to consummate the Offer. The Offer shall be made by means of an
offer to purchase containing the Minimum Condition and the conditions set forth
in Annex I and no other conditions. Simultaneously with the commencement of the
Offer, the Merger Sub shall file with the Securities and Exchange Commission
(the "Commission") a Tender Offer Statement on Schedule 14D-1 with respect to
the Offer (together with all amendments and supplements thereto, the "Schedule
14D-1"). The Schedule 14D-1 will include, as exhibits, the offer to purchase and
a form of letter of transmittal (collectively, together with any amendments and
supplements thereto, the "Offer Documents"). The Company and its counsel shall
be given a reasonable opportunity to review and make comments with respect to
the Schedule 14D-1 and the Offer Documents and all amendments and supplements
thereto prior to their filing with the Commission or dissemination to
stockholders of the Company.
(b) The Merger Sub shall, and the Purchaser shall cause the Merger Sub
to, accept for payment and as promptly as practicable pay for any Shares validly
tendered on or prior to the expiration of the Offer and not withdrawn, subject
to the satisfaction or waiver of the conditions set forth in Annex I hereto (the
"Offer Conditions"). The Purchaser shall make available to the Merger Sub on a
timely basis the funds necessary to accept for payment, and pay for, any Shares
properly tendered pursuant to the Offer.
(c) The Merger Sub will not, without the prior written consent of the
Company (i) decrease the amount or change the form of consideration payable in
the Offer, (ii) decrease the number of Shares sought in the Offer, (iii) impose
additional conditions to the Offer, (iv) change any Offer Condition or amend any
other term of the Offer if any such change or amendment would be adverse in any
respect to the holders of Shares (other than the Purchaser or the Merger Sub),
(v) except as provided below, extend the Offer if all of the Offer Conditions
have been satisfied or (vi) amend or waive the Minimum Condition. Subject to the
terms and
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<PAGE>
conditions hereof, the Offer shall expire at midnight, New York City time, on
the date that is twenty (20) business days after the Offer is commenced (within
the meaning of Rule 14d-2 under the Exchange Act) (the "Scheduled Expiration
Date"); provided however, that without the consent of the the Company, the
Merger Sub may (x) extend the Offer, if on the Scheduled Expiration Date of the
Offer any of the Offer Conditions shall not have been satisfied or waived, for
one (1) or more periods but in no event past 45 business days from the date the
Offer is commenced unless the waiting, review and investigation periods
applicable to the transactions contemplated by this Agreement under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"Hart-Scott-Rodino Act") have not terminated or expired or the consents referred
to in paragraph (h) of Annex I have not been obtained in which case not past the
date set forth in Section 8.1(b), (y) extend the Offer for such period as may be
required by any rule, regulation, interpretation or position of the Commission
or the staff thereof applicable to the Offer or (z) extend the Offer for one (1)
or more periods (each such period to be for not more than three (3) business
days and such extensions to be for an aggregate period of not more than five (5)
business days beyond the latest expiration date that would otherwise be
permitted under clause (x) or (y) of this sentence) if on such expiration date
there shall not have been tendered that number of Shares which would equal more
than ninety percent of the issued and outstanding Shares. The Merger Sub agrees
that if all of the Offer Conditions are not satisfied on the Scheduled
Expiration Date, then, provided that all such conditions are and continue to be
reasonably probable of being satisfied by the date that is 35 business days from
the date the Offer is commenced, the Merger Sub shall extend the Offer for one
or more periods of not more than five (5) business days each if requested to do
so by the Company; provided that the Merger Sub shall not be required to extend
the Offer beyond the date that is 35 business days from the date the Offer is
commenced or, if earlier, the date of termination of this Agreement in
accordance with the terms hereof.
1.2 Company Action.
(a) The Company hereby consents to the Offer and represents that its
Board of Directors has unanimously (i) approved the Offer and the Merger, has
determined that this Agreement and the Offer are fair to and advisable and in
the best interest of the Company and its stockholders and has resolved to
recommend acceptance of the Offer to the Company's stockholders, and that the
stockholders tender their Shares in the Offer and, if applicable, vote to
approve and adopt this Agreement and the Merger; provided, however, that such
recommendation may be withdrawn or modified to the extent permitted in this
Agreement, and (ii) taken all action necessary to render Section 203 of the
Delaware Law (as defined below) inapplicable to the Offer, the Merger, this
Agreement and the Tender and Option Agreement, dated as of the date hereof,
among the Purchaser, the Merger Sub and each of the persons listed on Schedule A
thereto (the "Shareholders Agreement") or any of the transactions contemplated
hereby or thereby. The Company hereby consents to the inclusion in the Offer
Documents of the recommendation of the Board of Directors described in the first
sentence of this Section 1.2. The Company represents that it has received the
opinion of Goldman, Sachs & Co., dated as of the date hereof, to the effect that
the $9.50 per Share in cash to be received by the holders of Shares (other than
the Purchaser or any subsidiary thereof) in the Offer and the Merger is fair
from a financial point of view to such holders.
3
<PAGE>
<PAGE>
(b) Simultaneously with, or as promptly as possible after, the
commencement of the Offer, the Company shall file with the Commission and mail
to the holders of Shares a Solicitation/Recommendation Statement on Schedule
14D-9 (together with all amendments and supplements thereto, the "Schedule
14D-9"), which shall reflect the recommendation of the Board of Directors
referred in clause (a)(i) of Section 1.2; provided that prior to the filing of
such Schedule 14D-9, the Company shall have provided the Merger Sub's counsel
with a reasonable opportunity to review and make comments with respect to such
Schedule 14D-9. Such recommendation shall not be withdrawn or adversely modified
except by resolution of the Board of Directors adopted in the exercise of
applicable fiduciary duties upon the advice of outside legal counsel and in
accordance with this Agreement.
(c) Each of the Purchaser and the Merger Sub will take all steps
necessary to ensure that the Offer Documents, and the Company will take all
steps necessary to ensure that the Schedule 14D-9, to be filed with the
Commission and to be disseminated to holders of the Shares, comply with, and are
filed in each case as and to the extent required by, applicable Federal and
state securities laws. The Company agrees to provide the Merger Sub and its
counsel with copies of any written comments that the Company or its counsel may
receive from the Commission or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments, and each of the Purchaser and the
Merger Sub agrees to provide the Company and its counsel with copies of any
written comments that the Purchaser, the Merger Sub or their counsel may receive
from the Commission or its staff with respect to the Offer Documents promptly
after the receipt of such comments.
(d) The Company shall promptly furnish the Merger Sub with mailing
labels containing the names and addresses of the record holders and, if
available, of non-objecting beneficial owners of Shares and lists of securities
positions of Shares held in stock depositories, each as of the most recent
practicable date, and shall from time to time furnish the Merger Sub with such
additional information, including updated or additional lists of the
stockholders, mailing labels and lists of securities positions, and other
assistance as the Merger Sub may reasonably request in order to be able to
communicate the Offer to the stockholders of the Company. Subject to the
requirements of law, and except for such steps as are necessary to disseminate
the Offer Documents and any other documents necessary to consummate the Merger,
the Purchaser and the Merger Sub and each of their affiliates shall use such
lists, labels and additional information only in connection with the Offer and
Merger and treat all information in such labels, lists and additional
information as "Confidential Material" in accordance with the Confidentiality
Agreement, dated April 5, 1999, and amended on October 7, 1999, between the
Purchaser and the Company (the "Confidentiality Agreement").
1.3 Directors. Promptly upon the payment for any Shares by the Merger Sub
pursuant to the Offer as a result of which the Purchaser, the Merger Sub and any
of their affiliates beneficially own (excluding Shares held by the Company) at
least a majority of the outstanding Shares and from time to time thereafter, the
Company shall increase the size of its Board of Directors to seven (7) members
and the Merger Sub shall be entitled to designate members of the Company's Board
of Directors such that the Merger Sub, subject to compliance with Section
4
<PAGE>
<PAGE>
14(f) of the Exchange Act, will have a number of representatives on the Board of
Directors, rounded up to the next whole number, equal to the product obtained by
multiplying seven (7) by the percentage of Shares beneficially owned by the
Purchaser and any of its subsidiaries. The Company shall, upon request by the
Merger Sub, promptly increase the size of the Board of Directors to the extent
permitted by its Certificate of Incorporation and/or use its best efforts to
secure the resignations of such number of directors as is necessary to enable
the Merger Sub's designees to be elected to the Board of Directors and shall use
its best efforts to cause the Merger Sub's designees to be so elected; provided,
however, that, in the event that the Merger Sub's designees are appointed or
elected to the Company's Board of Directors, until the Effective Time (as
defined below) the Company's Board of Directors shall have at least one director
who is a director on the date hereof and who is neither an officer of the
Company nor a stockholder, affiliate or associate (within the meaning of the
Federal securities laws) of the Purchaser (one or more of such directors, the
"Continuing Directors"); provided, further, that if no Continuing Directors
remain, the other directors shall designate one person to fill one of the
vacancies who shall not be either an officer of the Company or a stockholder,
affiliate or associate of the Purchaser, and such Person shall be deemed to be a
Continuing Director for the purposes of this Agreement. At the request of the
Merger Sub, the Company shall take, at its expense, all action necessary to
effect any such election, including the mailing to its stockholders of the
information required by Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder, in form and substance reasonably satisfactory to the
Merger Sub and its counsel. The Purchaser and the Merger Sub will supply to the
Company and be solely responsible for any written information so provided by it
or its affiliates with respect to its nominees, officers, directors and
affiliates required by Section 14(f) and Rule 14-f-1.
Notwithstanding anything in this Agreement to the contrary, if the Merger
Sub's designees are elected to the Company's Board of Directors, after the
acceptance for payment and purchase of Shares pursuant to the Offer and prior to
the Effective Time (i) the affirmative vote of a majority of the Continuing
Directors shall be required to amend or terminate this Agreement on behalf of
the Company, amend the Company's certificate of incorporation, or the Company's
By-laws, exercise or waive any of the Company's rights or remedies hereunder,
extend the time for performance of the Purchaser or the Merger Sub's obligations
hereunder, or take any other action by the Company in connection with this
Agreement required to be taken by the Company's Board of Directors, and any such
actions when so taken shall be deemed to constitute the action of the full Board
of Directors of the Company and any committee specifically designated by the
Company Board of Directors to approve the actions contemplated hereby, and (ii)
neither the Merger Sub nor the Purchaser shall, directly or indirectly, cause
the Company to breach its obligations hereunder.
ARTICLE 2
THE MERGER
2.1 The Merger. At the Effective Time (as defined in Section 2.3), in
accordance with this Agreement and the Delaware General Corporation Law, as
amended (the "Delaware Law"), the Merger Sub (or another direct or indirect
wholly-owned subsidiary of the Purchaser) shall be
5
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<PAGE>
merged with and into the Company (the "Merger"), the separate existence of the
Merger Sub (except as may be continued by operation of law) shall cease, and the
Company shall continue as the surviving corporation under the corporate name it
possesses immediately prior to the Effective Time. The Company, in its capacity
as the corporation surviving the Merger, sometimes is referred to herein as the
"Surviving Corporation." Notwithstanding the foregoing, the Merger Sub may
revise the structure of the Merger (including merging the Company into the
Merger Sub or merging the Company with or into another direct or indirect
wholly-owned subsidiary of the Purchaser) provided that any such restructuring
does not adversely affect the stockholders of the Company and does not cause the
Company to breach its representations and warranties hereunder.
2.2 Effect of the Merger. The Surviving Corporation shall possess all the
rights, privileges, immunities and franchises, both public and private, of the
Merger Sub and the Company (collectively, the "Constituent Corporations"); shall
be vested with all property, whether real, personal, or mixed, and all debts due
on whatever account, including subscriptions to shares, and all other choses in
action, and all and every other interest belonging to or due to each of the
Constituent Corporations; and shall be responsible and liable for all the
obligations and liabilities of each of the Constituent Corporations, all with
the effect set forth in the Delaware Law.
2.3 Consummation of the Merger. As soon as is practicable after the
satisfaction or waiver, if possible, of the conditions set forth in Article 7,
and in no event later than five business days after such satisfaction or waiver,
the parties hereto will cause an Agreement or Certificate of Merger to be filed
with the Secretary of State of the State of Delaware, in such form as required
by, and executed in accordance with, the relevant provisions of applicable law
using the procedures permitted in Section 253 (if possible) or Section 251 of
the Delaware Law. The Merger shall be effective at the time of the filing of the
Agreement or Certificate of Merger with the Secretary of State of the State of
Delaware (the "Effective Time").
2.4 Certificate of Incorporation and By-Laws; Directors and Officers. The
Certificate of Incorporation and By-Laws of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation and By-Laws of the Surviving Corporation immediately after the
Effective Time and shall thereafter continue to be its Certificate of
Incorporation and By-Laws until amended as provided therein and under the
Delaware Law. The directors and officers of the Merger Sub holding office
immediately prior to the Effective Time shall be the directors and officers of
the Surviving Corporation immediately after the Effective Time.
2.5 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of the Merger Sub, the Company or the
holder of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time, other than Shares to be cancelled pursuant to Section 2.5(b)
hereof, shall automatically be cancelled and extinguished and, other than Shares
with respect to which appraisal rights are
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<PAGE>
properly exercised ("Dissenting Shares"), be converted into and become a right
to receive in cash the highest price per share paid pursuant to the Offer (the
"Merger Consideration").
(b) Each Share issued and outstanding immediately prior to the
Effective Time and held in the treasury of the Company or owned by the Purchaser
or any subsidiary thereof shall automatically be cancelled and retired and no
payment shall be made with respect thereto.
(c) Each share of the Merger Sub's Common Stock, par value $.01 per
share, issued and outstanding immediately prior to the Effective Time shall
automatically be converted into and become one validly issued, fully paid and
nonassessable share of Common Stock, par value $.01 per share, of the Surviving
Corporation.
(d) The holders of Dissenting Shares, if any, shall be entitled to
payment for such shares only to the extent permitted by and in accordance with
the provisions of Section 262 of the Delaware Law; provided, however, that if,
in accordance with such Section of the Delaware Law, any holder of Dissenting
Shares shall (i) subsequently withdraw his demand for payment for such shares,
or (ii) fail to maintain a petition for appraisal as provided in such Section;
or if neither any holder of Dissenting Shares nor the Surviving Corporation has
filed suit as provided in Section 262 of the Delaware Law, such holder or
holders (as the case may be) shall forfeit such right to payment of such Shares,
and such Shares shall thereupon be deemed to have been converted into and to
have become exchangeable for, as of the Effective Time, the right to receive the
Merger Consideration.
2.6 Company Stock Options. Each holder of then outstanding options,
warrants or other rights to acquire Shares ("Options") granted under any
employee or non-employee compensation plan, agreement or arrangement of the
Company (the "Stock Plans") that are fully vested at the Effective Time in
accordance with the respective Stock Plan shall be entitled, at the Effective
Time, to receive payment with respect thereto in accordance with the provisions
of Section 6.3(a) hereof.
2.7 Surrender of Shares; Stock Transfer Books.
(a) Prior to the Effective Time, the Merger Sub shall designate a bank
or trust company reasonably satisfactory to the Company to act as agent for the
holders of Shares (the "Exchange Agent") to receive the Merger Consideration,
and at or immediately following the Effective Time, the Purchaser shall take all
steps necessary to cause the Merger Sub to have sufficient funds to be able to
provide the Exchange Agent with the funds necessary to make the payments
contemplated by this Article II.
(b) Promptly after the Effective Time, the Exchange Agent shall mail to
each person who was, at the Effective Time, a holder of record of Shares
entitled to receive the Merger Consideration pursuant to Section 2.5(a) a letter
of transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the certificates previously representing Shares to be
exchanged pursuant to the Merger (the "Certificates") shall pass, only upon
proper delivery of such Certificates to the Exchange Agent) and instructions for
use thereof in effecting the
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surrender of the Certificates. Upon surrender to the Exchange Agent of the
Certificates, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, and such other
documents as may be requested, the Exchange Agent shall promptly deliver to the
persons entitled thereto the Merger Consideration payable in respect of the
Shares represented by the Certificates, and the Certificates shall forthwith be
cancelled. Until so surrendered and exchanged, each such Certificate (other than
Certificates representing Shares held in the treasury of the Company, by the
Merger Sub or any subsidiary of the Purchaser and Dissenting Shares) evidencing
Shares shall, after the Effective Time, be deemed to evidence only the right to
receive the Merger Consideration.
(c) If delivery of the Merger Consideration in respect of cancelled
Shares is to be made to a person other than the person in whose name a
surrendered Certificate or instrument is registered, it shall be a condition to
such delivery or payment that the Certificate or instrument so surrendered shall
be properly endorsed or shall be otherwise in proper form for transfer and that
the person requesting such delivery or payment shall have paid any transfer and
other taxes required by reason of such delivery or payment in a name other than
that of the registered holder of the Certificate or instrument surrendered or
shall have established to the satisfaction of the Surviving Corporation or the
Exchange Agent that such tax either has been paid or is not payable.
(d) At the Effective Time, the stock transfer books of the Company
shall be closed and there shall be no further registration of transfers of
Shares thereafter on the records of the Company. From and after the Effective
Time, holders of Certificates evidencing ownership of Shares outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Shares except as otherwise provided herein or by law. No
interest shall be paid or accrue on any portion of the Merger Consideration.
(e) Notwithstanding anything to the contrary in this Section 2.7, none
of the Exchange Agent, the Surviving Corporation or any party hereto shall be
liable to a holder of Shares for any amount properly paid to a public official
pursuant to any applicable property, escheat or similar law.
2.8 Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting of such person of a bond in such reasonable
amount as the Surviving Corporation may direct as indemnity against any claim
that may be made against it with respect to such Certificate, the Exchange Agent
shall pay in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration pursuant to this Agreement.
2.9 Taking of Necessary Action; Further Action. The Purchaser, the Merger
Sub and the Company, respectively, shall use all reasonable efforts to take all
such action as may be reasonably necessary or appropriate in order to effectuate
the Offer and the Merger as promptly as possible and to carry out the
transactions provided for herein or contemplated hereby. If at any time after
the Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all
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assets, property, rights, privileges, immunities, powers and franchises of
either of the Constituent Corporations, the officers and directors of the
Surviving Corporation are fully authorized in the name of either of the
Constituent Corporations or otherwise to take, and shall take, all such action.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND THE
MERGER SUB
The Purchaser and the Merger Sub hereby agree and represent and warrant to
the Company as follows:
3.1 Organization and Qualification. Each of the Purchaser and the Merger
Sub has been duly incorporated and is validly existing as a corporation in good
standing under the laws of Delaware and has the requisite corporate power to
carry on its respective business as now conducted. Each of the Purchaser and the
Merger Sub is duly qualified as a foreign corporation in good standing in each
jurisdiction in which the character of its properties owned or leased or the
nature of its activities makes such qualification necessary, except where the
failure to be so qualified would not have a material adverse effect on the
business, assets, revenues, operations or financial condition of the Purchaser
and its subsidiaries, taken as a whole. As of the date of this Agreement, the
Purchaser and the Merger Sub have no obligations or liabilities, and none of
such parties are parties to any litigation, which in any case if paid or
adversely determined would have a material effect on their ability to consummate
the transactions contemplated by this Agreement. The Merger Sub is a
wholly-owned subsidiary of the Purchaser. The Certificate of Incorporation and
By-Laws of the Merger Sub contain no provisions which would have a material
adverse effect on the Merger Sub's ability to consummate the transactions
contemplated by this Agreement.
3.2 Authority Relative to this Agreement. Each of the Purchaser and the
Merger Sub has the requisite corporate power and authority to enter into this
Agreement and the Shareholders Agreement, as applicable, and to carry out its
respective obligations hereunder and thereunder. The execution and delivery of
this Agreement and the Shareholders Agreement, as applicable, by the Purchaser
and the Merger Sub, as applicable, and the consummation by the Purchaser and the
Merger Sub, as applicable, of the transactions contemplated hereby and thereby
have been duly authorized by the respective Boards of Directors of the Purchaser
and the Merger Sub, as applicable, by the Purchaser as the sole stockholder of
the Merger Sub, and no other corporate proceedings, including the vote of the
stockholders of the Purchaser, on the part of the Purchaser or the Merger Sub
are necessary to authorize this Agreement or the Shareholders Agreement, as
applicable, or commence the Offer and consummate the transactions contemplated
hereby and thereby. This Agreement and the Shareholders Agreement, as
applicable, have been duly executed and delivered by the Purchaser and the
Merger Sub and constitute valid and binding obligations of each such company, as
applicable, enforceable in accordance with their terms subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting or relating to the enforcement of creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity (regardless of whether
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enforcement is sought in a proceeding at law or in equity). Neither the
Purchaser nor the Merger Sub is subject to or obligated under any provision of
(a) its Certificate of Incorporation or By-Laws, or (b) any contract, indenture,
instrument, or other agreement, or (c) any license, franchise or permit, or (d)
any law, regulation, order, judgment or decree, which would be breached,
violated or defaulted or in respect of which a right of termination or
acceleration or any encumbrance on any of its assets could be created by its
execution, delivery and performance of this Agreement or the Shareholders
Agreement, as applicable, and the consummation by it of the transactions
contemplated hereby and thereby, other than any such breaches, violations,
defaults, rights of termination or acceleration, or encumbrances, which will
not, individually or in the aggregate, have a material adverse effect on the
ability of the Merger Sub to consummate the Offer or the Merger. Other than in
connection with or in compliance with the provisions of the Delaware Law, the
Exchange Act, the Hart-Scott-Rodino Act, no authorization, consent or approval
of, or filing with, any public body, court or authority is necessary on the part
of the Purchaser or the Merger Sub for the consummation by the Purchaser and the
Merger Sub of the transactions contemplated by this Agreement or the
Shareholders Agreement, as applicable, other than filings with such foreign
jurisdictions in which subsidiaries of the Company are organized which may
require filings to be made in connection with the transfer of control of such
subsidiaries, and the Purchaser and the Merger Sub each agrees to make any and
all such filings on or prior to the Effective Time if any of such parties are
required to make such filings under applicable law.
3.3 Offer Documents; Proxy Information. The Offer Documents shall in all
material respects conform with the requirements of the Exchange Act and the
rules and regulations thereunder (except that the foregoing representation shall
not apply with respect to the accuracy of information relating to the Company
which has been excerpted or derived from public sources or furnished in writing
by the Company specifically for inclusion in the Offer Documents). As of their
respective dates, and on the date they are first published, sent or given to
holders of Shares, the Offer Documents, taken as a whole, shall not contain any
misstatement of material fact or omit to state any material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances in which they were made, not misleading. The Purchaser and
the Merger Sub agree to correct the Schedule 14D-1 and the other Offer Documents
if and to the extent that any of them shall become false or misleading in any
material respect, and the Purchaser and the Merger Sub further agree to take all
steps necessary to cause the Schedule 14D-1 as so corrected to be disseminated
to holders of Shares, in each case as and to the extent required by applicable
law. The information supplied by the Purchaser for inclusion in the proxy
statement to be sent to the stockholders of the Company in connection with the
meeting of the Company's stockholders to consider the Merger, or the information
statement to be sent to such stockholders, as appropriate, shall not, on the
date the proxy statement or information statement (including any amendments or
supplements thereto) is first mailed to stockholders, at the time of such
stockholders' meeting, if any, or at the Effective Time, contain any statement
which, at such time and in light of the circumstances under which it shall be
made, is false or misleading with respect to any material fact, or shall omit to
state any material fact necessary in order to make the statements therein not
false or misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for such stockholders'
meeting which has become false or misleading.
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3.4 Financing. The Purchaser and the Merger Sub have available financing in
an amount sufficient to consummate the Offer and the Merger.
3.5 No Violation of the Margin Rules. None of the transactions contemplated
by this Agreement will violate or result in the violation of Section 7 of the
Exchange Act or any regulation promulgated pursuant thereto, including, without
limitation, Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System.
3.6 No Prior Activities. Except for obligations incurred in connection with
its incorporation or organization or the negotiation and consummation of this
Agreement or the Shareholders Agreement and the transactions contemplated hereby
or thereof, the Merger Sub has neither incurred any obligation or liability nor
engaged in any business or activity of any type or kind whatsoever or entered
into any agreement or arrangement with any person.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser and the Merger
Sub, except as set forth in the Disclosure Schedule which was dated and
delivered to the Purchaser and the Merger Sub on the date hereof, as follows:
4.1 Organization and Qualification. The Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
Delaware. The Company is duly qualified as a foreign corporation in good
standing in each jurisdiction in which the character of its properties owned or
leased or the nature of its activities makes such qualification necessary,
except where the failure to be so qualified would not have a material adverse
effect, individually or in the aggregate, on the business, liabilities,
revenues, operations, results of operations or financial condition of the
Company and its subsidiaries, taken as a whole ("Company Material Adverse
Effect"), other than changes (and the effects of changes) in general economic
conditions and any change, circumstance or effect relating generally to the
industries in which the Company operates and not specifically relating to the
Company or its subsidiaries. The Company has full corporate power and authority
to own its properties and conduct its business as presently owned and conducted.
The copies of the Certificate of Incorporation and By-Laws of the Company
previously delivered to the Merger Sub are true, correct and complete as of the
date hereof.
4.2 Subsidiaries. Each subsidiary of the Company, all of which are listed
in either Exhibit 21.1 to the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1998 (the "Form 10-K Report") or the Disclosure
Schedule, has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation, is duly
qualified as a foreign corporation in good standing in each jurisdiction in
which the character of its properties owned or leased or the nature of its
activities make such qualification necessary, except where the failure to be so
qualified would not have a Company Material Adverse Effect, and has full
corporate power and authority to own its
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properties and conduct its business as presently owned and conducted. The
Company owns, directly or indirectly, all of the outstanding shares of capital
stock of each such subsidiary free and clear of all liens, claims, charges or
encumbrances except as disclosed in Schedule 4.2; there are no irrevocable
proxies with respect to such shares; and all such shares are validly issued,
fully paid and nonassessable. Except for the capital stock of such subsidiaries
or otherwise as disclosed in Schedule 4.2 or the Form 10-K Report, the Company
does not own, directly or indirectly, any investment in (a) any partnership,
limited liability company or joint venture or (b) any equity or debt investment
having either a fair market or face value or cost in excess of $100,000. Except
as disclosed in Schedule 4.2, neither the Company nor any of its subsidiaries is
obligated to make any payments in the form of earn-outs, deferred purchase price
or other consideration in respect of the purchase price payable in connection
with the acquisition of any subsidiary or business.
4.3 Capitalization. The authorized capital stock of the Company consists of
40,000,000 Shares and 10,000,000 shares of preferred stock, $.01 par value
("Preferred Stock"). As of the date hereof, 17,277,054 Shares, and no shares of
Preferred Stock, are issued and outstanding. All issued and outstanding Shares
are duly authorized and issued, and are fully paid and nonassessable. As of the
date hereof, (a) 4,491,074 Shares are reserved for issuance pursuant to
outstanding stock options and (b) 1,458,926 shares are reserved for future
grants pursuant to the Stock Plans. Schedule 4.3 sets forth a complete and
correct list of the Company's outstanding stock options, including for each the
name of the option holder, the date of grant, the plan under which the option
(or any portion thereof) was granted, and the next occurring date and the number
of Shares as to which any portion of the option becomes exercisable. Except as
otherwise described in Schedule 4.3, there are no options, warrants, conversion
privileges or other rights, agreements, arrangements or commitments obligating
the Company or any of its subsidiaries to issue or sell any shares of, or make
any payments based on the value or appreciation of any, capital stock of the
Company or any of its subsidiaries or securities or obligations of any kind
convertible into or exchangeable for any shares of capital stock of the Company,
any of its subsidiaries or any other person. The holders of outstanding Shares
are not entitled to any contractual or statutory preemptive or other similar
rights. Upon consummation of the Merger in accordance with the terms of this
Agreement, the Merger Sub will own the entire equity interest in the Company,
and there will be no options, warrants, conversion privileges or other rights,
agreements, arrangements or commitments obligating the Company or any of its
subsidiaries to issue or sell any shares of capital stock of the Company or of
any of its subsidiaries.
4.4 Authority Relative to this Agreement. The Company has the requisite
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly and unanimously authorized by the Board of Directors of
the Company and, except for the approval of its stockholders (if required) as
set forth in Section 6.1, no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting or relating to the enforcement of creditors' rights and remedies
generally and subject, as to enforceability, to
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general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). Neither the Company nor any of its subsidiaries
is subject to or obligated under any provision of (a) its Certificate or
Articles of Incorporation or By-Laws, (b) except as set forth in the Disclosure
Schedule, any material contract, (c) any license, franchise or permit, or (d)
any law, regulation, order, judgment or decree, which would be breached or
violated or in respect of which a right of termination or acceleration or any
encumbrance on any of its or any of its subsidiaries' assets could be created by
the Company's execution, delivery and performance of this Agreement and the
consummation by the Company of the transactions contemplated hereby, other than,
in the case of clause (c) or (d), any such breaches, violations, rights or
encumbrances which will not, individually or in the aggregate, have a Company
Material Adverse Effect. Other than in connection with or in compliance with the
provisions of the Delaware Law, the Exchange Act and the Hart-Scott-Rodino Act,
no authorization, consent or approval of, or filing with, any public body, court
or authority is necessary for the consummation by the Company of the
transactions contemplated by this Agreement.
4.5 Commission Filings. The Company has heretofore delivered to the Merger
Sub copies of the Company's (a) Form 10-K Report, (b) quarterly reports or Form
10-Q for each fiscal quarter of the Company during the Company's fiscal year
ended September 30, 1999, and (c) all proxy statements relating to the Company's
meetings of stockholders (whether annual or special) during 1998 and 1999, in
each case as filed with the Commission. The Company has heretofore made
available to the Merger Sub all other reports, registration statements and other
documents filed by the Company with the Commission under the Exchange Act and
the Securities Act. All such documents described in the first two sentences of
this section are collectively referred to herein as the "Commission Filings."
Except as set forth on the Disclosure Schedule, the Company has not filed any
Form 8-K Reports with the Commission since September 30, 1998. The Company has
timely filed all reports, registration statements and other documents required
to be filed with the Commission under the rules and regulations of the
Commission, and all Commission Filings complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be.
As of their respective dates, the Commission Filings (including in all cases any
exhibits or schedules thereto or documents incorporated therein by reference)
did not contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
4.6 Financial Statements and Related Data. The audited consolidated
financial statements of the Company included in the Form 10-K Report have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and changes in
financial position for the periods then ended. The unaudited consolidated
financial statements of the Company included in the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1999 and the unaudited consolidated
financial statements of the Company for the fiscal year ended September 30, 1999
(attached hereto as Schedule 4.6) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved
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(except that such financial statements are unaudited, subject to normal year end
adjustments, none of which will be material, and do not contain all of the
footnote disclosure required by generally accepted accounting principles) and
fairly present in all material respects the consolidated financial position of
the Company and its consolidated subsidiaries as of the date thereof and the
consolidated results of their operations and changes in financial position for
the period then ended.
4.7 Absence of Certain Changes or Events. Except as contemplated by this
Agreement, or reflected in any financial statement or note thereto referred to
in Section 4.6 or reflected in the Disclosure Schedule, or reflected in any
Commission Filing filed prior to the date hereof, since September 30, 1998,
there has not been (a) any change having a Company Material Adverse Effect; (b)
any damage, destruction or loss, whether covered by insurance or not, having a
Company Material Adverse Effect; (c) any entry by the Company or any subsidiary
into any commitment or transaction material to the Company and its subsidiaries
taken as a whole, which is not in the ordinary course of business; (d) any
change by the Company in accounting principles or methods except insofar as may
be required by a change in generally accepted accounting principles; (e) any
declaration, payment or setting aside for payment of any dividends or purchase
or redemption of any securities of the Company or (f) any entering into or
modification of any employment or severance contract with any executive officer
of the Company or any of its subsidiaries or any increase in compensation
payable by the Company or any of its subsidiaries to any of their executive
officers or any increase, which individually or in the aggregate exceeds
$200,000, under any bonus, pension or benefit plan.
4.8 Litigation. Except as previously disclosed in the Commission Filings
filed prior to the date hereof or as set forth on Schedule 4.8(a), no action,
suit, claim, proceeding, investigation, compliance review, or other legal or
administrative proceeding is pending or, to the knowledge of any of the persons
listed on Schedule 4.8(b) (the "Company's Knowledge"), threatened at law, in
equity or otherwise, before any court, board, commission, agency or
instrumentality of any federal, state, or local government or of any agency or
subdivision thereof, or before any arbitrator or panel of arbitrators (a
"Claim") which is Material (as defined in this Section 4.8) against (i) the
Company, (ii) or any of its subsidiaries or (iii) against any of the officers or
directors of the Company or any of its subsidiaries with respect to the Company
or its subsidiaries or the business or property of the Company or its
subsidiaries; nor does a state of facts exist which could give rise to such a
Claim. For purposes of this Section 4.8, a Claim is "Material" if such a Claim
(i) seeks damages in an amount exceeding applicable insurance coverage by $1
million, (ii) seeks damages in an unspecified amount and such damages could
exceed applicable insurance coverage by $1 million or (iii) seeks equitable or
other relief which could have a Company Material Adverse Effect.
4.9 Liabilities. Except as disclosed in Schedule 4.9, the financial
statements described in Section 4.6 or in any Commission Filings prior to the
date hereof, neither the Company nor any of its subsidiaries has any material
obligation or liability (whether accrued, absolute, contingent, unliquidated or
otherwise, whether or not known to the Company, whether due or to become due)
other than liabilities incurred since September 30, 1999 in the ordinary course
of business
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consistent with past practice, which in the aggregate are not material to the
Company and its subsidiaries, taken as a whole.
4.10 Environmental Matters. The Company and its subsidiaries have obtained
all material permits, licenses and other authorizations which are required under
applicable federal, state, local and foreign laws or regulations relating to
public health and safety, worker health and safety, pollution or protection of
the environment, including those relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants or hazardous or toxic materials or wastes
(collectively, "Environmental Laws"), except where its failure to obtain the
same would not have a Company Material Adverse Effect. The Company and its
subsidiaries have complied and are in compliance with all terms and conditions
of any and all permits, licenses, and authorizations required by Environmental
Laws, and with all other applicable limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law, or any notice or demand letter
issued, entered, promulgated or approved thereunder, except where the failure to
comply would not have a Company Material Adverse Effect.
4.11 Employee Benefit Plans.
(a) Schedule 4.11(a) hereto sets forth a list of all "employee benefit
plans," as defined in Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and all other material employee benefit or
compensation arrangements or policies (whether or not written, whether U.S. or
foreign, and whether or not subject to ERISA), including, without limitation,
any such arrangements providing severance pay, sick leave, vacation pay, salary
continuation for disability, retirement benefits, deferred compensation, bonus
pay, incentive pay, stock purchase plan, stock options (including those held by
directors, employees, and consultants), hospitalization insurance, medical
insurance, life insurance, scholarships or tuition reimbursements, that are
maintained by the Company, any subsidiary of the Company or any Company ERISA
Affiliate (as defined in this Section 4.11) or with respect to which the
Company, any subsidiary of the Company or any Company ERISA Affiliate has or may
have any liability, contingent or otherwise (the "Company Employee Benefit
Plans").
(b) The Company has made available to the Purchaser a complete and
current copy of each Company Employee Benefit Plan document or a written
description of any unwritten Company Employee Benefit Plan; any employee
handbook applicable to employees of the Company or any subsidiary; and with
respect to any Company Employee Benefit Plan, any related trust agreement or
insurance contract; the most recent summary plan description, the most recent
IRS determination letter (including IRS determination upon termination of any
Company Employee Benefit Plan), and the two most recent (i) Forms 5500 and
attached schedules; (ii) audited financial statements and (iii) participant
account and valuation reports.
(c) None of the Company Employee Benefit Plans is a "multiemployer
plan," as defined in Section 4001(a)(3) of ERISA (a "Multiemployer Plan"), and
neither the Company nor any subsidiary of the Company or Company ERISA Affiliate
presently contributes to or has contributed to such a plan.
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(d) Except as set forth on Schedule 4.11(d) or as provided in Part 6 of
Title I of ERISA, none of the Company, any subsidiary of the Company or any
Company ERISA Affiliate maintain or contribute to any plan or arrangement which
provides or has any liability to provide life insurance or medical or other
employee welfare benefits to any employee or former employee upon his retirement
or termination of employment, and none of the Company, any subsidiary of the
Company or any Company ERISA Affiliate have represented, promised or contracted
(whether in oral or written form) to any employee or former employee that such
benefits would be provided.
(e) Except as provided for in the Options set forth in Schedule 5.1(b),
the execution of, and performance of the transactions contemplated in, this
Agreement will not, either alone or upon the occurrence of subsequent events,
result in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any individual. There are no
severance agreements, severance policies, employment agreements or other
promises applicable to the Company, any subsidiary of the Company or any Company
ERISA Affiliate in the event of a change of control of the Company. Except as
previously disclosed in writing to the Purchaser, no payment or benefit which
will or may be made by the Company, the Purchaser, the Merger Sub or any of
their subsidiaries or affiliates with respect to any employee of the Company,
any subsidiary of the Company or any Company ERISA Affiliate will be
characterized as an "excess parachute payment" within the meaning of Section
280G(b)(1) of the Internal Revenue Code of 1986, as amended.
(f) Each Company Employee Benefit Plan that is intended to qualify
under Section 401 of the Code, and each trust maintained pursuant thereto, has
been determined to be so qualified and exempt from federal income taxation under
Section 501 of the Code by the IRS, and, to the Company's Knowledge, nothing has
occurred with respect to the operation or organization of any such Company
Employee Benefit Plan that would cause the loss of such qualification or
exemption or the imposition of any liability, penalty or tax under ERISA or the
Code. No Company Employee Benefit Plan is a "defined benefit plan" within the
meaning of Section 3(35) of ERISA, and neither the Company nor any subsidiary of
the Company or any Company ERISA Affiliate maintains or has maintained such a
plan in the last five years.
(g) Except as set forth on Schedule 4.11(g), no Company Employee
Benefit Plan covers employees other than employees of the Company, any
subsidiary of the Company or any Company ERISA Affiliate. None of the Company,
any subsidiary of the Company or any Company ERISA Affiliate has communicated to
present or former employees of the Company, any subsidiary of the Company or
Company ERISA Affiliate, or formerly adopted or authorized, any additional
employee benefit plan or program or any change in or termination of any existing
Company Employee Benefit Plan.
(h) (i) All contributions (including all employer contributions and
employee salary reduction contributions) required to have been made under any of
the Company Employee Benefit Plans to any funds or trusts established thereunder
or in connection therewith have been
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made by the due date thereof (including any permitted extensions), and have been
properly accrued and reflected on the Company's financial statements, (ii) each
of the Company, any subsidiary of the Company and any Company ERISA Affiliate
have complied in all material respects with any notice, reporting and
documentation requirements of ERISA and the Code, (iii) there are no pending
actions, claims (other than routine claims for benefits) or lawsuits which have
been asserted, instituted or, to the Company's Knowledge, threatened, in
connection with any of the Company Employee Benefit Plans, and (iv) the Company
Employee Benefit Plans have been maintained, in all material respects, in
accordance with their terms and with all provisions of ERISA and the Code
(including rules and regulations thereunder) and other applicable federal and
state laws and regulations.
(i) Schedule 4.11(i) sets forth a complete list of all amounts
outstanding relating to bonuses payable to employees and any obligation to pay
bonuses to employees relating to the Company's performance, the employees'
performance or the transactions contemplated hereby.
(j) No compensation paid to any employees of the Company or its
subsidiaries will result in any material nondeductibility under Section 162(m)
of the Code.
(k) The Company has provided, or will promptly provide, all notices to
holders of Options required under any Stock Plan or otherwise in connection with
the Offer and the other transactions contemplated hereby.
(l) No Company Employee Benefit Plan is currently under governmental
investigation or audit, and to the Company's Knowledge, no such investigation or
audit is threatened.
(m) With respect to Company Employee Benefit Plans that are not U.S.
plans ("Foreign Plans"), if any, (i) each Foreign Plan covers only employees of
a single company and no other employee and covers only employees who are in a
single country; (ii) each Foreign Plan and the manner in which it has been
administered satisfy in all material respects all applicable laws and
regulations, (iii) all contributions to each Foreign Plan required through the
Effective Date will be made by the Company or a subsidiary; and (iv) each
Foreign Plan is either fully funded (or fully insured) based upon generally
accepted local actuarial and accounting practice and procedure or appropriate
liabilities for each Foreign Plan are fully reflected on the Company's financial
statements dated September 30, 1999.
For purposes of this Agreement, "Company ERISA Affiliate" means any
business or entity which is a member of the same "controlled group of
corporations," under "common control" or a member of an "affiliated service
group" with the Company within the meanings of Sections 414(b), (c) or (m) of
the Code, or required to be aggregated with the Company under Section 414(o) of
the Code, or is under "common control" with the Company, within the meaning of
Section 4001(a)(14) of ERISA, or any regulations promulgated or proposed under
any of the foregoing Sections.
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4.12 Labor and Employment Matters.
(a) (i) Except as set forth on Schedule 4.12(a)(i), there are no
controversies pending or, to the Company's Knowledge, threatened, between the
Company or any of its subsidiaries and any group of their respective employees;
(ii) neither the Company nor, to the Company's Knowledge, any of its
subsidiaries, is a party to any collective bargaining agreement or other labor
union contract applicable to persons employed by the Company or its subsidiaries
nor to the Company's Knowledge, except as set forth on Schedule 4.12(a)(ii),
have there been any activities or proceedings of any labor union to organize any
such employees during 1998 or 1999; (iii) neither the Company nor any of its
subsidiaries has breached or otherwise failed to comply with any provision of
any such agreement or contract and there are no grievances outstanding against
any such parties under any such agreement or contract; (iv) there are no unfair
labor practice complaints pending against the Company or any of its subsidiaries
before the National Labor Relations Board or any current union representation
questions involving employees of the Company or any of its subsidiaries; and (v)
to the Company's Knowledge, there are no strikes, slowdowns, work stoppages,
lockouts, or threats thereof, by or with respect to any employees of the Company
or any of its subsidiaries. No consent of any union which is a party to any
collective bargaining agreement with the Company is required to consummate the
transactions contemplated by this Agreement. The Company is in and has been in
compliance with all federal, state and local laws relating to employment
(including employment discrimination), wages and hours, working conditions,
occupational safety, workers compensation and the payment of social security and
other payroll related taxes, except where noncompliance would not reasonably be
expected to have a Company Material Adverse Effect and neither the Company nor
its subsidiaries have received any written notice alleging a failure to comply
in any material respect with any such laws, rules or regulations.
(b) Except as set forth on Schedule 4.12(b), within the 90 days prior
to the date hereof, (i) neither the Company nor any subsidiary has effectuated
(x) a "plant closing" (as defined in the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. 'SS'2101, et seq., the "WARN Act") affecting any
site of employment or one or more facilities or operating units within any site
of employment or facility, or (y) a "mass layoff" (as defined in the WARN Act)
affecting any site of employment or one or more facilities or operating units
within any site of employment or facility, (ii) neither the Company nor any
subsidiary has been affected by any transaction or engaged in layoffs or
employment terminations sufficient in number to trigger application of any
similar foreign, state or local law, and (iii) no employee of the Company or any
subsidiary has suffered an "employment loss" (as defined in the WARN Act).
(c) The Executive Employment Agreement, dated as of September 19, 1996,
by and between the Company and P. Quentin Bourjeaurd (the "Executive"), as
amended by the letter agreement dated October 31, 1999 (a copy of such amendment
is set forth on Schedule 4.12(c)), has been duly executed and delivered by the
Company and the Executive and constitutes a valid and binding obligation of the
Executive, enforceable in acccordance with its terms subject to applicable
bankruptcy, insolvency, moratorium and similar laws affecting or relating to the
enforcement of creditors' rights and remedies generally and subject, as to
enforceability, to
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general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
4.13 Offer Documents. Neither the Schedule 14D-9 nor any of the information
supplied by the Company for inclusion in the Offer Documents shall, at the
respective times the Schedule 14D-9, the Offer Documents or any such amendments
or supplements are filed with the SEC or are first published, sent or given to
stockholders, as the case may be, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. In the event that the
Merger Sub has not designated a majority of the members of the Company's Board
of Directors pursuant to the terms of Section 1.3 hereof and a stockholder vote
is required, all information supplied by the Company for inclusion in any proxy
or information statement filed with the Commission and sent or given to
stockholders pursuant to Section 6.2 hereof shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not false or misleading at the
time of filing with the Commission, mailing to stockholders, any meeting of
stockholders or the Effective Time. Notwithstanding the foregoing, the Company
makes no representation or warranty with respect to any information which is
supplied in writing by the Purchaser or the Merger Sub specifically for
inclusion and which is contained in any of the foregoing documents or which is
excerpted or derived from public sources.
4.14 Intellectual Property; Year 2000.
(a) The Company and its subsidiaries own the entire right, title and
interest in and to or have the right to use (pursuant to valid and defensible
license arrangements), all Intellectual Property (as defined below) used or held
for use in, or otherwise necessary for, the operation of their respective
businesses, except as set forth in Schedule 4.14(a) or as would not, in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Except as set forth in Schedule 4.14(a), there are no pending, or to the
Company's Knowledge, threatened proceedings or litigation or other adverse
claims affecting or relating to any such Intellectual Property, nor, to the
Company's Knowledge, any reasonable basis upon which a claim may be asserted by
or against the Company or any of its subsidiaries for infringement of any such
Intellectual Property that, in the aggregate, would reasonably be expected to
have a Company Material Adverse Effect. As used herein, "Intellectual Property"
means all industrial and intellectual property rights, including proprietary
technology, patents, patent applications, trademarks, trademark applications and
registrations, servicemarks, servicemark applications and registrations, trade
dress, copyrights, internet domain names, software, know-how, licenses, trade
secrets, proprietary processes, formulae and customer lists.
(b) The officers and employees of the Company or its subsidiaries and
the consultants to the Company or its subsidiaries listed on Schedule 4.14(b)
have executed agreements containing provisions regarding protection of
proprietary information and confidentiality, true and complete copies of which
have previously been provided to the Purchaser by the Company, and other
employees, consultants and contractors have executed such an
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agreement. All computer software included in the Company's or its Subsidiaries'
products (i) has been either created by employees of the Company or its
subsidiary within the scope of their employment or otherwise on a work-for-hire
basis or by consultants or contractors who have created such software themselves
and have assigned, except as otherwise specifically set forth in the agreements
with the consultants listed on Schedule 4.14(b) (true and complete copies of
such agreements have heretofore been delivered to the Purchaser) all right,
title and interest they have in such software to the Company or its subsidiary
or (ii) is licensed to the Company or its subsidiary pursuant to valid and
binding agreements.
(c) The computer systems of the Company and its subsidiaries are Year
2000 Compliant in all material respects. All inventory, products and material
independently developed applications of the Company and its subsidiaries that
are, consist of, include or use computer software are Year 2000 Compliant in all
material respects. The Company has contacted its principal vendors of hardware
and software and other persons with whom the Company has material business
relationships and all such vendors and other persons have notified the Company
that their hardware and software are Year 2000 compliant to the extent affecting
the Company in any material respect. To the Company's Knowledge, any failure on
the part of the customers of, and suppliers to, the Company and its subsidiaries
to be Year 2000 Compliant by December 31, 1999 will not have or be likely to
have a Company Material Adverse Effect. The term "Year 2000 Compliant," with
respect to a computer system or software program, means that such computer
system or program: (i) is capable of recognizing, processing, managing,
representing, interpreting and manipulating correctly date-related data for
dates earlier and later than January 1, 2000, including, but not limited to,
accepting date input, providing date output and performing calculations on dates
or portions of dates; (ii) has the ability to provide date recognition for any
data element without limitation and respond to two digit year date input in a
way that resolves the ambiguity as to century in a disclosed, defined and
predetermined manner; (iii) has the ability to function automatically into and
beyond the year 2000 without human intervention; (iv) has the ability to
interpret data, dates and time correctly into and beyond the year 2000; (v) has
the ability not to produce noncompliance in existing data, nor otherwise corrupt
such data, into and beyond the year 2000; (vi) has the ability to process
correctly after January 1, 2000, data containing dates before that date; (vii)
has the ability to store and provide output of date information in ways that are
unambiguous as to century; (viii) has the ability to function accurately and
without interruption before, during and after January 1, 2000, without any
change in operations associated with the advent of the new century; and (ix) has
the ability to recognize all "leap year" dates, including February 29, 2000.
4.15 Taxes. Each of the Company and its subsidiaries has timely filed (or
there has been timely filed on its behalf) all federal, and all material state,
local and foreign, tax returns and reports, that it was required to file. All
such tax returns and reports were correct and complete in all material respects.
All taxes owed by any of the Company and its subsidiaries have been paid except
where the failure to pay would not reasonably be expected to have a Company
Material Adverse Effect. Each of the Company and its subsidiaries has withheld
and paid all taxes required to have been withheld and paid in connection with
amounts paid to any employee, independent contractor, creditor, stockholder, or
other third party except where the failure to withhold or pay would not
reasonably be expected to have a Company Material Adverse Effect. Neither the
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Internal Revenue Service (the "IRS") nor any other taxing authority or agency is
now asserting or, to the Company's Knowledge, threatening to assert against the
Company or any of its subsidiaries any deficiency or claim for material
additional taxes or interest thereon or penalties in connection therewith. As of
the date hereof, neither the Company nor any of its subsidiaries has granted, or
been requested to grant, any waiver of any statute of limitations with respect
to, or any extension of a period for the assessment of, any federal, state,
local or foreign income tax. The accruals and reserves for taxes reflected in
the balance sheet of the Company as of September 30, 1999 have been estimated in
accordance with past practice and are adequate to cover all taxes accruable
through such date (including interest and penalties, if any, thereon) in
accordance with generally accepted accounting principles. Neither the Company
nor any of its subsidiaries has made an election under Section 341(f) of the
Code. The Company is not, and has not been during the period specified in
Section 897(c)(1)(A)(ii) of the Code, a United States real property holding
corporation within the meaning of Section 897(c) of the Code.
4.16 Brokers, Advisors. No broker, finder or investment banker (other than
Goldman, Sachs & Co.) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by and on behalf of the Company. The Company has
heretofore furnished to the Merger Sub a complete and correct copy of all
agreements between the Company and Goldman, Sachs & Co. pursuant to which such
firm would be entitled to any payment relating to the transactions contemplated
hereunder.
4.17 Product Liabilities. There are no material product warranty, product
liability or similar claims pending, or to the Company's Knowledge, threatened,
against the Company or any of its subsidiaries.
4.18 Related Party Transactions. Except as set forth in the Schedule 4.18,
or disclosed in the Commission Filings filed before the date hereof, no current
or former stockholder, director, officer or key employee of the Company or any
of its subsidiaries nor any "Associate" (as defined in Rule 405 promulgated
under the Securities Act) of any such person, is presently or has been, directly
or indirectly through his affiliation with any other person or entity, a party
to any material transaction with the Company or any of its subsidiaries
providing for the furnishing of services (except as an employee) by or to, or
rental of real or personal property from or to, or otherwise requiring cash
payments by or to any such person. In addition, except as set forth in the
Schedule 4.18 or disclosed in the Commission Filings filed before the date
hereof, during such periods there was no relationship or transaction involving
the Company or any of its subsidiaries which is described in Item 404 of
Regulation S-K promulgated under the Securities Act.
4.19. Suppliers and Customers. Schedule 4.19 sets forth a list of (a) the
ten (10) largest suppliers of materials or services to the Company during the
twelve month period ending September 30, 1999 (the "Major Suppliers") and (b)
the ten (10) largest customers of products or services of the Company during the
twelve month period ending September 30, 1999 (the "Major Customers"). Except as
set forth on Schedule 4.19, no Major Supplier or Major Customer of the Company
has during the last twelve months decreased materially or, to the Company's
Knowledge, threatened to decrease or limit materially its purchase of products
from, or provision
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of services or supplies to, as applicable, the Company. To the Company's
Knowledge, there is no termination, cancellation or limitation of, or any
material modification or change in, the business relationships of the Company
with any Major Supplier or Major Customer that would reasonably be expected to
have a Company Material Adverse Effect. Except as set forth on Schedule 4.19, to
the Company's Knowledge, there will not be any such change in relations with
Major Suppliers or Major Customers of the Company or triggering of any right of
termination, cancellation or penalty or other payment in connection with or as a
result of transactions contemplated by this Agreement which would reasonably be
expected to have a Company Material Adverse Effect.
4.20 Foreign Corrupt Practices Act. Neither the Company nor any of its
subsidiaries has at any time made or committed to make any payments for illegal
political contributions or made any bribes, kickback payments or other illegal
payments. Neither the Company nor any of its subsidiaries has made, offered or
agreed to offer anything of value to any governmental official, political party
or candidate for governmental office (or any person that the Company or its
subsidiaries knows or has reason to know, will offer anything of value to any
governmental official, political party or candidate for political office), such
that the Company or its subsidiaries have violated the Foreign Corrupt Practices
Act of 1977, as amended from time to time, and all applicable rules and
regulations promulgated thereunder. There is not now nor has there ever been any
employment by the Company or any of its subsidiaries of any governmental or
political official in any country while such official was in office.
ARTICLE 5
CONDUCT OF BUSINESS PENDING THE MERGER
5.1 Conduct of Business by the Company Pending the Merger. The Company
covenants and agrees that, prior to the Effective Time, unless the Merger Sub
shall otherwise agree in writing or except as set forth on Schedule 5.1 or as
otherwise expressly contemplated or permitted by this Agreement:
(a) The business of the Company and its subsidiaries shall be conducted
only in, and the Company and its subsidiaries shall maintain their facilities
in, the ordinary course of business and consistent with past practice;
(b) The Company shall not directly or indirectly do or permit to occur
any of the following: (i) issue, sell, pledge, dispose of or encumber (or permit
any of its subsidiaries to issue, sell, pledge, dispose of or encumber) any
shares of, or any options, warrants, conversion privileges or rights of any kind
to acquire any shares of, any capital stock of the Company or any of its
subsidiaries (other than shares issuable upon exercise of the outstanding (as of
the date hereof) options to acquire Shares in accordance with their terms in
effect on the date hereof); (ii) amend or propose to amend the Certificate or
Articles of Incorporation or By-Laws of it or any of its subsidiaries; (iii)
split, combine or reclassify any outstanding Shares, or declare, set aside or
pay any dividend or other distribution payable in cash, stock, property or
otherwise with respect to the Shares (except the declaration and payment of
dividends by a wholly-owned subsidiary of
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the Company to its parent); (iv) redeem, purchase or acquire or offer to acquire
(or permit any of its subsidiaries to redeem, purchase or acquire or offer to
acquire) any Shares or other securities of the Company or any of its
subsidiaries other than as contemplated by Section 2.5 and other than for the
repurchase by the Company, pursuant to existing agreements, of any outstanding
Shares upon termination of an employment, director or consulting relationship
with the Company; (v) enter into any material contract; or (vi) enter into or
modify any agreement, commitment or arrangement with respect to any of the
foregoing;
(c) Neither the Company nor any of its subsidiaries shall (i) sell,
pledge, lease, dispose of or encumber any material assets other than in the
ordinary course of business consistent with past practice; (ii) acquire (by
merger, consolidation, acquisition of stock or assets or otherwise) any
corporation, partnership or other business organization or enterprise or
material assets thereof; (iii) incur any indebtedness for borrowed money or
issue any debt securities for borrowings except in the ordinary course of
business and consistent with past practice; (iv) guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other person (other than a subsidiary of the Company or
the Company) except in the ordinary course of business consistent with past
practice and in amounts immaterial to the Company; or (v) enter into or modify
any contract, agreement, commitment or arrangement with respect to any of the
foregoing;
(d) Neither the Company nor any of its subsidiaries shall (i) enter
into or modify any employment, severance or similar agreements or arrangements
with, or grant any Options (or accelerate any Options), bonuses, salary
increases, severance or termination pay to, any officers or directors; or (ii)
in the case of employees who are not officers or directors, take any action to
grant or accelerate any Options, or take any other action other than in the
ordinary course of business consistent with past practice (none of which actions
shall be unreasonable or unusual) with respect to the grant or creation of any
bonuses, salary increases, severance or termination pay, employment or similar
agreements or with respect to any increase of benefits in effect on the date of
this Agreement;
(e) Except as may be required by applicable law, none of the Company,
any of its subsidiaries or any Company ERISA Affiliate shall adopt or amend any
bonus, profit sharing, compensation, stock option, pension, retirement, deferred
compensation, employment or other employee benefit plan, agreement, trust fund
or arrangement for the benefit or welfare of any employee;
(f) The Company will not (i) call any meeting (other than any meeting
contemplated by Section 6.1) of its stockholders or (ii) waive or modify any
provision of, or terminate any, confidentiality or standstill agreement entered
into by the Company with any person;
(g) The Company shall use its commercially reasonable efforts to cause
its current insurance (or reinsurance) policies not to be cancelled or
terminated or any of the coverage thereunder to lapse, unless simultaneously
with such termination, cancellation or lapse, replacement policies providing
coverage equal to or greater than the coverage under the
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cancelled, terminated or lapsed policies for substantially similar premiums are
in full force and effect;
(h) The Company (i) shall use its commercially reasonable efforts, and
cause each of its subsidiaries to use commercially reasonable efforts, to
preserve intact their respective business organizations and goodwill, keep
available the services of its officers and employees as a group and maintain
satisfactory relationships with suppliers, distributors, customers and others
having business relationships with it or its subsidiaries; (ii) shall confer on
a regular and frequent basis with representatives of the Merger Sub to report
financial matters and, to the extent not prohibited by applicable law,
operational matters and the general status of ongoing operations; (iii) shall
not take any action, and shall not permit any of its subsidiaries to take any
action, which would render, or which reasonably may be expected to render, any
representation or warranty made by it in this Agreement untrue in any respect
(or untrue in any material respect if such representation or warranty is not
qualified by "material," "Company Material Adverse Effect, a specified dollar
limitation or the like) at any time prior to the Effective Time; and (iv) shall
notify the Merger Sub of any emergency or other change in the normal course of
its or any of its subsidiaries' business or in the operation of its or any of
its subsidiaries' properties and of any governmental or third party complaints,
investigations or hearings (or communications indicating that the same may be
contemplated) if such emergency, change, complaint, investigation or hearing has
or would be reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect, or would be material to any party's ability to
consummate the transactions contemplated by this Agreement;
(i) Neither the Company nor any of its subsidiaries shall adopt a plan
of liquidation, dissolution, merger, consolidation, restructuring,
recapitalization, or reorganization;
(j) Neither the Company nor any of its subsidiaries shall make any
material tax election or settle or compromise any material federal, state,
local, or foreign tax liability, except in the ordinary course of business and
consistent with past practice;
(k) The Company shall not modify or accelerate the exercisability of
any stock options, rights or warrants presently outstanding; and
(l) The Company shall postpone the holding of its Annual Meeting of
Stockholders (the "Company Annual Meeting") indefinitely pending consummation of
the Merger unless the Company is otherwise required to hold the Company Annual
Meeting by Delaware Law.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 Action of Stockholders. The Company shall take all action necessary in
accordance with the Delaware Law and its Certificate of Incorporation and
By-Laws to convene a meeting of its stockholders as promptly as practicable
following consummation of the Offer to
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consider and vote upon the Merger, if a stockholder vote is required. If a
stockholders' meeting is convened, the Board of Directors shall recommend that
the stockholders of the Company vote to approve the Merger; provided, however,
that such recommendation may be withdrawn, modified or amended to the extent
that the Board of Directors of the Company concludes, in good faith after
consultation with its outside financial advisor, upon advice of outside legal
counsel, that it is inconsistent with such Board's fiduciary duties under
applicable law not to do so. In the event that proxies are to be solicited from
the Company's stockholders, the Company shall, if and to the extent requested by
the Merger Sub, use its reasonable efforts to solicit from stockholders of the
Company proxies in favor of such approval and shall take all other reasonable
action necessary or, in the opinion of the Merger Sub, helpful to secure a vote
or consent of stockholders in favor of the Merger. At any such meeting, the
Merger Sub shall vote or cause to be voted all of the Shares then owned by the
Merger Sub or any subsidiary of the Merger Sub in favor of the Merger and the
Company shall vote all Shares in favor of the Merger for which proxies in the
form distributed by the Company shall have been given and with respect to which
no contrary direction shall have been made.
Notwithstanding anything else herein or in this Section 6.1, if the
Purchaser, the Merger Sub and any other subsidiaries of the Purchaser shall
acquire in the aggregate a number of the outstanding Shares, pursuant to the
Offer or otherwise, sufficient to enable the Merger Sub or the Company to cause
the Merger to become effective under applicable law without a meeting of
stockholders of the Company, the parties hereto shall, at the request of the
Purchaser and subject to Article 7, take all necessary and appropriate action to
cause the Merger to become effective as soon as reasonably practicable after the
consummation of such acquisition, without a meeting of stockholders of the
Company, in accordance with Section 253 of the Delaware Law.
6.2 Proxy Statement. If a stockholder vote is required, the Company and the
Merger Sub shall cooperate with each other and use all reasonable efforts to
prepare, and the Company and the Merger Sub shall file with the Commission as
soon as reasonably practicable following consummation of the Offer and use their
reasonable efforts to have cleared by the Commission, a proxy statement or
information statement, as appropriate, with respect to the approval of the
Merger by the Company's stockholders. The information provided and to be
provided by the Purchaser, the Merger Sub and the Company, respectively, for use
in the proxy statement or information statement shall not contain an untrue
statement of material fact and shall not omit to state any material fact
required to be stated therein or necessary in order to make such information not
misleading.
6.3 Employee Benefits and Options.
(a) Option Termination. The Purchaser, the Merger Sub and the Company
hereby acknowledge and agree that neither the Purchaser nor the Surviving
Corporation shall assume or continue any outstanding Options under the Stock
Plans, or substitute any additional options, warrants or other rights for such
outstanding Options. At the Effective Time, all Options (whether vested or
unvested) shall be canceled, and holders of fully vested options at the
Effective Time shall be entitled to receive from the Surviving Corporation, in
cancellation of such vested options, an amount in cash equal to the excess of
(a) the product of the number of Shares covered
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by such vested Options multiplied by the Merger Consideration, over (b) the
product of the number of Shares covered by such vested Options multiplied by the
per-Share exercise, purchase or conversion price payable upon exercise, purchase
or conversion of the same, less applicable withholding of taxes. The Company
shall take all action necessary to effectuate the foregoing, including obtaining
any necessary consents of the holders of Options.
(b) Employment Matters. The Purchaser shall cause the Surviving
Corporation to honor, without modification adverse to the employee party
thereto, all employment, consulting, termination and severance agreements in
effect prior to the date hereof between the Company or any of its subsidiaries
and any current or former officer, director, consultant or employee of the
Company, all of which, the Company hereby represents and warrants, have been
disclosed on Schedules 4.11(a), 4.11(g) and 4.14(b).
(c) Benefit Plans. The Surviving Corporation shall (i) to the extent it
is permitted to do so under that benefit plan, waive all limitations as to
preexisting conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to the employees of the
Company or any of its subsidiaries under any benefit plan that such employees
may be eligible to participate in after the Effective Time, and (ii) provide
each employee of the Company and its subsidiaries with credit for any
co-payments and deductibles paid prior to the Effective Time in satisfying any
applicable deductible or out-of-pocket requirements under any benefit plans that
such employees are eligible to participate in after the Effective Time, but
excluding in the case of each of (i) and (ii), limitations or restrictions under
benefit plans of the Company in effect as of the Effective Time that are not met
as of the Effective Time.
6.4 Expenses. If (a) this Agreement is terminated by the Company pursuant
to Section 8.1(e)(iii) or Section 6.6, or (b) this Agreement is terminated by
the Merger Sub pursuant to Section 8.1(c), (c) the Offer is terminated by the
Merger Sub pursuant to paragraph (a) of Annex I hereto, or (d) this Agreement is
terminated pursuant to its terms for any reason other than a material breach of
this Agreement by the Purchaser or the Merger Sub, and in case of this clause
(d) (x) within six months thereafter a definitive agreement is entered into
between the Company and any person other than the Merger Sub or any affiliate of
the Merger Sub, for the acquisition or disposition of (i) all or substantially
all of the assets of the Company, or (ii) securities of the Company constituting
(or convertible into) 35% or more of the currently outstanding Shares, or for a
merger, consolidation or other reorganization of the Company, at a price
equivalent to a price per Share in excess of $9.50 and is closed concurrently
therewith or at any time thereafter or (y) within six months thereafter any
person or "group" (as that term is used in Section 13(d)(3) of the Exchange Act)
other than the Merger Sub or any affiliate of the Merger Sub shall have
acquired, beneficial ownership of 35% or more of the outstanding Shares, the
Company shall pay to the Purchaser upon demand (by wire transfer of immediately
available federal funds to an account designated by the Purchaser for such
purpose) the amount of $5,500,000 (the "Fee") to compensate the Purchaser and
the Merger Sub for taking actions to consummate this Agreement, to reimburse
them for the time and expense relating thereto and for other direct and indirect
costs (including lost opportunity costs) in connection with the transactions
contemplated herein. Payment of such amount by the Company shall constitute a
full and complete discharge of all
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obligations or liabilities of the Company under this Section 6.4. The Company
acknowledges that the provisions set forth in this Section 6.4 are an integral
part of this Agreement that have been negotiated in order to induce the
Purchaser and the Merger Sub to enter into this Agreement.
In addition to any damages caused by conduct which constitutes a breach by
any of the Purchaser or the Merger Sub or the Company of any of their
obligations under this Agreement, the breaching party agrees, jointly and
severally, to pay to the nonbreaching party all costs and expenses (including
attorneys' fees and expenses) incurred by the nonbreaching party in connection
with the enforcement by the nonbreaching party of its rights hereunder.
6.5 Additional Agreements. Subject to its fiduciary duties and the
terms and conditions provided herein, each of the parties agrees to use its best
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
as promptly as practicable the transactions contemplated by this Agreement,
including using best efforts to obtain all necessary waivers, consents and
approvals and to effect all necessary registrations and filings, including but
not limited to filings under the Hart-Scott-Rodino Act and submissions of
information requested by governmental authorities. Nothing in this Agreement
shall require that the Purchaser or the Merger Sub divest, sell or hold separate
any of their respective assets or properties or the assets or properties of the
Company, nor shall anything in this Agreement require that the Purchaser or the
Merger Sub take any action that could affect the normal and regular operations
of the Purchaser or the Company after the Effective Date. The Company shall, and
shall cause its officers, directors, affiliates and agents to, immediately cease
and cause to be terminated any existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any acquisition of or sale
of any equity interest in or substantial assets of the Company or any of its
subsidiaries. For purposes of this Section 6.5, best efforts shall not include
the obligation to make any payment to any third party as a condition to
obtaining such party's consent or approval; provided, however, that the
Purchaser and the Merger Sub shall be obligated to pay all filing and related
fees required by the Hart-Scott-Rodino Act.
6.6 No Solicitation. The Company shall not, and shall not authorize or
permit any of its officers, directors, employees or agents to directly or
indirectly, solicit, encourage, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation, partnership,
person or other entity or group (other than the Merger Sub, any of its
affiliates or representatives) (collectively, a "Person") concerning any merger,
consolidation, tender offer, exchange offer, sale of all or substantially all of
the Company's assets, sale of shares of capital stock or similar business
combination transaction involving the Company or any principal operating or
business unit of the Company or its subsidiaries (an "Acquisition Proposal").
Notwithstanding the foregoing, (i) if prior to the Merger Sub owning a majority
of the outstanding Shares the Company receives an unsolicited, written
indication of a willingness to make an Acquisition Proposal at a price per share
which the Company reasonably concludes is in excess of the Merger Consideration
from any Person and if the Company reasonably concludes in good faith, after
consultation with its outside financial advisor, that the Person delivering such
indication is capable of consummating such an Acquisition Proposal (based upon,
among other things, the availability of financing and the capacity to obtain
financing, the expectation of receipt
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of required antitrust and other regulatory approvals and the identity and
background of such Person), then the Company may provide access to or furnish or
cause to be furnished information concerning the Company's business, properties
or assets to any such Person pursuant to an appropriate confidentiality
agreement and the Company may engage in discussions related thereto, and (ii)
the Company may participate in and engage in discussions and negotiations with
any Person meeting the requirement set forth in clause (i) above in response to
a written Acquisition Proposal if the Company concludes in good faith, after
consultation with its outside financial advisor, upon advice of its legal
counsel, that the failure to engage in such discussions or negotiations is
inconsistent with such Board's fiduciary duties to the Company's stockholders
under applicable laws and the Company receives from the Person making an
Acquisition Proposal an executed confidentiality agreement the terms of which
are (without regard to the terms of the Acquisition Proposal) (A) no less
favorable to the Company, and (B) no less restrictive to the Person making the
Acquisition Proposal, than those contained in the Confidentiality Agreement. In
the event that, after the Company has received a written Acquisition Proposal
(without breaching its obligations under clause (i) or (ii) above) but prior to
the Merger Sub beneficially owning a majority of the outstanding Shares, the
Board of Directors concludes in good faith, after consultation with its outside
financial advisor, upon advice of its legal counsel, that it is inconsistent
with such Board's fiduciary duties under applicable law not to do so, the
Company may concurrently with the payment of the Fee provided in Section 6.4 do
any or all of the following: (x) withdraw or modify the Board of Directors' or
recommendation of the Merger or this Agreement, (y) approve or recommend an
Acquisition Proposal, subject to this Section 6.6 and (z) terminate this
Agreement. Furthermore, nothing contained in this Section 6.6 shall prohibit the
Company or its Board of Directors from taking and disclosing to the Company's
stockholders a position with respect to a tender or exchange offer by a third
party pursuant to Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or
from making such disclosure to the Company's stockholders or otherwise which, in
the judgment of the Board of Directors upon advice of legal counsel, is required
under applicable law or rules of any stock exchange. The Company shall promptly
(but in any event within two days) advise the Purchaser in writing of any
Acquisition Proposal or any inquiry regarding the making of an Acquisition
Proposal including any request for information, the material terms and
conditions of such request, Acquisition Proposal or inquiry and the identity of
the Person making such request, Acquisition Proposal or inquiry and thereafter
shall keep the Purchaser reasonably informed, on a current basis, of the status
and material terms of such proposals and the status of such negotiations or
discussions, providing copies to the Purchaser of any Acquisition Proposals made
in writing. The Company shall provide the Purchaser with one business day
advance notice of, in each and every case, its intention to provide any
information to, or enter into any confidentiality agreement with, any person or
entity making any such inquiry or proposal and the Company shall provide the
Purchaser with three business days advance notice of, in each and every case,
its intention to enter into any other agreement with any person or entity making
any such inquiry or proposal. The Company agrees not to release any third party
from, or waive any provisions of, any confidentiality or standstill agreement to
which the Company is a party and will use its best efforts to enforce any such
agreements at the request of and on behalf of the Purchaser. The Company will
inform the individuals or entities referred to in the first sentence of this
Section 6.6 of the obligations undertaken in this Section 6.6. The Company also
will promptly request each person or entity which has executed, within 12 months
prior to the date of this Agreement, a
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confidentiality agreement in connection with its consideration of acquiring the
Company to return or destroy all confidential information heretofore furnished
to such person or entity by or on behalf of the Company. Notwithstanding
anything contained in this Agreement to the contrary, any action by the
Company's Board of Directors permitted by, and taken in accordance with, this
Section 6.6 shall not constitute a breach of this Agreement.
Notwithstanding the provisions of the Confidentiality Agreement, (i)
following any notification to the Purchaser of a written proposal that permits
the Company to negotiate with or furnish information to any third party in
accordance with Section 6.6, and until any transaction resulting from such
proposal shall have either been consummated or the Company shall have received
written notification that any such third party shall no longer seek to engage in
such transaction with or involving the Company, the Purchaser shall be entitled
to propose or present to the Company any offer in response to such third party's
offer, and (ii) if, from the date hereof until the Effective Time, any third
party shall announce its intention to commence, or shall commence, any tender
offer to acquire Shares, the Purchaser and the Merger Sub shall be entitled to
make any public announcement or proposal, or to take any other action it or they
may deem appropriate, in response to such announcement or tender offer and which
is consistent with their obligations under this Agreement.
6.7 Notification of Certain Matters. Each party shall give prompt notice to
the others of (a) the occurrence or failure to occur of any event, which
occurrence or failure would be likely to cause any representation or warranty on
its part contained in this Agreement to be untrue or inaccurate in any respect
(or untrue in any material respect if such representation or warranty is not
qualified by "material," Company Material Adverse Effect, a specified dollar
limitation or the like) at any time from the date hereof to the Effective Time,
and (b) any failure of such party, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder.
6.8 Access to Information. From the date hereof to the Effective Time, to
the extent not prohibited by applicable law, the Company shall, and shall cause
its subsidiaries, officers, directors, employees and agents (including lenders,
attorneys and accountants), upon reasonable notice, to afford the Purchaser and
the Merger Sub reasonable access at all reasonable times to its officers,
employees, agents, properties, books and records, and shall furnish the
Purchaser and the Merger Sub all financial, operating, personnel, compensation,
tax and other data and information as the Parent or the Merger Sub, through its
officers, employees or agents, may reasonably request. All of such information
shall be treated as "Confidential Material" pursuant to the terms of the
Confidentiality Agreement, which continues (subject to the terms of this
Agreement) in full force and effect and which shall survive termination of this
Agreement.
6.9 Stockholder Claims. The Company shall not settle or compromise any
claim brought by any present, former or purported holder of any securities of
the Company in connection with the Merger prior to the Effective Time without
the prior written consent of the Merger Sub.
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6.10 Indemnification.
(a) The Certificate of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification than are set forth
in Article VIII and IX of the Certificate of Incorporation of the Company. Such
provisions in the Certificate of Incorporation of the Company and the Surviving
Corporation shall not be amended, repealed or otherwise modified for a period of
six years from the date the Purchaser or the Merger Sub acquires a majority of
the Shares in any manner that would adversely affect the rights thereunder of
individuals who at or prior to the Effective Time were directors, officers,
employees or agents of the Company, unless such modification is required by law.
In addition, the Company, as the Surviving Corporation, shall maintain in full
force and effect for a period of at least six years following the Effective
Time, directors and officers liability insurance containing terms and provisions
comparable to the terms and provisions of the current policy maintained by the
Company for the benefit of existing and former officers, directors, employees
and agents of the Company but only to the extent obtainable at a cost no more
than 100% greater than that presently incurred by the Company on the date
hereof. In the event that the Surviving Corporation cannot obtain comparable
insurance at the price level contemplated by this Section 6.10(a), the Surviving
Corporation shall obtain what it believes in good faith constitutes the best
available insurance at such price level.
(b) This Section 6.10 shall survive the Effective Time, is intended to
benefit the Company, the Surviving Corporation and each of the persons referred
to in paragraph (a) of this Section and shall be binding on all successors and
assigns of the Surviving Corporation.
6.11 Consents and Amendments. The Company shall use its best efforts to
obtain, without the payment of any fee or compensation, consents to the Offer,
the Merger, and the transactions contemplated by this Agreement from the parties
to the agreements listed on Schedule 6.11.
6.12 Audit. The Company shall use reasonable commercial efforts to have
Arthur Andersen LLP ("AA") complete its audit of the Company's consolidated
financial statements for the fiscal year ended September 30, 1999 as promptly as
practicable after the date hereof. The Purchaser and the Merger Sub shall be
given reasonable access to the work papers of AA and to the staff of AA
conducting the audit and shall be provided a copy of such audit upon completion.
ARTICLE 7
CONDITIONS
7.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions,
any or all of which may be waived in whole or in part by the parties hereto, to
the extent permitted by applicable law:
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(a) The Merger shall have been approved and adopted by the vote of the
stockholders of the Company to the extent required by the Delaware Law;
(b) All waiting, review and investigation periods (and any extension
thereof) applicable to the consummation of the Merger under the
Hart-Scott-Rodino Act shall have expired or been terminated;
(c) There shall have been no law, statute, rule or order, domestic or
foreign, enacted or promulgated which would make consummation of the Merger
illegal;
(d) No injunction or other order entered by a United States (state or
federal) court of competent jurisdiction shall have been issued and remain in
effect which would prohibit consummation of the Merger; provided, however, that
the parties shall use their reasonable efforts to cause such injunction or order
to be vacated or lifted;
(e) The Purchaser, the Merger Sub or their affiliates shall have
purchased Shares validly tendered and not withdrawn pursuant to the Offer;
provided, however, that neither the Purchaser nor the Merger Sub may invoke this
condition if the Purchaser or the Merger Sub shall have failed to purchase
Shares so tendered and not withdrawn in violation of the terms of this Agreement
or the Offer.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether prior to or after approval by the stockholders of the
Company:
(a) By mutual consent of the Boards of Directors of the Purchaser and
the Company;
(b) By either the Merger Sub or the Company if the Offer shall not have
been consummated on or before 45 business days from the date the Offer is
commenced (the "Termination Date"), provided, however, that a party shall not be
entitled to terminate this Agreement pursuant to this Section 8.1(b) if it is in
material breach of its obligations under this Agreement; provided further, if
the Offer shall not have been consummated on or before the Termination Date
solely as a result of the failure of any waiting, review and investigation
period (and any extension thereof) applicable to the consummation of the Offer
or the Merger under the Hart-Scott-Rodino Act to expire or terminate or failure
to obtain the consents referred to in paragraph (h) of Annex I, the Termination
Date shall, in the sole discretion of the Merger Sub, be extended to a date that
is up to 60 business days from the date the Offer is commenced;
(c) By the Merger Sub if the Board of Directors of the Company shall
have withdrawn or adversely modified (or, upon the written request of the Merger
Sub, failed to
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reaffirm within three business days; provided that no such additional request
may be made during such three business day period) either of its recommendations
referred to in Sections 1.2 and 6.1;
(d) By the Merger Sub if the Offer terminates or expires on account of
the failure of any of the conditions to the Offer set forth in Annex I without
the Merger Sub having purchased any Shares thereunder;
(e) By the Company if any of (i) the Offer shall not have been
commenced substantially in accordance with Section 1.1; or (ii) the Offer shall
have expired or been terminated without any Shares having been purchased
thereunder; or (iii) if a tender offer for Shares is commenced by a person or
entity, or the Company receives an Acquisition Proposal any of which the Board
of Directors determines, in the exercise of its fiduciary duties and subject to
compliance with Section 6.6, makes necessary or advisable the termination of
this Agreement; provided that the provisions of Sections 6.4 and 6.6 shall
survive termination of the Agreement pursuant to this clause (e); or
(f) By the Merger Sub if any action, suit or proceeding is commenced or
overtly threatened against the Purchaser or the Merger Sub or the Company,
before any court or governmental or regulatory authority or body, seeking to
restrain, enjoin, or otherwise prohibit the Offer, the Merger, or the completion
of any of the other transactions contemplated by this Agreement; provided that
the provisions of Section 6.4 and 6.6 shall survive termination of the Agreement
pursuant to this clause (f).
8.2 Amendment. This Agreement may not be amended except by an instrument in
writing approved by the parties to this Agreement and signed on behalf of each
of the parties hereto; provided, however, that after approval of the Merger by
the stockholders of the Company (if such approval is required), no amendment may
be made which changes the amount into which each Share will be converted or
effects any change which would adversely affect the stockholders of the Company
without the further approval of the stockholders of the Company.
8.3 Waiver. Subject to applicable law and the provisions of this Agreement,
at any time prior to the Effective Time, any party hereto may (a) extend the
time for the performance of any of the obligations or other acts of any other
party hereto, (b) waive any inaccuracies in the representations or warranties of
the other party contained herein or in any document, certificate or writing
delivered pursuant hereto or (c) waive compliance with any of the agreements of
any other party or with any conditions to its own obligations, in each case only
to the extent such obligations, agreements and conditions are intended for its
benefit. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law. For the purposes of this Section 8, the Purchaser and the
Merger Sub shall be considered to be a single party.
8.4 Effect of Termination. In the event of termination of this Agreement as
provided in Section 8.1, (a) this Agreement shall become void and there shall be
no liability or further
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obligation on the part of the Purchaser, the Merger Sub or the Company or their
respective stockholders, officers or directors, except as set forth in Section
6.4, in the last sentence of Section 1.2(d) hereof, in the confidentiality
obligations of Section 6.8 hereof and in Sections 6.6, 8.1(e) and 8.1(f) hereof,
and except to the extent that such termination results from the breach by a
party of any of its representations, warranties, covenants or agreements set
forth in this Agreement; provided, further, that if the Purchaser has received
the Fee provided by Section 6.4, the Purchaser shall not assert or pursue in any
manner, directly or indirectly, any claim or cause of action against the Company
or any of its officers or directors based in whole or in part upon its or their
receipt, consideration, recommendation or approval of an Acquisition Proposal or
the exercise of the right of the Company to terminate this Agreement under
Section 8.1(e) provided that the Company complied in all material respects with
Section 6.6 and (b) the Merger Sub shall terminate the Offer, if still pending,
without purchasing any Shares thereunder.
ARTICLE 9
GENERAL PROVISIONS
9.l Public Statements. Except as required by applicable law or by
obligations pursuant to any listing agreement with any national securities
exchange or quotation system, as applicable, neither the Purchaser nor the
Merger Sub, on the one hand, nor the Company, on the other hand, shall make any
public announcement or statement with respect to the Offer, the Merger, this
Agreement or the transactions contemplated hereby, without the approval of the
Company or the Merger Sub, respectively. The parties hereto agree to consult
with each other prior to issuing each public announcement or statement with
respect to the Offer, the Merger, this Agreement or the transactions
contemplated hereby.
9.2 Notices. All notices and other communications hereunder shall be in
writing and sent by hand delivery, facsimile transmission (with confirmation of
receipt), or nationally recognized overnight courier service (with proof of
delivery), to the parties at the addresses set forth below (or at such other
address for a party as shall be specified by like notice):
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(a) if to the Purchaser:
AlliedSignal Inc.
101 Columbia Road
Morristown, New Jersey 07962
Attention: Peter M. Kreindler, Esq.
Senior Vice President and General Counsel
Telephone: (973) 455-2000
Facsimile: (973) 455-6039
(b) if to Merger Sub:
AlliedSignal Acquisition Corp.
c/o AlliedSignal Inc.
2525 West 190th Street
Torrance, California 90504
Attention: Thomas F. Larkins, Esq.
Vice President and General Counsel - Aerospace
Services
Telephone: (310) 512-4809
Facsimile: (310) 512-3987
with copies to:
Fried, Frank, Harris, Shriver & Jacobson
350 South Grand Avenue, 32nd Floor
Los Angeles, CA 90071
Attention: David K. Robbins, Esq.
Telephone: (213) 473-2000
Facsimile: (213) 473-2222
(c) if to the Company:
TriStar Aerospace Co.
2527 Willowbrook Road
Dallas, Texas 75220
Attention: P. Quentin Bourjeaurd
President and Chief Executive Officer
Telephone: (214) 366-5000
Facsimile: (214) 366-5030
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with copies to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Simeon Gold, Esq.
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
9.3 Interpretation. When a reference is made in this Agreement to
subsidiaries of the Merger Sub or the Company, the word "subsidiaries" means any
"majority-owned subsidiary" (as defined in Rule 12b-2 under the Exchange Act) of
the Merger Sub or the Company, as the case may be; provided, however, that the
Company shall in no event and at no time be considered a subsidiary of the
Merger Sub for purposes of this Agreement. As used herein, the term "person"
means an individual, a partnership, a corporation, a limited liability company,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization or other entity. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. References to Sections and Articles
refer to sections and articles of this Agreement unless otherwise stated.
9.4 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants, and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated as long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties shall negotiate
in good faith to modify the Agreement to preserve each party's anticipated
benefits under the Agreement.
9.5 Miscellaneous. This Agreement (together with all other documents and
instruments referred to herein including the Confidentiality Agreement, except
as expressly provided in Section 6.6 hereof): (a) constitutes the entire
agreement and supersedes all other prior agreements and undertakings, both
written and oral, among the parties with respect to the subject matter hereof;
(b) is not intended to confer upon any other person any rights or remedies
hereunder; (c) shall not be assigned by operation of law or otherwise, except
that the Merger Sub may assign all or any portion of their rights under this
Agreement to any direct or indirect wholly-owned subsidiary of the Purchaser,
but no such assignment shall relieve either the Purchaser or the Merger Sub of
their obligations hereunder, and except that this Agreement may be assigned by
operation of law to any corporation with or into which the Merger Sub may be
merged; and (d) shall be governed in all respects, including validity,
interpretation and effect, by the internal laws of the State of Delaware,
without giving effect to the principles of conflict of laws thereof. This
Agreement may be executed in two or more counterparts which together shall
constitute a single agreement.
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9.6 Survival of Representations and Warranties. The representations and
warranties of the parties set forth herein shall be deemed to be continuing as
if made as of the date of any determination hereunder; provided, however, that
such representations and warranties shall terminate as of the Effective Time or
the time the Purchaser or the Merger Sub acquires more than 90% of the then
outstanding Shares, if earlier, or upon the termination of this Agreement
pursuant to Section 8.1.
9.7 Specific Performance. The parties hereto each acknowledge that, in view
of the uniqueness of the subject matter hereof, the parties hereto would not
have an adequate remedy at law for money damages if this Agreement were not
performed in accordance with its terms, and therefore agree that the parties
hereto shall be entitled to specific enforcement of the terms hereof in addition
to any other remedy to which the parties hereto may be entitled at law or in
equity.
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IN WITNESS WHEREOF, the Purchaser, the Merger Sub, and the Company have
caused this Agreement and Plan of Merger to be executed as of the date first
written above by their respective officers thereunder duly authorized.
ALLIEDSIGNAL INC.
By:/s/ James D. Taiclet
---------------------------------------
Name: James D. Taiclet
Its: President - Aerospace Services
ALLIEDSIGNAL ACQUISITION CORP.
By:/s/ Thomas F. Larkins
---------------------------------------
Name: Thomas F. Larkins
Its: Assistant Secretary
TRISTAR AEROSPACE CO.
By:/s/ Quentin Bourjeaurd
---------------------------------------
Name: Quentin Bourjeaurd
Its: President and Chief Executive Officer
<PAGE>
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ANNEX I
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Agreement and Plan of Merger
(the "Agreement") or the Offer, the Merger Sub shall not be required to commence
or continue the Offer or accept for payment, purchase or pay for any Shares
tendered, or may postpone the acceptance, purchase or payment for Shares, or may
amend (to the extent permitted by the Agreement) or terminate the Offer (1) if
the Minimum Condition is not satisfied as of the expiration of the Offer; (2)
any applicable waiting, review and investigation periods under the
Hart-Scott-Rodino Act in respect of the Offer shall not have expired or been
terminated prior to the expiration of the Offer; or (3) if, at any time on or
after October 31, 1999 and prior to the expiration date of the Offer (or, in
respect of paragraph (h), the latest date permitted in accordance with Rule
14d-1(c) of the Securities Exchange Act of 1934, as amended) any of the
following events shall have occurred (each of paragraphs (a) through (h)
providing a separate and independent condition to the Merger Sub's obligations
pursuant to the Offer):
(a) The Company or any subsidiary of the Company, or their respective
Boards of Directors, shall have authorized, recommended or proposed, or shall
have announced an intention to authorize, recommend or propose, or shall have
entered into an agreement or agreement in principle 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 material
change in its capitalization, or the Company's Board of Directors shall have
withdrawn or adversely modified (including by amendment to the Schedule 14D-9),
or upon request of the Merger Sub, failed to reaffirm its favorable
recommendations with respect to the Offer and the Merger as provided in the
Agreement, or any corporation, entity, "group" or "person" (as defined in the
Exchange Act) other than the Purchaser or the Merger Sub, shall have acquired
beneficial ownership of 35% or more of the outstanding Shares;
(b) there shall have been any statute, rule, injunction or other order
promulgated, enacted, entered or enforced by any court or governmental agency or
other regulatory or administrative agency or commission, domestic or foreign
(other than the routine application to the Offer, the Merger or other subsequent
business combination of waiting, review and investigation periods under the
Hart-Scott-Rodino Act), (i) making the purchase of some or all of the Shares
pursuant to the Offer or the Merger illegal, or resulting in a material delay in
the ability of the Merger Sub to purchase some or all of the Shares, (ii)
invalidating or rendering unenforceable any material provision of the Agreement,
(iii) imposing material limitations on the ability of the Merger Sub effectively
to acquire or hold or to exercise full rights of ownership of the Shares
acquired by it, including but not limited to, the right to vote the Shares
purchased by it on all matters properly presented to the stockholders of the
Company, (iv) imposing material limitations on the ability of any of Purchaser,
the Merger Sub, or the Company to continue effectively all or any material
portion of its respective business as heretofore conducted or to continue to own
or operate effectively all or any material portion of its respective assets as
heretofore owned or operated, (v) imposing material limitations on the ability
of the Merger Sub to continue effectively all or any material portion of the
business of the Company and its
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subsidiaries (taken as a whole) as heretofore conducted or to own or operate
effectively all or any material portion of the assets of the Company and its
subsidiaries (taken as a whole) as heretofore operated, or (vi) to the effect
that the Offer or the Merger is violative of any applicable law which would
reasonably be expected to result in any of the consequences described in clauses
(i) through (v) above;
(c) there shall have been any law, statute, rule or regulation, domestic or
foreign, enacted or promulgated that, directly or indirectly, results or may be
anticipated to result in any of the consequences referred to in paragraph (b)
above, or any action, suit or proceeding shall have been commenced before any
court or governmental or regulatory authority or body seeking to restrain,
enjoin or otherwise prohibit the Offer, the Merger, or the completion of the
transactions contemplated by the Agreement;
(d) there shall have occurred (i) any general suspension of, or limitation
on prices for, trading in securities on any national securities exchange or in
the over the counter market in the United States for a period of in excess of
six and one-half trading hours in any twenty-four consecutive hour period
(excluding suspensions resulting solely from physical damage or interference
with such exchanges not related to market conditions), (ii) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) any limitation by any governmental authority on, or any
other event which might materially adversely affect, the extension of credit by
banks or other lending institutions in the United States, or (iv) in the case of
any of the foregoing existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof;
(e) except as set forth in the Commission Filings filed before October 31,
1999 or the Disclosure Schedule, any change shall have occurred or be threatened
which individually or in the aggregate has had or is continuing to have a
Company Material Adverse Effect;
(f) (i) any of the representations and warranties of the Company in the
Agreement shall not be true and correct in all respects as if made on the date
of any determination hereunder except for those representations or warranties
that address matters only as of a specified date or only with respect to a
specified period of time which need only be true and accurate as of such date or
with respect to such period; provided, however, any representation or warranty
not qualified by "material", "Company Material Adverse Effect," a specified
dollar limitation or the like need only be true and correct in all material
respects on the date of any determination hereunder, or (ii) the Company shall
have breached in any respect or shall not have performed in all respects each
covenant and complied with each agreement to be performed and complied with by
it under the Agreement unless the Company gives prompt notice to the Merger Sub
of such breach or nonperformance, such breach or nonperformance is capable of
being fully and completely cured at no more than an inconsequential cost or
expense to the Company or its subsidiaries and such breach or nonperformance is
so cured within three business days following such breach or nonperformance;
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(g) the Company and the Merger Sub shall have reached an agreement or
understanding regarding termination of the Offer or the Agreement shall have
been terminated in accordance with its terms; or
(h) all governmental consents (including consents of foreign governmental
entities) required to be obtained in connection with the purchase of Shares
pursuant to the Offer shall not have been obtained or any governmental agency
shall have announced an intention to seek to prohibit or interfere with the
purchase of Shares pursuant to the Offer;
which, in the good faith judgment of the Merger Sub, in any such case, and
regardless of the circumstances giving rise to any such condition, make it
inadvisable to proceed with acceptance for payment or purchase of or payment for
the Shares.
The foregoing conditions are for the sole benefit of the Merger Sub and
Purchaser and may be asserted by the Merger Sub and Purchaser regardless of the
circumstances giving rise to such conditions, or may be waived by the Merger Sub
in whole at any time or in part from time to time in their sole discretion. The
failure by the Merger Sub or the Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right and may be asserted at any time and from
time to time.
The capitalized terms used in this Annex A shall have the meanings set
forth in the Agreement to which it is annexed.
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================================================================================
TENDER AND OPTION AGREEMENT
among
ALLIEDSIGNAL INC.,
ALLIEDSIGNAL ACQUISITION CORP.
and
THE STOCKHOLDERS LISTED ON SCHEDULE A
Dated as of October 31, 1999
================================================================================
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TENDER AND OPTION AGREEMENT
TENDER AND OPTION AGREEMENT, dated as of October 31, 1999
(this "Agreement"), among AlliedSignal Inc., a Delaware corporation
("Purchaser"), AlliedSignal Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Purchaser ("Merger Sub"), and each of the persons
listed on Schedule A hereto (each a "Stockholder" and, collectively, the
"Stockholders").
RECITALS
WHEREAS, Purchaser, Merger Sub and TriStar Aerospace Co., a
Delaware corporation (the "Company"), have entered into an Agreement and Plan of
Merger dated as of the date hereof (as the same may be amended or supplemented,
the "Merger Agreement") providing for, among other things, an Offer by Merger
Sub for all of the issued and outstanding shares of common stock, par value
$0.01 per share, of the Company (the "Company Common Stock"), and, subsequent
thereto, assuming the Offer is consummated on the terms set forth in the Offer
Documents and all the other conditions to the Merger are satisfied or waived,
the Merger of Merger Sub with and into the Company with the Company as the
surviving corporation in the Merger, pursuant to which the Company will become a
wholly-owned subsidiary of Purchaser;
WHEREAS, each Stockholder is the beneficial owner of the
shares of Company Common Stock and Options set forth opposite such Stockholder's
name on Schedule A hereto (collectively referred to herein as the "Securities"
of such Stockholder; such Securities, as such Securities may be adjusted by
stock dividend, stock split, recapitalization, combination or exchange of
shares, merger, consolidation, reorganization or other change or transaction of
or by the Company, together with shares of Company Common Stock issuable upon
the exercise of Options being referred to herein as the "Shares" of such
Stockholder); and
WHEREAS, as a condition to each of Purchaser and Merger Sub's
willingness to enter into the Merger Agreement, Purchaser and Merger Sub have
requested that the Stockholders enter into, and the Stockholders have agreed to
enter into, this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties agree as follows:
Section 1. Certain Definitions. Capitalized terms used but not
otherwise defined herein have the meanings ascribed to such terms in the Merger
Agreement.
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Section 2. Representations and Warranties of the Stockholders. Each
Stockholder, severally and not jointly, represents and warrants to Purchaser and
Merger Sub, as of the date hereof and as of the Closing (as defined below), as
follows:
(a) The Stockholder is the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of, and has good title to, all of the
Securities set forth opposite such Stockholder's name on Schedule A, free and
clear of any pledge, hypothecation, claim, security interest, charge,
encumbrance, voting trust agreement, interest, option, lien, charge or similar
restriction or limitation, including any restriction on the right to vote, sell
or otherwise dispose of the Securities, other than those arising under the
federal and state securities laws (each, a "Lien"), except as set forth in this
Agreement or in Schedule B hereto or disclosed in the Commission Filings filed
prior to the date hereof.
(b) The Securities constitute all of the securities (as
defined in Section 3(a)(10) of the Exchange Act) of the Company beneficially
owned, directly or indirectly, by the Stockholder.
(c) Except for the Securities, the Stockholder does not,
directly or indirectly, beneficially own or have any option, warrant or other
right to acquire any securities of the Company that are or may by their terms
become entitled to vote or any securities that are convertible or exchangeable
into or exercisable for any securities of the Company that are or may by their
terms become entitled to vote, nor is the Stockholder subject to any contract,
commitment, arrangement, understanding, restriction or relationship (whether or
not legally enforceable), other than this Agreement, that provides for such
Stockholder to vote or acquire any securities of the Company. The Stockholder
holds exclusive power to vote the Company Common Stock set forth opposite its
name on Schedule A, if any, and has not granted a proxy to any other person to
vote any Company Common Stock (including those issuable upon exercise of the
Options), subject to the limitations under applicable securities laws and the
terms set forth in this Agreement.
(d) This Agreement has been duly executed and delivered by the
Stockholder, and assuming the due authorization, execution and delivery thereof
by the other parties hereto, constitutes the legal, valid and binding obligation
of the Stockholder, enforceable against the Stockholder in accordance with its
terms, except as enforcement against the Stockholder may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to creditors rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(e) Neither the execution and delivery of this Agreement nor
the performance by the Stockholder of the Stockholder's obligations hereunder
will conflict with, result in a violation or breach of, or constitute a default
(or an event that, with notice or lapse of time or both, would result in a
default) or give rise to any right of termination, amendment, cancellation, or
acceleration or result in the creation of any Lien on any Shares under, (i) any
contract, commitment, agreement, understanding,
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arrangement or restriction of any kind to which the Stockholder is a party or by
which the Stockholder is bound or (ii) any injunction, judgment, writ, decree,
order or ruling applicable to the Stockholder, except for conflicts, violations,
breaches, defaults, terminations, amendments, cancellations, accelerations or
Liens that would not individually or in the aggregate be expected to prevent or
materially impair or delay the consummation by such Stockholder of the
transactions contemplated hereby.
(f) Neither the execution and delivery of this Agreement nor
the performance by the Stockholder of the Stockholder's obligations hereunder
will violate any Law applicable to the Stockholder or require any order,
consent, authorization or approval of, filing or registration with, or
declaration or notice to, any court, administrative agency or other governmental
body or authority, other than any required notices or filings pursuant to the
Hart-Scott-Rodino Act, foreign antitrust or competition laws or the federal
securities laws.
(g) No investment banker, broker, finder or other intermediary
is, or will be, entitled to a fee or commission from Merger Sub, Purchaser or
the Company in respect of this Agreement based on any arrangement or agreement
made by or on behalf of such Stockholder in this Agreement or otherwise in his
or her capacity as a stockholder of the Company.
(h) The Stockholder understands and acknowledges that
Purchaser is entering into, and causing Merger Sub to enter into, the Merger
Agreement in reliance upon the Stockholder's execution and delivery of this
Agreement.
Section 3. Representations and Warranties of Purchaser and Merger Sub.
Purchaser and Merger Sub each hereby represents and warrants to the Company that
(a)(i) it has full corporate right, power and authority to execute and deliver
this Agreement and to perform all of its obligations hereunder; (ii) such
execution, delivery and performance have been duly authorized by all requisite
corporate action by Parent and Merger Sub, as applicable, and no other corporate
proceedings are necessary therefor; (iii) this Agreement has been duly and
validly executed and delivered by Parent and Merger Sub, as applicable, and
represents a valid and legally binding obligation of Parent and Merger Sub, as
applicable, enforceable against Parent in accordance with its terms; and (iv)
any Company Common Stock acquired by Parent or Merger Sub upon exercise of the
Purchase Option will not be transferred or otherwise disposed of except in
compliance with the Securities Act.
(b) Neither the execution and delivery of this Agreement by
Purchaser or Merger Sub nor the consummation by Purchaser and Merger Sub of the
transactions contemplated hereby shall conflict with or constitute a violation
of or default under any contract, commitment, agreement arrangement or
restriction of any kind to which Purchaser or Merger Sub is a party to or to
which each is bound which would materially
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impair the ability of Purchaser or Merger Sub to purchaser the Shares
beneficially owned by the Stockholder upon exercise of the Purchase Option.
(c) Nether the execution and delivery of this Agreement nor
the performance by Purchaser or Merger Sub of its obligations hereunder will
violate any law applicable to each or require any order, consent, authorization
of approval of, filing or registration with, or declaration or notice to, any
court, administrative agency or other governmental body or authority, other than
any required notices or filings pursuant to the Hart-Scott-Rodino Act, foreign
antitrust or competition laws or the federal securities laws.
Section 4. Transfer of the Shares. During the term of this Agreement,
except as otherwise expressly provided herein, each Stockholder agrees that such
Stockholder will not (a) tender into any tender or exchange offer or otherwise
sell, transfer, pledge, assign, hypothecate or otherwise dispose of (including
by operation of Law), or create any Lien on, any of the Shares, (b) deposit the
Shares into a voting trust, enter into a voting agreement or arrangement with
respect to the Shares or grant any proxy or power of attorney with respect to
the Shares, (c) enter into any contract, option or other arrangement (including
any profit sharing arrangement) or undertaking with respect to the direct or
indirect acquisition or sale, transfer, pledge, assignment, hypothecation or
other disposition of any interest in or the voting of any Shares or any other
securities of the Company, (d) exercise any rights (including, without
limitation, under Section 262 of the Delaware Law) to demand appraisal of any
Shares which may arise with respect to the Merger, or (e) take any other action
that would in any way restrict, limit or interfere with the performance of such
Stockholder's obligations hereunder or the transactions contemplated hereby.
Notwithstanding the foregoing, each Stockholder may transfer Securities to (x)
an affiliate of the Stockholder, (y) any member of the immediate family of the
Stockholder or trusts for the benefit of family members of the Stockholder or
(z) any organizations qualifying under Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended, if and to the extent that any individual or entity
referred to in clauses (x), (y) and (z), agrees to be bound by this Agreement.
Section 5. Adjustments. (a) In the event (i) of any stock dividend,
stock split, recapitalization, reclassification, combination or exchange of
shares of capital stock or other securities of the Company on, of or affecting
the Shares or the like or any other action that would have the effect of
changing a Stockholder's ownership of the Company's capital stock or other
securities or (ii) a Stockholder becomes the beneficial owner of any additional
Shares of or other securities of the Company, then the terms of this Agreement
will apply to the shares of capital stock and other securities of the Company
held by such Stockholder immediately following the effectiveness of the events
described in clause (i) or such Stockholder becoming the beneficial owner
thereof, as described in clause (ii), as though they were Shares hereunder.
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(b) Each Stockholder hereby agrees, while this Agreement is in
effect, to promptly notify Purchaser and Merger Sub of the number of any new
Shares acquired by such Stockholder, if any, after the date hereof.
Section 6. Tender of Shares of Company Common Stock. Each Stockholder
hereby agrees that such Stockholder will validly tender (or cause the record
owner of such shares to validly tender) and sell pursuant to and in accordance
with the terms of the Offer not later than the tenth business day after
commencement of the Offer (or the earlier of the expiration date of the Offer
and the tenth business day after such shares of Company Common Stock are
acquired by such Stockholder if the Stockholder acquires shares of Company
Common Stock after the date hereof), or, if the Stockholder has not received the
Offer Documents by such time, within two business days following receipt of such
documents, all of the then outstanding shares of Company Common Stock
beneficially owned by such Stockholder (including the shares of Company Common
Stock outstanding as of the date hereof and shares of Company Common Stock
issued following the exercise (if any) of the Options, in each case as set forth
on Schedule A hereto opposite such Stockholder's name). Upon the purchase by
Purchaser or Merger Sub of all of such then outstanding shares of Company Common
Stock beneficially owned by such Stockholder pursuant to the Offer in accordance
with this Section 6, this Agreement will terminate as it relates to such
Stockholder. In the event, notwithstanding the provisions of the first sentence
of this Section 6, any shares of Company Common Stock beneficially owned by a
Stockholder are for any reason withdrawn from the Offer or are not purchased
pursuant to the Offer, such shares of Company Common Stock will remain subject
to the terms of this Agreement. Each Stockholder acknowledges that Purchaser's
obligation to accept for payment and pay for the shares of Company Common Stock
tendered in the Offer is subject to all the terms and conditions of the Offer.
Section 7. Voting Agreement. Each Stockholder, by this Agreement, does
hereby (a) agree to appear (or not appear, if requested by Purchaser or Merger
Sub) at any annual, special, postponed or adjourned meeting of the stockholders
of the Company or otherwise cause the shares of Company Common Stock such
Stockholder beneficially owns to be counted as present (or absent, if requested
by Purchaser or Merger Sub) thereat for purposes of establishing a quorum and to
vote or consent, and (b) constitute and appoint Purchaser and Merger Sub, or any
nominee thereof, with full power of substitution, during and for the term of
this Agreement, as his true and lawful attorney and proxy for and in his name,
place and stead, to vote all the shares of Company Common Stock such Stockholder
beneficially owns at the time of such vote, at any annual, special, postponed or
adjourned meeting of the stockholders of the Company (and this appointment will
include the right to sign his or its name (as stockholder) to any consent,
certificate or other document relating to the Company that the laws of the State
of Delaware may require or permit), in the case of both (a) and (b) above, (x)
in favor of approval and adoption of the Merger Agreement and approval and
adoption of the Merger and the other transactions contemplated thereby and (y)
against (1) any Acquisition Proposal (other than the Merger and the other
transactions contemplated thereby), (2) any
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action or agreement that would result in a breach in any respect of any
covenant, agreement, representation or warranty of the Company under the Merger
Agreement and (3) any other action that is intended, or could be expected, to
impede, interfere with, delay, postpone, or adversely affect the Offer, the
Merger and the other transactions contemplated by this Agreement or the Merger
Agreement. This proxy and power of attorney is a proxy and power coupled with an
interest, and each Stockholder declares that it is irrevocable until this
Agreement shall terminate in accordance with its terms. Each Stockholder hereby
revokes all and any other proxies with respect to the Shares that such
Stockholder may have heretofore made or granted. For shares of Company Common
Stock as to which a Stockholder is the beneficial but not the record owner, such
Stockholder shall use his or its best efforts to cause any record owner of such
Shares to grant to Purchaser a proxy to the same effect as that contained
herein. Each Stockholder hereby agrees to permit Purchaser and Merger Sub to
publish and disclose in the Offer Documents and the Proxy Statement and related
filings under the securities laws such Stockholder's identity and ownership of
Shares and the nature of his or its commitments, arrangements and understandings
under this Agreement.
Section 8. No Solicitation. Except as otherwise permitted under Section
26 of this Agreement, each Stockholder agrees that neither such Stockholder nor
any of such Stockholder's representatives, agents or affiliates (including,
without limitation, any investment banker, attorney or accountant retained by
any of them) will directly or indirectly initiate, solicit or encourage
(including by way of furnishing non-public information or assistance), or take
any other action to facilitate, any inquiries or the making or submission of any
Acquisition Proposal, or enter into or maintain or continue discussions or
negotiate with any person or entity in furtherance of such inquiries or to
obtain or induce any person to make or submit an Acquisition Proposal or agree
to or endorse any Acquisition Proposal or assist or participate in, facilitate
or encourage, any effort or attempt by any other person or entity to do or seek
any of the foregoing or authorize or permit any of its representatives, agents
or affiliates or any investment banker, financial advisor, attorney, accountant
or other representative or agent retained by any of them to take any such
action. Each Stockholder shall promptly advise Purchaser in writing of the
receipt of request for information or any inquiries or proposals relating to an
Acquisition Proposal.
Section 9. Grant of Purchase Option. The Stockholder hereby grants to
Purchaser and Merger Sub an irrevocable option (the "Purchase Option") to
purchase for cash at a price (the "Exercise Price") set forth below, in a manner
set forth below, free and clear of all Liens, any or all of the Shares (and
including Shares acquired after the date hereof by such Stockholder)
beneficially owned by the Stockholder, including, without limitation, by
requiring the Stockholder to exercise any or all Options. The Exercise Price for
shares of Company Common Stock shall be equal to the Merger Consideration. In
the event of any stock dividends, stock splits, recapitalizations, combinations,
exchanges of shares or the like, the Exercise Price will be appropriately
adjusted for the purpose of this Section
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9. The amount payable pursuant to this Section 9 shall be subject to all
applicable withholding taxes.
Section 10. Exercise of Purchase Option.
(a) Subject to the conditions set forth in Section 12 hereof,
the Purchase Option may be exercised by Purchaser or Merger Sub, in whole or in
part, at any time or from time to time after the occurrence of any Trigger Event
(as defined below). To the extent known by such Stockholder, each Stockholder
shall notify Purchaser promptly in writing of the occurrence of any Trigger
Event or an event which could lead to a Trigger Event (as provided in Section
6.4 of the Merger Agreement), it being understood that the giving of such notice
by the Stockholder is not a condition to the right of Purchaser or Merger Sub to
exercise the Purchase Option. In the event Purchaser or Merger Sub wishes to
exercise the Purchase Option, Purchaser shall deliver to each Stockholder a
written notice (an "Exercise Notice") specifying the total number of Shares
(including the number of Shares subject to Options to be purchased) it wishes to
purchase from such Stockholder. Each closing of a purchase of Shares (a
"Closing") will occur at a place in Dallas, Texas, on a date and at a time
designated by Purchaser or Merger Sub in an Exercise Notice delivered at least
two business days prior to the date of the Closing. At the request of the
Stockholder following receipt of an Exercise Notice, Parent or Merger Sub shall
advance (an "Advance") to such Stockholder an amount in cash, by wire transfer
of immediately available funds, equal to the aggregate per share exercise price
of the Options pursuant to which the underlying Shares are to be acquired
pursuant to the Exercise Notice (it being understood that Shares subject to
Options to be acquired pursuant to the Exercise Notice will be in the order of
the lowest exercise price to the highest). No Advance shall be made unless the
Stockholder shall have concurrently properly exercised such Options and
delivered irrevocable instructions to the transfer agent of the Company (and
others as may be necessary under the Options) to issue and deliver directly to,
and in the name of, Parent or Merger Sub (as applicable) the Shares to be issued
upon exercise of the Options. The Advance shall be an offset against any
Exercise Price payable to the respective Stockholder at the Closing.
(b) A "Trigger Event" means any one of the following: (i) the
Merger Agreement becomes terminable under circumstances that entitle Purchaser
or Merger Sub to receive the Fee under Section 6.4 of the Merger Agreement
(regardless of whether the Merger Agreement is actually terminated and whether
such Fee is actually paid) or (ii) the Offer is consummated but, due solely to
the failure of the Stockholder to validly tender and not withdraw all of the
then outstanding shares of Company Common Stock beneficially owned by such
Stockholder, the Purchaser has not accepted for payment or paid for all of such
shares of Company Common Stock.
(c) If requested by Purchaser and Merger Sub in the Exercise
Notice, such Stockholder shall exercise and/or convert all Options (to the
extent exercisable and convertible) and other rights (including conversion or
exchange rights), other than Options with exercise or conversion prices above
the Merger Consideration, beneficially
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owned by such Stockholder, and shall, if directed by Purchaser and Merger Sub,
tender the shares of Company Common Stock acquired pursuant to such exercise or
conversion into the Offer or sell such shares of Company Common Stock to
Purchaser or Merger Sub as provided in this Agreement.
Section 11. Termination. This Agreement will terminate (a) pursuant to
Section 6 or (b) upon the earliest of: (i) the Effective Time; (ii) termination
of the Merger Agreement in accordance with its terms other than upon, during the
continuance of, or after, a Trigger Event or an event which could lead to a
Trigger Event (as provided in Section 6.4 of the Merger Agreement); or (iii) 180
days following the earlier of (x) any termination of the Merger Agreement, upon,
during the continuance of or after a Trigger Event or (y) termination of the
Merger Agreement under circumstances that could lead to a Trigger Event (as
provided in Section 6.4 of the Merger Agreement) (or if, at the expiration of
such 180 day period the Purchase Option cannot be exercised by reason of any
applicable judgment, decree, order, injunction, law or regulation, five business
days after such impediment to exercise has been removed or has become final and
not subject to appeal). Upon the giving by Purchaser or Merger Sub to the
Stockholder of the Exercise Notice and the tender of the aggregate Exercise
Price (less all Advances), Purchaser or Merger Sub, as the case may be, will be
deemed to be the holder of record of the Shares transferable upon such exercise,
notwithstanding that the stock transfer books of the Company are then closed or
that certificates representing such Shares have not been actually delivered to
Purchaser. Notwithstanding the termination of this Agreement, Purchaser will be
entitled to purchase the Shares subject to the Purchase Option if it has
exercised the Purchase Option in accordance with the terms hereof prior to the
termination of this Agreement and the termination of this Agreement will not
affect any rights hereunder which by their terms do not terminate or expire
prior to or as of such termination.
Section 12. Conditions To Closing. The obligation of each Stockholder
to sell such Stockholder's Shares to Purchaser or Merger Sub hereunder is
subject to the conditions that (i) all waiting periods, if any, under the
Hart-Scott-Rodino Act, applicable to the sale of the Shares or the acquisition
of the Shares by Purchaser or Merger Sub, as the case may be, hereunder have
expired or have been terminated; (ii) all consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, any court,
administrative agency or other Governmental Entity, if any, required in
connection with the sale of the Shares or the acquisition of the Shares by
Purchaser or Merger Sub hereunder have been obtained or made; and (iii) no
preliminary or permanent injunction or other order by any court of competent
jurisdiction prohibiting or otherwise restraining such sale or acquisition is in
effect.
Section 13. Closing. At any Closing with respect to Shares beneficially
owned by a Stockholder, (a) such Stockholder will deliver to Purchaser, Merger
Sub or their respective designee a certificate or certificates in definitive
form representing the number of the Shares designated by Purchaser or Merger
Sub, as the case may be, in its Exercise
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Notice, free and clear of all Liens, such certificate to be registered in the
name of Purchaser, Merger Sub or their respective designee and (b) Purchaser or
Merger Sub, as the case may be, will deliver to the Stockholder the excess, if
any, of (i) the aggregate Exercise Price for the Shares so designated and being
purchased over (ii) any outstanding Advances by wire transfer of immediately
available funds. If Purchaser or Merger Sub shall require a Stockholder to
exercise Options, the delivery of certificates representing the Shares subject
to such Options shall be made concurrently with the delivery of the Exercise
Price, less any Advances, for the Shares so delivered.
Section 14. Survival of Representations and Warranties. All
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive for twelve months after the termination
hereof. The covenants and agreements made herein will survive in accordance with
their respective terms.
Section 15. Expenses. Except as otherwise provided in the Merger
Agreement, all costs and expenses incurred in connection with this Agreement
shall be paid by the party incurring such expenses.
Section 16. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered the same agreement.
Section 17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to principles of conflicts of laws thereof.
Section 18. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered by hand, mailed by
registered or certified mail (return receipt requested) or sent by prepaid
overnight courier (with proof of service) or confirmed to facsimile to the
parties as follows (or at such other addresses for a party as shall be specified
by like notice) and shall be deemed given on the date on which so
hand-delivered, or sent by confirmed telecopier and on the day after it has been
so mailed or sent by courier:
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To Purchaser or Merger Sub:
(a) Purchaser:
AlliedSignal Inc.
101 Columbia Road
Morristown, New Jersey 07962
Attention: Peter M. Kreindler, Esq.
Fax: (973) 455-6039
(b) Merger Sub:
AlliedSignal Acquisition Corp.
c/o AlliedSignal Inc.
2525 West 190th Street
Torrance, California 90504
Attention: Thomas F. Larkins, Esq.
Fax: (310) 512-3987
with a copy (which shall not constitute notice) to:
Fried, Frank, Harris, Shriver & Jacobson
350 S. Grand Avenue, 32nd Floor
Los Angeles, California 90071
Attention: David K. Robbins, Esq.
Fax: (213) 473-2222
If to a Stockholder, at the address set forth on Schedule A hereto or
to such other address as any party may have furnished to the other parties in
writing in accordance herewith with a copy (which shall not constitute notice)
to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Simeon Gold, Esq.
Fax: (212) 310-8007
Section 19. Miscellaneous.
(a) This Agreement shall not, nor shall any of the rights or
interests hereunder, be assigned by any party hereto or assignable by operation
of law or otherwise without the prior written consent of the other parties
hereto; provided, however, that Purchaser may assign its rights hereunder to an
affiliate, but nothing shall relieve the assignor from its obligations
hereunder. Subject to the preceding sentence, this
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Agreement shall be binding upon and shall inure to the benefit to the parties
hereto and their respective successors and assigns.
(b) The headings contained in this Agreement are for reference
purposes and shall not affect in any way the meaning or interpretation of this
Agreement. In this Agreement, unless the context otherwise requires, words
describing the singular number shall include the plural and vice versa, and
words denoting any gender shall include all genders and words denoting natural
persons shall include corporations and partnerships and vice versa. Whenever the
words "include," "includes" or "including" are used in this Agreement, they
shall be understood to be followed by the words "without limitation."
(c) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity will be
cumulative and not alternative, and the exercise of any thereof by either party
will not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party.
Section 20. Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or unenforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
Section 21. Enforcement of Agreement; Waiver of Jury Trial. (a) The
parties hereto agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with its
specific terms or was otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court, this being in addition to any other remedy to which they are entitled
at law or in equity.
(b) Each of the parties irrevocably and unconditionally
waives, to the fullest extent permitted by applicable law, any and all rights to
trial by jury in connection with any litigation arising out of or relating to
this Agreement.
Section 22. Waiver, Etc. Any provision of this Agreement may be waived
at any time by the party that is entitled to the benefits thereof. No such
waiver, amendment or supplement will be effective unless in writing and signed
by the party or parties sought to be bound thereby. Any waiver by any party of a
breach of any provision of this Agreement will not operate as or be construed to
be a waiver of any other breach of such provision or of any breach of any other
provision of this Agreement. The failure of a party to insist upon strict
adherence to any term of this Agreement or one or more
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sections hereof will not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement.
Section 23. Amendment. This Agreement may not be amended, except by an
instrument in writing signed on behalf of each of the parties.
Section 24. Further Assurances. (a) Each party hereto will execute and
deliver all other documents and instruments and take all other actions that may
be reasonably necessary in order to consummate the transactions provided for by
such exercise.
(b) Each of the Stockholders will execute and deliver all
documents and instruments and take all other actions that may be reasonably
necessary to permit the Purchaser to exercise all rights granted to the
Purchaser by such Stockholder and obtain all benefits contemplated under this
Agreement with respect to the rights granted by such Stockholder.
Section 25. Publicity. A Stockholder shall not issue any press release
or otherwise make any public statements with respect to this Agreement or the
Merger Agreement or the other transactions contemplated hereby or thereby
without the consent of Purchaser and Merger Sub; provided, however, that a
Stockholder may, without the prior consent of Purchaser and Merger Sub, issue a
press release or otherwise make such public statement (i) as may be required by
Law if he has provided Purchaser and Merger Sub with prior written notice, (ii)
as otherwise provided in Section 26 herein, (iii) concerning the status of the
Stockholder as a party to this Agreement, the terms hereof, and its Beneficial
Ownership of the Securities required pursuant to Section 13(d) of the Exchange
Act, or (iv) required in the Proxy Statement.
Section 26. Stockholder Capacity. No person executing this Agreement
makes any agreement or understanding herein in such Stockholder's capacity as a
director or officer of the Company. Each Stockholder signs solely in such
Stockholder's capacity as the beneficial owner of such Stockholder's Shares.
Notwithstanding anything herein to the contrary, nothing herein shall limit or
affect any actions taken by a Stockholder in such Stockholder's capacity as an
officer or director of the Company to the extent specifically permitted by the
Merger Agreement or consistent with his fiduciary duties.
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IN WITNESS WHEREOF, each of the Purchaser and Merger Sub has caused
this Agreement to be signed by its officer or director thereunto duly authorized
and each Stockholder has signed this Agreement, all as of the date first written
above.
ALLIEDSIGNAL INC.
By: /s/ James D. Taiclet
--------------------------------------
Name: James D. Taiclet
Title: President - Aerospace Services
ALLIEDSIGNAL ACQUISITION CORP.
By: /s/ Thomas F. Larkins
--------------------------------------
Name: Thomas F. Larkins
Title: Assistant Secretary
STOCKHOLDERS
/s/ P. Quentin Bourjeaurd
------------------------------------------
P. Quentin Bourjeaurd
/s/ Charles Balchunas
------------------------------------------
Charles Balchunas
<PAGE>
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Stockholder Address Number of Number of
Shares Options
<S> <C> <C> <C>
P. Quentin Bourjeaurd 2527 Willowbrook Rd. 1,459,447 1,534,022
Dallas, Texas 75220
Charles Balchunas 2527 Willowbrook Rd. 136,522 602,276
Dallas, Texas 75220
- --------------------------------------------------------------------------------------------
</TABLE>
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<PAGE>
Schedule B
1. 300,000 shares of Company Common Stock held by P. Quentin Bourjeaurd are
pledged as collateral to Deutsche Bank Alex Brown.
2. 36,512 shares of Company Common Stock held by Charles Balchunas are pledged
to TriStar Aerospace, Inc., a Company subsidiary as collateral for a $75,000
promissory note.
<PAGE>
TriStar Aerospace Co.
2527 Willowbrook Road
Dallas, TX 75220
October 31, 1999
P. Quentin Bourjeaurd
President and Chief Executive Officer
TriStar Aerospace Co.
2527 Willowbrook Road
Dallas, TX 75220
Dear Quentin:
You and TriStar Aerospace Co. (the "Company") hereby agree that this letter
amends your Executive Employment Agreement (the "Agreement"), dated September
19, 1996, in the manner set forth herein. Capitalized terms not defined in this
letter shall have the meanings set forth in the Agreement.
1. To reflect our agreement that, upon termination of your employment by
the Company other than for Cause, you shall continue to receive salary and
benefits as currently provided in Section 5(a) of the Agreement through
September 19, 2001, Section 5(a) of the Agreement is hereby amended and restated
in full as follows:
(a) TERMINATION WITHOUT CAUSE. If, prior to the expiration of the
Term, the Company terminates the employment of the Executive other than for
Cause (as defined herein), the Executive shall continue to receive his
salary set forth in Section 4(a) hereof (and such medical and life
insurance and other benefits as are regularly offered to senior executives
of the Company) until the earlier to occur of (i) the fifth anniversary of
the Commencement Date and (ii) a period of two years from the Date of
Termination (as defined herein).
2. To reflect our agreement that the non-competition covenant contained in
Section 6(a) of the Agreement shall continue to apply through September 19, 2001
under all circumstances, Section 6(a) of the Agreement is hereby amended and
restated in full as follows:
<PAGE>
<PAGE>
(a) NON-COMPETITION. During the Term and through September 19, 2001,
the Executive expressly covenants and agrees that he shall not, without the
express written consent of the Company, for his own account or jointly with
any other person, directly or indirectly, own, manage, operate, join,
control, loan money to, invest in, or otherwise participate in, or be
connected with, or become or act as an officer, employee, consultant,
representative or agent of any business, individual, partnership, firm or
corporation (other than the Company and its subsidiaries and affiliates)
which is in competition with any business in which the Company or any of
its subsidiaries and affiliates are then engaged or planning to be engaged;
PROVIDED, HOWEVER, that the Executive may purchase or own, solely as an
inactive investor, the securities of any entity if (a) such securities are
publicly traded on a nationally-recognized stock exchange or on NASDAQ and
(b) the aggregate holdings of such securities by the Executive and his
immediate family do not exceed three percent (3%) of the voting power or
three percent (3%) of the capital stock of such entity.
You acknowledge that, following the consummation of the transactions
contemplated by the Agreement and Plan of Merger between AlliedSignal Inc. and
the Company, dated October 31, 1999, the AlliedSignal Inc. Hardware Product
Group (but not AlliedSignal Inc. or any of its other divisions, subsidiaries or
affiliates (excluding the Company)) will be an "affiliate" of the Company for
purposes of Section 6(a) of the Agreement.
-2-
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the undersigned acknowledge and agree to the foregoing
amendments to the Agreement and have executed this letter in one or more
counterparts, each of which shall be deemed to be one and the same instrument,
as of the date first written above.
Very truly yours,
TRISTAR AEROSPACE CO.
/s/ Doug Childress
----------------------------------------
By: Doug Childress
Its: Executive Vice President and Chief
Financial Officer
Agreed and accepted this
31st day of October, 1999.
/s/ P. Quentin Bourjeaurd
- ---------------------------
P. Quentin Bourjeaurd
-3-
<PAGE>
CONFIDENTIALITY AGREEMENT
This Confidentiality Agreement (the "Agreement") is made and entered into
as of April 5, 1999 by and between AlliedSignal Inc., a Delaware corporation
acting through its Hardware Product Group business located in Phoenix, Arizona
("AlliedSignal"), and TriStar Aerospace Co., a Delaware corporation
headquartered in Dallas, Texas ("TriStar" and with AlliedSignal collectively,
the "Parties" and individually, each a "Party").
RECITALS
WHEREAS, the Parties have or may become engaged in discussions regarding
the possible acquisition of TriStar's business (the "Business") by AlliedSignal
(a "Possible Transaction");
WHEREAS, in order for AlliedSignal to evaluate the Business and for each
Party to evaluate the desirability of a Possible Transaction (the "Evaluation"),
the Parties anticipate the need to disclose to and to receive from each other
information which the disclosing Party considers to be confidential; and
WHEREAS, each Party desires to preserve the secrecy of such information
that it has provided to the other regarding itself, its business and other
matters.
NOW THEREFORE, in consideration of the foregoing premises and of the
covenants, terms and conditions contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, AlliedSignal and TriStar do hereby mutually agree as follows:
AGREEMENT
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings hereby ascribed to them:
(a) "Confidential Material" refers to written or other permanent
material delivered to the receiving Party or its Representatives by the
disclosing Party or its Representatives in connection with the Evaluation. Any
information that is not in written or other permanent form when disclosed shall
be considered Confidential Material only to the extent the disclosing Party
identifies the material as Confidential Material at the time of original
disclosure and delivers to the other Party within thirty (30) days a written
summary that identifies the Confidential Information. The term "Confidential
Material" also includes without limitation analyses, notes, compilations,
studies and other documents prepared by or for the receiving Party or its
Representatives on the basis of material that is otherwise Confidential
Material. The term "Confidential Material" does not include information that (i)
becomes generally available to the public other than as a result of a disclosure
by the receiving Party, (ii) was available to the receiving Party or any other
Person on a non-confidential basis prior to its disclosure to the receiving
Party by or on behalf of the disclosing Party, (iii) subsequent to its
disclosure to the
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receiving Party by or on behalf of the disclosing Party becomes available to the
receiving Party on a non-confidential basis from a source other than the
disclosing Party or its Representatives, provided that such source is not
prohibited from disclosing such information to the receiving Party by a
contractual, legal or fiduciary obligation to the disclosing Party or (iv) is
subsequently developed independently by an individual affiliated with the
receiving Party who had no access to the Confidential Material.
(b) "Evaluation Period" means the period commencing on the date
hereof and ending on the earlier date on which (i) the Parties execute a
Definitive Agreement (defined below) or (ii) a Party notifies the other Party
(as it is required to do under the terms of this Agreement) that it has decided
not to proceed with the Evaluation of a Possible Transaction.
(c) "Person" means any natural person, corporation, company,
partnership, association, trust, estate, or other entity or organization, the
media, and any governmental representative, agency or authority.
(d) "Representatives" means the directors, officers, employees,
advisors and representatives of a Person.
(e) "Transaction Information" means any information as to or
concerning (i) whether the Evaluation is taking place or the status of such
Evaluation, (ii) whether discussions or negotiations concerning a Possible
Transaction are taking place or the status of any such discussions or
negotiations or (iii) any of the terms, conditions or other facts (not
themselves being Confidential Material) with respect to the Evaluation, a
Possible Transaction or, if entered, the Definitive Agreement.
2. PROTECTION AND USE OF CONFIDENTIAL MATERIAL.
(a) Each of the Parties will provide to the other such Confidential
Material as such disclosing Party determines to be required for the purpose of
the Evaluation. By accepting such material, the receiving Party agrees that it
will use the Confidential Material only for the purpose of the Evaluation and,
during the Evaluation Period and for a period of two (2) years thereafter, will
keep all of such disclosing Party's Confidential Material confidential;
provided, however, that Confidential Material and the contents thereof may be
disclosed to Representatives of the receiving Party who need to know such
information for the purpose of the Evaluation.
(b) Each Party agrees that it will take all reasonable precautions to
ensure that none of its Representatives makes any disclosure of Confidential
Material other than as contemplated herein. Such precautions shall include
without limitation making aware such Representatives of the terms of this
Agreement in advance of such disclosure. Each Party shall be responsible for any
breach of this Agreement by any of its Representatives.
(c) Each Party agrees to exercise its reasonable best efforts to
identify all Confidential Material provided to the other. Identifying
Confidential Material provided in
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tangible form may include without limitation clearly labeling "Confidential" or
"Proprietary" or the equivalent on such material and identifying Confidential
Material disclosed orally at the time of such disclosure.
3. NONDISCLOSURE OF TRANSACTION INFORMATION. During the Evaluation
Period and for a period of one (1) year thereafter, except as may be required by
applicable law or regulation (and, where practicable, after reasonable prior
consultation with the other Party), including without limitation regulations of
an established national or regional securities exchange of the United States on
which the applicable Party's securities are traded, neither AlliedSignal nor
TriStar will, without the prior written consent of the other, disclose any
Transaction Information to any Person, including without limitation in any press
release, disclosure document, governmental filing or other public document or
medium.
4. DISCLOSURE OF CONFIDENTIAL MATERIAL WHEN REQUIRED BY LAW. If
AlliedSignal or TriStar is, on the advise of its legal counsel, required by
applicable law to disclose any Confidential Material to any Person, such Party
may disclose such Confidential Material, only to the extent so required,
provided it shall (i) exercise reasonable efforts, where such applicable law so
permits, to obtain reasonable assurance that such Confidential Material shall be
accorded confidential treatment by the Person to whom it is disclosed and (ii)
provide the disclosing Party, where reasonably practicable, with notice of such
disclosure reasonably in advance thereof so that the disclosing Party may seek a
protective order or other appropriate remedy or waive compliance with this
Agreement. In the event that such protective order or other remedy is not
obtained and the receiving Party has otherwise complied with the provisions of
this Section, the Parties agree that such disclosure may be made without
liability hereunder.
5. NOTIFICATION NOT TO PROCEED; RETURN OR DESTRUCTION OF CONFIDENTIAL
MATERIAL.
(a) If a Party decides it does not desire to proceed with the
Evaluation or discussions regarding a Possible Transaction, it shall promptly
notify in writing the other Party of that decision.
(b) AlliedSignal will promptly upon the request of TriStar, received
within ninety (90) days after the expiration of the Evaluation Period (a
"TriStar Request"), either destroy the Confidential Material of TriStar
delivered to it, and provide TriStar with an officer's certificate regarding
such destruction, or deliver such Confidential Material to TriStar, without
retaining any copy thereof. If no TriStar Request is received during such
period, AlliedSignal may retain or destroy such Confidential Material of TriStar
at its discretion , but in either case such Confidential Material will continue
to be subject to the terms of this Agreement.
(c) TriStar will promptly upon the request of AlliedSignal, received
within ninety (90) days after the expiration of the Evaluation Period (an
"AlliedSignal Request"), either destroy the Confidential Material of
AlliedSignal delivered to it, and provide AlliedSignal with an officer's
certificate regarding such destruction, or deliver such Confidential Material to
AlliedSignal, without retaining any copy thereof. If no AlliedSignal Request is
received during
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such period, TriStar may retain or destroy such Confidential Material at its
discretion, but in either case such Confidential Material will continue to be
subject to the terms of this Agreement.
6. NO OBLIGATION TO EFFECT A POSSIBLE TRANSACTION. No contract or
agreement providing for a Possible Transaction shall be deemed to exist between
AlliedSignal and TriStar unless and until a definitive and binding agreement
setting forth the mutually agreed terms of such a Possible Transaction (a
"Definitive Agreement") shall have been executed and delivered, and each of
AlliedSignal and TriStar hereby waives all claims (including, without
limitation, breach of contract) in connection with such a transaction unless and
until AlliedSignal and TriStar shall have entered into a Definitive Agreement.
Unless and until a Definitive Agreement shall have been executed and delivered,
neither Party has any legal obligation of any kind whatsoever with respect to
any transaction in connection with a Possible Transaction by virtue of this
Agreement or any other written or oral expression with respect to such
transaction except, in the case of this Agreement, for the matters specifically
agreed to herein.
7. CONTACTS. For a period of eighteen (18) months from the date hereof,
except with the express permission of the other Party, neither Party shall
initiate or maintain contact (except for those contacts made in the ordinary
course of business or, as permitted hereunder, in connection with the Evaluation
and/or the Possible Transaction) with any stockholder, officer, director,
employee, representative, agent or trade creditor of the other Party with
respect to such Party or its respective business or affairs. It is understood
that all requests for information, tours and meetings and all questions relating
to the procedures in making a proposal and all communications by AlliedSignal or
its Representatives with TriStar regarding the Possible Transaction will be
directed to Mr. Quentin Bourjeaurd, as agent for TriStar, or such other person
or persons designated by Mr. Bourjeaurd. It is understood that all
communications by TriStar or its Representatives with AlliedSignal regarding the
Possible Transaction will be directed to a person or persons to be designated in
writing by AlliedSignal. TriStar shall be free to conduct the process for any
Possible Transaction as it in its sole discretion shall determine and to change
such process (including any previously announced rules or procedure) at any time
without notice to AlliedSignal, and none of TriStar or any of its stockholders,
officers, directors, employees, representatives, agents or affiliates, shall
have any liability to AlliedSignal as a result of such process or change in
procedure.
8. NO REPRESENTATIONS OR WARRANTIES. Although each Party shall use its
best efforts to include in the Confidential Material delivered to the other
Party hereunder information which it believes to be relevant for the purpose of
the Evaluation, each Party understands and acknowledges that neither the other
Party nor any of its affiliates is making any representation or warranty,
express or implied, as to the accuracy or completeness of the Confidential
Material. Only those particular representations and warranties, if any, that are
made in a Definitive Agreement when, as, and if it is executed, and subject to
such limitations and restrictions as may be specified in such Definitive
Agreement, will have any legal effect.
9. FEDERAL SECURITIES LAWS. Each Party acknowledges that it is aware,
and will advise its respective Representatives who are informed as to the
matters which are the subject hereof, that by receiving any of the Confidential
Material (i) it will receive material non-
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public information about the other Party pursuant to the terms hereof and (ii)
there exist federal and state securities laws that may restrict or eliminate the
recipient's ability to sell or purchase securities of or claims against the
other Party. Each Party hereby agrees to fully comply with all federal and state
securities laws.
10. STANDSTILL PROVISION. AlliedSignal agrees that for a period of
eighteen months from the date hereof, it will not, without the prior consent of
the Board of Directors of TriStar or its designee, directly or indirectly, in
any manner:
(a) acquire, offer or propose to acquire, solicit an offer to sell or
agree to acquire, directly or indirectly, alone or in concert with others, by
purchase or otherwise, any voting securities of TriStar;
(b) make, or in any way participate in, directly or indirectly, alone
or in concert with others, any "solicitation" of "proxies" to vote (as such
terms are used in the proxy rules of the Securities and Exchange Commission
promulgated pursuant to Section 14 of the Securities Exchange Act of 1934, as
amended), or seek to advise or influence in any manner whatsoever any Person
with respect to the voting of any voting securities of TriStar;
(c) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934) with respect
to any voting securities of TriStar or any of its subsidiaries;
(d) acquire, offer to acquire or agree to acquire, directly or
indirectly, alone or in concert with others, by purchase or otherwise, (i) any
of the assets, tangible and intangible, of TriStar or (ii) direct or indirect
rights or options to acquire any assets of TriStar or any of its subsidiaries or
affiliates, except for such assets as are then being offered for sale by TriStar
or any of its subsidiaries or affiliates;
(e) arrange, or in any way participate, directly or indirectly, in
any financing for the purchase of any voting securities of TriStar or any of its
subsidiaries;
(f) otherwise act, alone or in concert with others, to seek to
propose to TriStar or any of its subsidiaries or affiliates or any of their
respective stockholders any merger, business combination, restructuring,
recapitalization or other transaction involving TriStar to or with you to
otherwise seek, alone or in concert with others, to control, change or influence
the management, board of directors or policies of TriStar or any of its
subsidiaries or affiliates;
(g) make any request or proposal to amend, waive or terminate any
provision of this Section 10 or take any initiative with respect to TriStar or
any of its subsidiaries which could require TriStar to make a public
announcement regarding any such prohibited initiative referred to above; or
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(h) announce an intention to do, or enter into any arrangement or
understanding with others to do, any of the actions restricted or prohibited
under clauses (a) through (g) of this Section 10.
This Section 10 shall not apply to purchases of the securities of TriStar by the
AlliedSignal Master Pension Trust or its representatives or agents, or by any
similar benefit plan investment vehicle of AlliedSignal or its affiliates,
provided that (i) any such purchases shall be for investment only, in the
ordinary course of business, and (ii) those entities have not been furnished
with Confidential Information. TriStar's rights under this Section 10 may not be
assigned without the express prior written consent of AlliedSignal and such
rights shall not inure to the benefit of any corporate successor of TriStar
(except in connection with a corporate reorganization not involving a change in
ownership).
11. INJUNCTIVE RELIEF. In the event of any breach of the provisions of
this Agreement, each Party hereby agrees that money damages might not be a
sufficient remedy, and the non-breaching Party may be entitled to equitable
relief, including injunctions and orders for specific performance, in addition
to all other remedies available to the Company at law or in equity.
12. MISCELLANEOUS.
(a) Each Party acknowledges and agrees that nothing in this Agreement
shall create any legal relationship of any kind by or between the Parties nor
shall this Agreement be construed as granting or conferring any rights, such as
title, license or otherwise, in any Confidential Material disclosed or under any
patent, trademark, or copyright that is now or subsequently owned by the
disclosing Party, nor shall the disclosure of Confidential Material constitute
any representation with respect to the non-infringement of patents, trademarks,
copyrights, or any other rights of third parties.
(b) It is understood and agreed that each Party may proceed
independently of the other to develop, distribute and/or implement products
and/or business strategies competitive with the other's; provided, that each
Party shall use the other Party's Confidential Information solely for the
purpose of the Evaluation.
(c) Whether or not the Parties enter into a Possible Transaction,
each will bear its own expenses incurred in connection with the Evaluation.
(d) Neither Party shall, for a period of eighteen (18) months from
the date hereof, directly or indirectly solicit for employment or consulting any
executive or management level person employed as of the date hereof by the other
Party who is identified as a result of the Evaluation as long as that employee
is so employed; provided, however, that "directly or indirectly solicit" as used
in this subsection shall not include any general advertisement or general
solicitation made in the ordinary course of a Party's business.
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(e) No failure or delay by either Party in exercising any right,
power or privilege hereunder will operate as a waiver thereof, nor will any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder. This
Agreement can only be modified or waived in writing, signed by each of the
Parties hereto.
(f) This Agreement may be executed in any number of separate
counterparts, each of which shall, collectively and separately, constitute one
agreement.
(g) If any provision of this Agreement is found to violate any
statute, regulation, rules or order or decree of any governmental authority,
court, agency or exchange, such invalidity shall not be deemed to affect any
other provision hereof or the validity of the remainder of this Agreement, and
such invalid provision shall be deemed deleted herefrom to the minimum extent
necessary to cure such violation.
(h) This Agreement shall be governed and construed in accordance with
the internal laws of the State of Delaware, without giving effect to the choice
of law or conflicts of law principles of such State.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed and in effect as of the day and year first above written.
<TABLE>
<S> <C>
ALLIEDSIGNAL INC. TRISTAR AEROSPACE CO.
By: /s/ Thomas J. Schmidt By: /s/ Quentin Bourjeaurd
------------------------ -------------------------
Name: Thomas J. Schmidt Name: Quentin Bourjeaurd
Title: VPGM -- AlliedSignal HPG Title: Chairman of the Board, President and
Chief Executive Officer
</TABLE>
7
