<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
------------------------
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
(NAME OF SUBJECT COMPANY)
HORIZON ACQUISITION, INC.
DOREL INDUSTRIES INC.
(BIDDER)
------------------------
COMMON STOCK, $1.00 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
------------------------
03070M 10 0
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
MARTIN SCHWARTZ
PRESIDENT AND CHIEF EXECUTIVE OFFICER
DOREL INDUSTRIES INC.
4750 BOULEVARD DES GRANDES PRAIRIES
ST. LEONARD, QUEBEC, CANADA
H1R 2A3
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
------------------------
COPY TO:
BRUCE CZACHOR, ESQ.
SHEARMAN & STERLING
SUITE 4405, COMMERCE COURT WEST
199 BAY STREET
TORONTO, ONTARIO, CANADA
M5L 1E8
TELEPHONE: (416) 360-8484
MARCH 27, 1998
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
CALCULATION OF FILING FEE
================================================================================
TRANSACTION VALUATION AMOUNT OF FILING FEE
--------------------- --------------------
$42,248,700(1) $8,450.00
(1) Estimated for purposes of calculating the filing fee only. This amount
assumes the purchase of 4,349,606 shares of Ameriwood Industries
International Corporation common stock, including the associated common
share purchase rights ("Shares"), which are outstanding at $9.625 per Share,
and 176,625 Shares which are subject to outstanding options, at $9.625 per
Share less the exercise price of such options. The amount of the filing fee,
calculated in accordance with Rule 0-11(d) under the Securities Exchange Act
of 1934, as amended, equals 1/50 of one percent of the value of the Shares
to be purchased.
[ ] 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 1 of 10 Pages Exhibit Index on Page 10
<PAGE> 2
SCHEDULE 14D-1 AND 13D
- --------------------- -----------------------
CUSIP NO. 03070M 10 0 PAGE 2 OF 10 PAGES
- --------------------- -----------------------
- ---------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS: DOREL INDUSTRIES INC.
I.R.S. IDENTIFICATION NUMBER: N/A
- ---------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [ ]
(B) [ ]
- ---------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------
4 SOURCE OF FUNDS:
BK
- ---------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) or 2(E): [ ]
- ---------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION:
PROVINCE OF QUEBEC, CANADA
- ---------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON:
*
- ---------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES: [ ]
- ---------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7):
5.88%*
- ---------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON:
HC AND CO
- ---------------------------------------------------------------------------
- ---------------
* On March 27, 1998, Dorel Industries Inc., a Quebec, Canada corporation
("Parent"), and Horizon Acquisition, Inc., a Delaware corporation and an
indirect wholly-owned subsidiary of Parent ("Purchaser"), entered into Tender
and Option Agreements (the "Tender Agreements") with each of Neil L. Diver,
Chairman of the Board of Directors of Ameriwood Industries International
Corporation (the "Company"), and Kevin K. Coyne and Edwin Wachtel, each a
member of the Board of Directors of the Company (collectively, the "Director
Shareholders"), who own of record an aggregate of 255,717 shares, or
approximately 5.88% of the shares of Common Stock of the Company outstanding
on March 27, 1998, pursuant to which the Director Shareholders agreed, among
other things and upon the terms and conditions set forth therein, to tender
such shares in the Offer (as defined herein), to grant an option on such
shares at the Offer Price (as defined herein) to the Purchaser, to vote such
shares in the manner specified in the Tender Agreements with respect to
certain matters and to appoint Parent as the Director Shareholders' proxy to
vote such shares in certain circumstances. The Tender Agreements are described
more fully in Section 11 of the Offer to Purchase dated April 3, 1998.
<PAGE> 3
SCHEDULE 14D-1 AND 13D
- --------------------- ----------------------
CUSIP NO. 03070M 10 0 PAGE 3 OF 10 PAGES
- --------------------- ----------------------
- ---------------------------------------------------------------------------
1 NAME OF REPORTING PERSON:
HORIZON ACQUISITION, INC.,
I.R.S. IDENTIFICATION NUMBER: APPLIED FOR
- ---------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (A) [ ]
(B) [ ]
- ---------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------
4 SOURCE OF FUNDS:
AF
- ---------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(E) or 2(F): [ ]
- ---------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION:
STATE OF DELAWARE
- ---------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON:
*
- ---------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES: [ ]
- ---------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED TO AMOUNT IN ROW (7):
5.88%*
- ---------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON:
CO
- ---------------------------------------------------------------------------
- ---------------
* The footnote on page 2 is incorporated by reference herein.
<PAGE> 4
SCHEDULE 14D-1 AND 13D
- --------------------- ------------------
CUSIP NO. 03070M 10 0 PAGE 4 OF 10 PAGES
- --------------------- ------------------
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by the Purchaser, an indirect wholly-owned subsidiary of Parent, to
purchase all outstanding Shares of the Company, at a price of $9.625 per Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Purchaser's Offer to Purchase dated April 3, 1998 (the "Offer to
Purchase") and in the related Letter of Transmittal (which together constitute
the "Offer"), copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Ameriwood Industries International
Corporation, a Michigan corporation, which has its principal executive offices
at 168 Louis Campau Promenade, Suite 400, Grand Rapids, MI 49503.
(b) The class of equity securities being sought is all the outstanding
shares of Common Stock, par value $1.00 per share, of the Company. 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 concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market set forth in Section 6, "Price Range of Shares; Dividends on the Shares"
of the Offer to Purchase are incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) The information concerning the name, state or other place
of organization, principal business and address of the principal office of each
of the Purchaser and Parent, and the information concerning the name, business
address, present principal occupation or employment and the name, principal
business and address of any corporation or other organization in which such
employment or occupation is conducted, material occupations, positions, offices
or employments during the last five years and citizenship of each of the
executive officers and directors of the Purchaser and Parent are set forth in
the "Introduction", Section 9, "Certain Information Concerning the Purchaser and
Parent" and Schedule I of the Offer to Purchase and are incorporated herein by
reference.
<PAGE> 5
SCHEDULE 14D-1 AND 13D
- --------------------- ------------------
CUSIP NO. 03070M 10 0 PAGE 5 OF 10 PAGES
- --------------------- ------------------
(e) and (f) During the last five years, none of the Purchaser or Parent,
and, to the best knowledge of the Purchaser and Parent, none of the persons
listed in Schedule I of the Offer to Purchase has been (i) convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) 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)(1) The information set forth in Section 9, "Certain Information
Concerning the Purchaser and Parent" and Section 11, "Background of the Offer;
Contacts with the Company; the Merger Agreement and Related Agreements" of the
Offer to Purchase is incorporated herein by reference. Except as described
therein, neither the Purchaser nor Parent, nor to the best of the knowledge of
the Purchaser and Parent, any of the persons listed in Schedule I of the Offer
to Purchase, has entered into any transaction with the Company, or any of the
Company's affiliates which are corporations, since the commencement of the
Company's third full fiscal year preceding the date of this Statement, the
aggregate amount of which was equal to or greater than one percent of the
consolidated revenues of the Company for (i) the fiscal year in which such
transaction occurred, or (ii) the portion of the current fiscal year which has
occurred if the transaction occurred in such year.
(a)(2) The information set forth in Section 9, "Certain Information
Concerning the Purchaser and Parent" of the Offer to Purchase is incorporated
herein by reference. Except as described therein, neither the Purchaser nor
Parent, nor to the best of the knowledge of the Purchaser and Parent, any of the
persons listed in Schedule I of the Offer to Purchase, has entered into any
transaction since the commencement of the Company's third full fiscal year
preceding the date of this Statement, with the executive officers, directors or
affiliates of the Company which are not corporations, in which the aggregate
amount involved in such transaction or in a series of similar transactions,
including all periodic installments in the case of any lease or other agreement
providing for periodic payments or installments, exceeded $40,000.
(b) The information set forth in the "Introduction", Section 8, "Certain
Information Concerning the Company", Section 9, "Certain Information Concerning
the Purchaser and Parent", Section 11, "Background of the Offer; Contacts with
the Company; the Merger Agreement and Related Agreements" and Section 12,
"Purpose of the Offer; Plans for the Company After the Offer and the Merger" of
the Offer to Purchase is incorporated herein by reference.
<PAGE> 6
SCHEDULE 14D-1 AND 13D
- --------------------- ------------------
CUSIP NO. 03070M 10 0 PAGE 6 OF 10 PAGES
- --------------------- ------------------
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 10, "Source and Amount of
Funds" and Section 12, "Purpose of the Offer and the Merger; Plans for the
Company After the Offer and the Merger" of the Offer to Purchase is incorporated
herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the "Introduction", Section 11,
"Background of the Offer; Contacts with the Company; the Merger Agreement and
Related Agreements" and Section 12, "Purpose of the Offer; Plans for the Company
After the Offer and the Merger" of the Offer to Purchase is incorporated herein
by reference.
(f) and (g) The information set forth in Section 7, "Effect of the Offer on
the Market for Shares, Exchange Listing and Exchange Act Registration" of the
Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in Section 9, "Certain Information
Concerning the Purchaser and Parent" of the Offer to Purchase is incorporated
herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the "Introduction", Section 9, "Certain
Information Concerning the Purchaser and Parent", Section 11, "Background of the
Offer; Contacts with the Company; the Merger Agreement and Related Agreements"
and Section 12, "Purpose of the Offer; Plans for the Company After the Offer and
the Merger" of the Offer to Purchase is incorporated herein by reference.
<PAGE> 7
SCHEDULE 14D-1 AND 13D
- --------------------- ------------------
CUSIP NO. 03070M 10 0 PAGE 7 OF 10 PAGES
- --------------------- ------------------
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the "Introduction" and Section 16, "Fees and
Expenses" of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9, "Certain Information Concerning the
Purchaser and Parent" of the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in the "Introduction," Section 11,
"Background of the Offer, Contacts with the Company; the Merger Agreement and
Related Agreements," and Section 12, "Purpose of the Offer; Plans for the
Company After the Offer and the Merger" of the Offer to Purchase is incorporated
herein by reference. Except as described therein, there are no present or
proposed material contracts, arrangements, understandings or relationships
between the Purchaser or Parent, or to the best of the knowledge of the
Purchaser and Parent, any of the persons listed in Schedule I of the Offer to
Purchase, and the Company, or any of its executive officers, directors,
controlling persons or subsidiaries.
(b) and (c) The information set forth in Section 15, "Certain Legal
Matters" of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7, "Effect of the Offer on the
Market for the Shares; Stock Listing; Exchange Act Registration; Margin
Regulations," and Section 15, "Certain Legal Matters" of the Offer to Purchase
is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, to the extent not otherwise incorporated herein by reference, is
incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
(a)(1) Offer to Purchase dated April 3, 1998.
(a)(2) Letter of Transmittal with respect to the Shares.
(a)(3) Notice of Guaranteed Delivery with respect to the Shares.
(a)(4) Letter, dated April 3, 1998, from Innisfree M&A Incorporated
to Brokers, Dealers, Banks, Trust Companies and Other
Nominees.
(a)(5) Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees to Clients.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Form of Summary Advertisement dated April 3, 1998.
(a)(8) Press Release jointly issued by Parent and the Company on
March 30, 1998.
(b)(1) Commitment letters regarding financing between Parent and
Teachers Insurance Annuity Association and Prudential
Capital Corp.
(b)(2) Term Sheet executed by Parent, Dorel Investment L.P. and
Royal Bank of Canada regarding unsecured guaranteed
revolving credit facility.
(c)(1) Agreement and Plan of Merger, dated as of March 27, 1998,
among Parent, the Purchaser and the Company.
(c)(2) Form of Tender and Option Agreement, dated as of March 27,
1998, among Parent, the Purchaser and certain shareholders
of the Company.
(c)(3) Confidentiality Agreement, dated November 25, 1997, by and
between Parent and the Company.
</TABLE>
<PAGE> 8
SCHEDULE 14D-1 AND 13D
- --------------------- ------------------
CUSIP NO. 03070M 10 0 PAGE 8 OF 10 PAGES
- --------------------- ------------------
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
HORIZON ACQUISITION, INC.
By: /s/ JEFFREY SCHWARTZ
------------------------------------
Name: Jeffrey Schwartz
Title: Vice President, Treasurer and
Assistant Secretary
Date: April 3, 1998
<PAGE> 9
SCHEDULE 14D-1 AND 13D
- --------------------- ------------------
CUSIP NO. 03070M 10 0 PAGE 9 OF 10 PAGES
- --------------------- ------------------
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
DOREL INDUSTRIES INC.
By: /s/ JEFFREY SCHWARTZ
------------------------------------
Name: Jeffrey Schwartz
Title: Vice-President, Finance and
Secretary
Date: April 3, 1998
<PAGE> 10
SCHEDULE 14D-1 AND 13D
- --------------------- -------------------
CUSIP NO. 03070M 10 0 PAGE 10 OF 10 PAGES
- --------------------- -------------------
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. PAGE IN SEQUENTIAL NUMBERING SYSTEM
- ------- -----------------------------------
<S> <C> <C>
(a)(1) Offer to Purchase dated April 3, 1998.......................
(a)(2) Letter of Transmittal with respect to the Shares............
(a)(3) Notice of Guaranteed Delivery with respect to the Shares....
(a)(4) Letter dated April 3, 1998, from Innisfree M&A Incorporated
to Brokers, Dealers, Banks, Trust Companies and Other
Nominees....................................................
(a)(5) Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees to Clients...........................
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9...............................
(a)(7) Form of Summary Advertisement Dated April 3, 1998...........
(a)(8) Press Release jointly issued by Parent and the Company on
March 30, 1998..............................................
(b)(1) Commitment letters regarding financing between Parent and
Teachers Insurance Annuity Association and Prudential
Capital Corp................................................
(b)(2) Term Sheet executed by Parent, Dorel Investment L.P. and
Royal Bank of Canada regarding unsecured guaranteed
revolving credit facility...................................
(c)(1) Agreement and Plan of Merger, dated as of March 27, 1998,
among Parent, the Purchaser and the Company.................
(c)(2) Form of Tender and Option Agreement, dated as March 27,
1998, among Parent, the Purchaser and certain shareholders
of the Company..............................................
(c)(3) Confidentiality Agreement, dated November 25, 1997, by and
between Parent and the Company..............................
</TABLE>
<PAGE> 1
EXHIBIT (A)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
BY
HORIZON ACQUISITION, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
DOREL INDUSTRIES INC.
AT
$9.625 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, APRIL 30, 1998, UNLESS THE OFFER IS EXTENDED
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH, WHEN ADDED TO SHARES ALREADY OWNED BY HORIZON ACQUISITION, INC.
AND DOREL INDUSTRIES INC., REPRESENTS AT LEAST A MAJORITY OF THE SHARES
OUTSTANDING ON A FULLY DILUTED BASIS. THE OFFER IS ALSO SUBJECT TO OTHER TERMS
AND CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTION 14.
THE BOARD OF DIRECTORS OF AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
UNANIMOUSLY HAS DETERMINED THAT EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND
IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF AMERIWOOD INDUSTRIES INTERNATIONAL
CORPORATION, AND RECOMMENDS THAT SUCH SHAREHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
------------------------
IMPORTANT
Any shareholder desiring to tender all or any portion of his Shares should
either (1) complete and sign the Letter of Transmittal (or a facsimile thereof)
in accordance with the instructions in the Letter of Transmittal and mail or
deliver it together with the certificate(s) evidencing tendered Shares, and any
other required documents, to the Depositary or tender such Shares pursuant to
the procedure for book-entry transfer set forth in Section 2 or (2) request his
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for him. Any shareholder whose Shares are registered in the name of
a broker, dealer, commercial bank, trust company or other nominee must contact
such broker, dealer, commercial bank, trust company or other nominee if he
desires to tender such Shares.
A shareholder who desires to tender Shares and whose certificates
evidencing such Shares are not immediately available, or who cannot comply with
the procedure for book-entry transfer on a timely basis, may tender such Shares
by following the procedure for guaranteed delivery set forth in Section 2.
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may also be obtained from the
Information Agent or from brokers, dealers, commercial banks or trust companies.
A shareholder may also contact brokers, dealers, commercial banks or trust
companies for assistance concerning the Offer.
------------------------
The Information Agent for the Offer is:
Innisfree M&A Incorporated logo
April 3, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION................................................ 1
THE OFFER................................................... 3
1. Terms of the Offer................................. 3
2. Procedure for Tendering Shares..................... 5
3. Withdrawal Rights.................................. 7
4. Acceptance for Payment and Payment................. 8
5. Certain Federal Income Tax Consequences............ 9
6. Price Range of Shares; Dividends on the Shares..... 10
7. Effect of the Offer on the Market for the Shares;
Stock Quotation; Exchange Act Registration; Margin
Regulations........................................ 10
8. Certain Information Concerning the Company......... 11
9. Certain Information Concerning the Purchaser and
Parent............................................... 13
10. Source and Amount of Funds......................... 15
11. Background of the Offer; Contacts with the Company;
the Merger Agreement and Related Agreements........ 15
12. Purpose of the Offer and the Merger; Plans for the
Company; Other Matters................................ 28
13. Dividends and Distributions........................ 29
14. Certain Conditions of the Offer.................... 29
15. Certain Legal Matters.............................. 31
16. Fees and Expenses.................................. 32
17. Miscellaneous...................................... 33
SCHEDULE I.--Directors and Executive Officers of Parent and
the Purchaser............................................. I-1
</TABLE>
<PAGE> 3
To the Holders of Common Stock of
Ameriwood Industries International Corporation:
INTRODUCTION
Horizon Acquisition, Inc., a Delaware corporation (the "Purchaser") and an
indirect wholly-owned subsidiary of Dorel Industries Inc., a Quebec, Canada
corporation ("Parent"), hereby offers to purchase all outstanding shares of
Common Stock, par value $1.00 per share (the "Common Stock"), including the
associated common share purchase rights (the "Rights", and together with the
Common Stock, the "Shares"), of Ameriwood Industries International Corporation,
a Michigan corporation (the "Company"), at a price of $9.625 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 shareholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by the
Purchaser pursuant to the Offer. The Purchaser will pay all charges and expenses
of Harris Trust Company of New York (the "Depositary") and Innisfree M&A
Incorporated (the "Information Agent") incurred in connection with the Offer.
See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") UNANIMOUSLY HAS
DETERMINED THAT EACH OF THE OFFER AND THE MERGER (AS DEFINED BELOW) IS FAIR TO,
AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF THE COMPANY, AND RECOMMENDS
THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE
OFFER.
ABN AMRO Incorporated ("ABN AMRO") has delivered to the Board its written
opinion that the consideration to be received by the shareholders of the Company
pursuant to each of the Offer and the Merger is fair to such shareholders from a
financial point of view. A copy of the opinion of ABN AMRO is contained in the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule
14D-9"), which is being mailed to shareholders herewith.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH, WHEN ADDED TO ANY SHARES ALREADY OWNED BY THE PURCHASER AND
PARENT, REPRESENTS AT LEAST A MAJORITY OF THE SHARES THEN OUTSTANDING ON A FULLY
DILUTED BASIS (THE "MINIMUM CONDITION"). SEE SECTION 14, WHICH SETS FORTH IN
FULL THE CONDITIONS TO THE OFFER.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of March 27, 1998 (the "Merger Agreement"), among Parent, the Purchaser and
the Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement, and in
accordance with the relevant provisions of the Michigan Business Corporation Act
(the "MBCA") and the General Corporation Law of the State of Delaware (the
"DGCL"), the Purchaser will be merged with and into the Company (the "Merger").
Following consummation of the Merger, the Company will continue as the surviving
corporation (the "Surviving Corporation") and will become an indirect
wholly-owned subsidiary of Parent. At the effective time of the Merger (the
"Effective Time"), each Share issued and outstanding immediately prior to the
Effective Time will be cancelled and converted automatically into the right to
receive $9.625 in cash, or any higher price that may be paid per Share in the
Offer, without interest (the "Offer Price"). The Merger Agreement is more fully
described in Section 11.
The Merger Agreement provides that, promptly upon the purchase by the
Purchaser of Shares pursuant to the Offer and from time to time thereafter, the
Purchaser shall be entitled to designate up to such number of directors, rounded
up to the next whole number, on the Board as will give the Purchaser
representation on the Board equal to the product of the number of directors on
the Board multiplied by the percentage that the aggregate number of Shares then
beneficially owned by the Purchaser and its affiliates following such purchase
<PAGE> 4
bears to the total number of Shares then outstanding. In the Merger Agreement,
the Company has agreed to take all actions necessary to cause the Purchaser's
designees to be elected as directors of the Company, including increasing the
size of the Board or securing the resignations of incumbent directors or both.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the approval and adoption of the Merger Agreement
by the requisite vote of the shareholders of the Company. See Section 11. Under
the Company's Restated Articles of Incorporation and the MBCA, the affirmative
vote of the holders of a majority of the outstanding Shares is required to
approve and adopt the Merger Agreement and the Merger. Consequently, if the
Purchaser acquires (pursuant to the Offer or otherwise) at least a majority of
the outstanding Shares, the Purchaser will have sufficient voting power to
approve and adopt the Merger Agreement and the Merger without the vote of any
other shareholder.
Under the MBCA, if the Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the then outstanding Shares, the Purchaser will be
able to approve and adopt the Merger Agreement and the transactions contemplated
thereby, including the Merger, without a vote of the Company's shareholders. In
such event, Parent, the Purchaser and the Company have agreed to take, at the
request of the Purchaser, 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 shareholders. If, however, the
Purchaser does not acquire at least 90% of the then outstanding Shares pursuant
to the Offer or otherwise and a vote of the Company's shareholders is required
under the MBCA, a significantly longer period of time will be required to effect
the Merger. See Section 15.
The Purchaser presently intends to seek to cause the Company to make an
application for the termination of the registration of the Shares under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as soon as
possible after the purchase of all validly tendered Shares pursuant to the Offer
if the requirements for termination of registration are met. See Section 7.
In connection with the execution of the Merger Agreement, Parent entered
into Tender and Option Agreements, each dated as of March 27, 1998 (the "Tender
Agreements"), with each of Neil L. Diver, Chairman of the Board, and Kevin C.
Coyne and Edwin Wachtel, each a member of the Board (collectively, the "Director
Shareholders"), who control an aggregate of 382,755 Shares, or approximately 10%
of the Shares outstanding on March 27, 1998, pursuant to which the Director
Shareholders agreed, among other things and upon the terms and conditions set
forth therein, to tender the Shares they own of record (255,717 Shares, or
approximately 5.88% of the outstanding Shares) in the Offer and grant an option
on such Shares to the Purchaser at the Offer Price, to vote such Shares in the
manner specified in the Tender Agreements with respect to certain matters and to
appoint Parent as the Director Shareholders' proxy to vote such Shares in
certain circumstances. The Tender Agreements are more fully described in Section
11.
The Minimum Condition requires that the number of Shares validly tendered
and not withdrawn prior to the expiration of the Offer, when added to any Shares
already owned by the Purchaser and Parent, represent at least a majority of the
Shares outstanding on a fully diluted basis. According to the Company, as of
March 27, 1998, there were 4,349,606 Shares issued and outstanding, and there
were outstanding options to purchase an aggregate of 176,625 Shares. The Merger
Agreement provides, among other things, that the Company will not, without the
prior written consent of Parent, issue any additional Shares (except on the
exercise of outstanding options and as otherwise permitted under the Merger
Agreement). Based on the foregoing and assuming that all outstanding options are
exercised, the Minimum Condition will be satisfied if 2,263,116 Shares are
validly tendered and not withdrawn prior to the expiration of the Offer,
including those Shares already owned by the Purchaser and Parent. If the Minimum
Condition is satisfied, Parent would be able to effect the Merger without the
affirmative vote of any other shareholder of the Company.
On April 4, 1996, the Board approved a Shareholder Protection Rights Plan
(the "Rights Plan"). The Rights Plan provides that one Right will attach to each
outstanding share of Common Stock. The purchase price payable upon exercise of a
Right is $80.00, subject to adjustment. The distribution was payable to the
shareholders of record at the close of business on May 21, 1996 (the "Record
Date") and with respect to all Common Stock issued after the Record Date and
prior to certain events set forth in the Rights Plan. The description of the
Rights Plan and terms of the Rights are set forth in a Rights Agreement, dated
as of April 4,
2
<PAGE> 5
1996 (the "Rights Agreement"), by and between the Company and Harris Trust and
Savings Bank, as Rights Agent. The Rights are triggered when a person becomes a
beneficial owner of 20% or more of the outstanding Common Stock, or a tender or
exchange offer, the consummation of which would result in beneficial ownership
by a person of 20% or more of such outstanding Common Stock, is commenced. Based
on the information disclosed by the Company in connection with and prior to the
Company entering the Merger Agreement, the Company has amended the Rights
Agreement to provide that the execution of the Merger Agreement and any
amendments thereto and the Tender Agreements and the consummation of the
transactions contemplated by such agreements will not cause (i) Parent and/or
the Purchaser or their respective Affiliates or Associates to become an
Acquiring Person (as such terms are defined in the Rights Agreement) unless the
Merger Agreement and the Tender Agreements have been terminated in accordance
with their respective terms, or (ii) a Distribution Date or a Shares Acquisition
Date (as such terms are defined in the Rights Agreement) to occur, irrespective
of the number of Shares acquired pursuant to the Offer, the Merger or the
transactions contemplated by the Merger Agreement and the Tender Agreements.
The Purchaser estimates that the total funds required to purchase all
Shares validly tendered pursuant to the Offer, consummate the Merger and pay all
related costs and expenses will be approximately $43.0 million. The Purchaser
will obtain such funds from Parent by means of capital contributions, loans or a
combination thereof. Parent plans to obtain the funds for such capital
contributions or loans from borrowings under Parent's credit facilities. See
Section 10.
The information contained in this Offer to Purchase concerning the Company
was supplied by the Company, and Parent and the Purchaser take no responsibility
for the accuracy of such information. The information contained in this Offer to
Purchase concerning the Offer, the Merger, Parent and the Purchaser was supplied
by Parent and the Purchaser, and the Company takes no responsibility for the
accuracy of such information.
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.
THE OFFER
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn in accordance with Section 3 of
this Offer to Purchase. The term "Expiration Date" shall mean 12:00 Midnight,
New York City time, on Thursday, April 30, 1998, unless and until the Purchaser,
in accordance with the terms of the Merger Agreement, shall have extended the
period of time for which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date at which the Offer, as so extended by
the Purchaser, shall expire.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition and the expiration or termination of all waiting periods
imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the regulations thereunder (the "HSR Act"). See Section 14. If such
conditions are not satisfied prior to the Expiration Date, the Purchaser
reserves the right (but shall not be obligated) to (i) decline to purchase any
of the Shares tendered and terminate the Offer, subject to the terms of the
Merger Agreement, (ii) waive any of the conditions to the Offer, to the extent
permitted by applicable law and the provisions of the Merger Agreement, and,
subject to complying with applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), purchase all Shares validly tendered or
(iii) extend the Offer and, subject to the right of shareholders to withdraw
Shares until the Expiration Date, retain the Shares which will have been
tendered during the period or periods for which the Offer is extended.
3
<PAGE> 6
Subject to the terms of the Merger Agreement, the Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time,
(i) to extend the Offer on one or more occasions beyond the then-scheduled
Expiration Date, if at the then-scheduled Expiration Date of the Offer any of
the conditions to Purchaser's obligation to accept for payment and pay for the
Shares have not been satisfied or waived, until such time as such conditions are
satisfied or waived, (ii) increase the Offer Price payable pursuant to the Offer
and extend the Offer for any period required by any rule, regulation,
interpretation or provision of the Commission or the staff thereof applicable to
the Offer, and (iii) extend the Offer on one occasion for a period of not more
than 20 business days beyond the latest Expiration Date that would otherwise be
permitted under clause (i) or (ii) of this sentence if there shall not have been
validly tendered and not withdrawn pursuant to the Offer at least 90% of the
then outstanding Shares. The rights reserved by the Purchaser in this paragraph
are in addition to the Purchaser's rights to terminate the Offer as described in
Section 14. Any extension, amendment or termination will be followed as promptly
as practicable by public announcement thereof, the announcement in the case of
an extension to be issued no 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 the Purchaser under such Rule or the
manner in which the Purchaser may choose to make any public announcement, the
Purchaser currently intends to make announcements by issuing a release to the
Dow Jones News Service.
The Merger Agreement provides that, without the prior written consent of
the Company, neither Parent nor the Purchaser will decrease the Offer Price or
change the form of consideration payable in the Offer, decrease the number of
Shares sought to be purchased pursuant to the Offer, change the conditions
described in Section 14, impose additional conditions to the Offer or amend any
other term of the Offer in any manner materially adverse to the holders of
Shares.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may retain tendered Shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in Section 3. However, the ability of
the Purchaser to delay the payment for Shares which the Purchaser has accepted
for payment is limited by Rule 14e-l(c) under the Exchange Act, which requires
that a bidder pay the consideration offered or return the securities deposited
by or on behalf of holders of securities promptly after the termination or
withdrawal of the Offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the 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 then existing, including
the relative materiality of the changed terms or information. In a public
release, the Commission has stated that in its view an offer must remain open
for a minimum period of time following a material change in the terms of the
Offer and that waiver of a material condition, such as the Minimum Condition, is
a material change in the terms of the Offer. The release states that an offer
should remain open for a minimum of five business days from the date a material
change is first published, sent or given to security holders and that, if
material changes are made with respect to information not materially less
significant than the offer price and the number of shares being sought, a
minimum of ten business days may be required to allow adequate dissemination and
investor response. The requirement to extend the Offer will not apply to the
extent that the number of business days remaining between the occurrence of the
change and the then-scheduled Expiration Date equals or exceeds the minimum
extension period that would be required because of such amendment. As used in
this Offer to Purchase, "business day" has the meaning set forth in Rule 14d-1
under the Exchange Act.
The Company has provided the Purchaser with the Company's shareholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related
4
<PAGE> 7
Letter of Transmittal will be mailed by the Purchaser to record holders of
Shares and will be furnished by the Purchaser to brokers, dealers, banks and
similar persons whose names, or the names of whose nominees, appear on the
shareholder lists or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
2. PROCEDURE FOR TENDERING SHARES.
Valid Tender. For Shares to be validly tendered pursuant to the Offer,
either (i) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature guarantees, or in the
case of a book-entry transfer, an Agent's Message (as defined below), and any
other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date and either certificates for tendered Shares must be received by
the Depositary at one of such addresses or such Shares must be delivered
pursuant to the procedures for book-entry transfer set forth below (and a
Book-Entry Confirmation (as defined below) received by the Depositary), in each
case prior to the Expiration Date, or (ii) the tendering shareholder must comply
with the guaranteed delivery procedures set forth below.
The Depositary will establish accounts with respect to the Shares at The
Depository Trust Company and the Philadelphia Depository Trust Company (each, a
"Book-Entry Transfer Facility" and, collectively, the "Book-Entry Transfer
Facilities") for purposes of the Offer within two business days after the date
of this Offer to Purchase. Any financial institution that is a participant in
any of the Book-Entry Transfer Facilities' systems may make book-entry delivery
of Shares by causing a Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account in accordance with that Book-Entry Transfer Facility's
procedure for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message, and any other required documents must, in any case, be
transmitted to, and received by, the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or the tendering shareholder must comply with the guaranteed delivery procedures
described below. The confirmation of a book-entry transfer of Shares into the
Depositary's account at a Book-Entry Transfer Facility as described above is
referred to herein as a "Book-Entry Confirmation." DELIVERY OF DOCUMENTS TO A
BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
any of the Book Entry Transfer Facilities' systems whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
therewith and such registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (ii) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature
5
<PAGE> 8
Guarantee Program or the Stock Exchange Medallion Program (each, an "Eligible
Institution" and, collectively, "Eligible Institutions"). In all other cases,
all signatures on Letters of Transmittal must be guaranteed by an Eligible
Institution. See Instructions 1 and 5 to the Letter of Transmittal. If the
certificates for Shares are registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made or certificates
for Shares not tendered or not accepted for payment are to be returned to a
person other than the registered holder of the certificates surrendered, then
the tendered certificates for such Shares must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name or names of
the registered holders or owners appear on the certificates, with the signatures
on the certificates or stock powers guaranteed as aforesaid. See Instructions 1
and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates for Shares 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
Depositary prior to the Expiration Date, such shareholder's tender may be
effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for all physically tendered Shares, in proper
form for transfer (or a Book-Entry Confirmation with respect to all such
Shares), together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message, and any other
required documents are received by the Depositary within three trading days
after the date of execution of such Notice of Guaranteed Delivery. A
"trading day" is any day on which The New York Stock Exchange, Inc. is open
for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary 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 such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and (iii) any other documents required by the Letter of Transmittal.
Accordingly, tendering shareholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations with respect to
Shares are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY THE PURCHASER FOR THE
SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
The valid tender of Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering shareholder and
the Purchaser upon the terms and subject to the conditions of the Offer.
Appointment. By executing the Letter of Transmittal as set forth above, the
tendering shareholder will irrevocably appoint designees of the Purchaser, and
each of them, as such shareholder's attorneys-in-fact and proxies in the manner
set forth in the Letter of Transmittal, each with full power of substitution, to
the full extent of such shareholder's rights with respect to the Shares tendered
by such shareholder and accepted for payment by the Purchaser and with respect
to any and all other Shares or other securities or rights issued or issuable in
respect of such Shares on or after April 3, 1998. All such proxies will be
considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, the Purchaser accepts for
payment Shares tendered by such shareholder as provided herein. Upon such
appointment, all prior powers of attorney, proxies and consents given by such
shareholder with respect to such Shares or other securities or rights will,
without further action, be revoked and no subsequent powers of attorney,
proxies, consents or revocations may be given by such shareholder (and, if
given, will not be deemed
6
<PAGE> 9
effective). The designees of the Purchaser will thereby be empowered to exercise
all voting and other rights with respect to such Shares and other securities or
rights, including, without limitation, in respect of any annual, special or
adjourned meeting of the Company's shareholders, actions by written consent in
lieu of any such meeting or otherwise, as they in their sole discretion deem
proper. The Purchaser reserves the right to require that, in order for Shares to
be deemed validly tendered, immediately upon the Purchaser's acceptance for
payment of such Shares, the Purchaser must be able to exercise full voting,
consent and other rights with respect to such Shares and other related
securities or rights, including voting at any meeting of shareholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any or all tenders of any Shares determined by it not to be in proper form or
the acceptance for payment of, or payment for which may, in the opinion of the
Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute
right, subject to the provisions of the Merger Agreement, to waive any of the
conditions of the Offer or any defect or irregularity in the tender of any
Shares of any particular shareholder, whether or not similar defects or
irregularities are waived in the case of other shareholders. No tender of Shares
will be deemed to have been validly made until all defects or irregularities
relating thereto have been cured or waived. None of the Purchaser, Parent, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders or incur any
liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
Backup Withholding. In order to avoid "backup withholding" of U.S. federal
income tax on payments of cash pursuant to the Offer, a shareholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such shareholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such shareholder is not subject to backup withholding. If a
shareholder does not provide such shareholder's correct TIN or fails to provide
the certifications described above, the Internal Revenue Service (the "IRS") may
impose a penalty on such shareholder and payment of cash to such shareholder
pursuant to the Offer may be subject to backup withholding of 31%. All
shareholders surrendering Shares pursuant to the Offer should complete and sign
the main signature form and the Substitute Form W-9 included as part of the
Letter of Transmittal to provide the information and certification necessary to
avoid backup withholding (unless an applicable exemption exists and is proved in
a manner satisfactory to the Purchaser and the Depositary). Certain shareholders
(including, among others, all corporations and certain foreign individuals and
entities) are not subject to backup withholding. Foreign shareholders, if
exempt, should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 to the
Letter of Transmittal.
3. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 3, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to
the procedures set forth below at any time prior to the Expiration Date and,
unless theretofore accepted for payment and paid for by the Purchaser pursuant
to the Offer, may also be withdrawn at any time after Tuesday, June 2, 1998.
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 and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares 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 delivered pursuant to the procedures
for book-entry transfer as set forth in Section 2, any notice of withdrawal must
also specify the name and number of the account at the appropriate Book-Entry
7
<PAGE> 10
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures. Withdrawals of tenders of
Shares may not be rescinded, and any Shares properly withdrawn will thereafter
be deemed not validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered by again following one of the procedures described in
Section 2 any time on or prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Parent, 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.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay, promptly
after the Expiration Date, for all Shares validly tendered prior to the
Expiration Date and not properly withdrawn in accordance with Section 3. All
determinations concerning the satisfaction of such terms and conditions will be
within the Purchaser's discretion, which determinations will be final and
binding. See Sections 1 and 14. The Purchaser expressly reserves the right, in
its sole discretion, to delay acceptance for payment of or payment for Shares in
order to comply in whole or in part with any applicable law, including, without
limitation, the HSR Act. Any such delays will be effected in compliance with
Rule 14e-l(c) under the Exchange Act (relating to a bidder's obligation to pay
for or return tendered securities promptly after the termination or withdrawal
of such bidder's offer).
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 a timely Book-Entry Confirmation with respect thereto), (ii) a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and (iii) any other documents required
by the Letter of Transmittal. The per Share consideration paid to any
shareholder pursuant to the Offer will be the highest per Share consideration
paid to any other shareholder pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares. 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 shareholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering shareholders. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY THE PURCHASER FOR THE
SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
If the Purchaser is delayed in its acceptance for payment of, or payment
for, Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (including such rights as are set forth in Sections 1 and 14) (but
subject to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary
may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to exercise, and duly exercise, withdrawal rights as described in
Section 3.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, certificates for any such Shares will be returned, without expense to
the tendering shareholder (or, in the case of Shares delivered by book-entry
transfer of such Shares into the Depositary's account at a Book-Entry Transfer
Facility pursuant to the procedures set forth in Section 2, such Shares will be
credited to an account maintained at the appropriate Book-Entry Transfer
Facility), as promptly as practicable after the expiration or termination of the
Offer.
8
<PAGE> 11
Subject to the terms of the Merger Agreement, the Purchaser 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 wholly-owned subsidiaries of Parent, the
right to purchase Shares tendered pursuant to the Offer, but any such transfer
or assignment will not relieve the Purchaser of its obligations under the Offer
and will in no way prejudice the rights of tendering shareholders to receive
payment for Shares validly tendered and accepted for payment pursuant to the
Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for U.S. federal income tax purposes and also may be a
taxable transaction under state, local or foreign tax laws. Accordingly, a
shareholder who tenders Shares in the Offer or receives cash in exchange for
Shares in the Merger will recognize gain or loss for federal income tax purposes
equal to the difference, if any, between the amount of cash received and the
shareholder's tax basis in the Shares sold. Gain or loss will be determined
separately for each block of Shares (i.e., Shares acquired at the same time and
price) exchanged pursuant to the Offer or the Merger. Such gain or loss
generally will be capital gain or loss if the Shares disposed of were held as
capital assets by the shareholder, and will be long-term capital gain or loss if
the Shares disposed of were held for more than one year at the date of sale or
the Expiration Date (in the case of the Offer) or on the date of the Merger (in
the case of the Merger), as the case may be. In addition, the Taxpayer Relief
Act of 1997 could affect the federal income tax consequences of the Offer and
Merger in that, among other things, it reduces the maximum rate of federal
income tax on capital gains of individual taxpayers for capital assets held more
than 18 months. Shares held less than one year may be subject to ordinary income
tax rates of up to 39.6% for individuals.
The foregoing summary constitutes a general description of certain U.S.
federal income tax consequences of the Offer and the Merger without regard to
the particular facts and circumstances of each shareholder of the Company and is
based on the provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury Department Regulations issued pursuant thereto and published
rulings and court decisions in effect as of the date hereof, all of which are
subject to change, possibly with retroactive effect. Special tax consequences
not described herein may be applicable to certain shareholders subject to
special tax treatment (including insurance companies, tax-exempt organizations,
financial institutions or broker dealers, foreign shareholders and shareholders
who have acquired their Shares pursuant to the exercise of employee stock
options or otherwise as compensation). ALL SHAREHOLDERS SHOULD CONSULT THEIR TAX
ADVISORS WITH RESPECT TO SPECIFIC TAX EFFECTS APPLICABLE TO THEM OF THE OFFER
AND THE MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE
MINIMUM TAX AND ANY STATE, LOCAL AND FOREIGN TAX LAWS.
9
<PAGE> 12
6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES.
The Shares are traded through the Nasdaq National Market under the symbol
"AWII". The following table sets forth, for each of the periods indicated, the
high and low sales prices per Share on the Nasdaq National Market.
<TABLE>
<CAPTION>
HIGH LOW
------ -----
<S> <C> <C>
1995:
First Quarter............................................. $ 9.50 $6.75
Second Quarter............................................ 7.75 6.00
Third Quarter............................................. 7.00 6.13
Fourth Quarter............................................ 6.38 3.88
1996:
First Quarter............................................. $ 5.75 $3.88
Second Quarter............................................ 6.75 5.38
Third Quarter............................................. 9.00 5.75
Fourth Quarter............................................ 9.75 8.13
1997:
First Quarter............................................. $10.75 $7.50
Second Quarter............................................ 8.75 6.63
Third Quarter............................................. 7.38 5.50
Fourth Quarter............................................ 7.75 4.50
1998:
First Quarter............................................. $ 9.50 $4.63
Second Quarter (through April 2).......................... 9.50 9.44
</TABLE>
On March 27, 1998, the last full trading day prior to the announcement of
the execution of the Merger Agreement and of the Purchaser's intention to
commence the Offer, the closing sales price per Share as reported on the Nasdaq
National Market was $7.125. On April 2, 1998, the last full trading day prior to
the commencement of the Offer, the closing sales price per Share as reported on
the Nasdaq National Market was $9.44. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT
MARKET QUOTATION FOR THE SHARES.
The Company did not pay or declare any dividends for 1997, 1996 or 1995.
The Merger Agreement provides that, without the prior written consent of Parent,
the Company will not declare, set aside or pay any dividend on or make any other
distribution in respect of its capital stock. See Section 11.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK QUOTATION; EXCHANGE
ACT REGISTRATION;
MARGIN REGULATIONS.
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and, depending upon the number of Shares so purchased,
could adversely effect the liquidity and market value of the remaining Shares
held by the public.
Stock Quotation. Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the requirements for continued
inclusion in the Nasdaq National Market, which requires that there be at least
200,000 shares publicly held, with a market value of at least $1,000,000, held
by at least 400 stockholders or 300 stockholders of round lots. Shares held
directly or indirectly by directors, officers or beneficial owners of more than
10% of the Shares are not considered as being publicly held for this purpose. If
the Nasdaq National Market were to cease to publish quotations for the Shares,
it is possible that the Shares would continue to trade in the over-the-counter
market and that prices or other quotations would be reported
10
<PAGE> 13
by other sources. The extent of the public market for such Shares and the
availability of such quotations would depend, however, upon such factors as the
number of stockholders and/or the aggregate market value of such securities
remaining at such time, the interest in maintaining a market in the Shares on
the part of securities firms, the possible termination of registration under the
Exchange Act, as described below, and other factors.
Margin Regulations. The Shares are presently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin regulations
of the Federal Reserve Board and therefore could no longer be used as collateral
for loans made by brokers.
Exchange Act Registration. The Shares currently are registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its shareholders and to the Commission and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy statement
pursuant to Section 14(a) in connection with shareholders' meetings and the
related requirement of furnishing an annual report to shareholders and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Company. Furthermore, the
ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144 or
Rule 144A promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), may be impaired or eliminated. If registration of the Shares
under the Exchange Act were terminated, the Shares would no longer be "margin
securities" or be eligible for continued inclusion in the Nasdaq National
Market.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will cease to be reported on the Nasdaq National Market 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 otherwise set forth herein, the information concerning the
Company contained in this Offer to Purchase, including financial information,
has been furnished by the Company or has been taken from or based upon publicly
available documents and records on file with the Commission and other public
sources. Neither the Purchaser nor Parent assumes any responsibility for the
accuracy or completeness of the information concerning the Company 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 may affect the
significance or accuracy of any such information but which are unknown to the
Purchaser or Parent.
General. The Company was originally incorporated in Michigan in 1915. It is
the successor to "Rose Patch and Label Company", and later "Rospatch
Corporation", which reflected the Company's original business, the production of
fabric patches and labels. In 1991, the name was changed to "Ameriwood
Industries International Corporation" which more closely identifies the Company
with its current core business, wood products. The Company's corporate offices
are located at 168 Louis Campau Promenade, Suite 400, Grand Rapids, Michigan,
49503, and its telephone number is (616) 336-9400.
Principal Products. The Company manufacturers unassembled furniture, stereo
speaker cabinets and fully assembled speaker units, and is an original equipment
manufacturer of various laminated products used by other manufacturers for
incorporation into their own products. All Company-made products are
manufactured at two subsidiary facilities, both of which are located in the
United States. The Company sells its products through its own sales personnel
and through independent sales representatives who are assigned specific
territories or customers.
11
<PAGE> 14
The Company categorizes its furniture products as those of "Ameriwood
Furniture" and its stereo speaker cabinets and other products as those of
"Ameriwood Custom Solutions" (formerly "Ameriwood OEM").
Ameriwood Furniture currently sells its unassembled furniture to office
superstores, mass merchant discount stores, home improvement centers, national
chains, catalog showrooms, home furnishings retailers, military exchanges and
warehouse clubs. Furniture products include office furniture, computer
furniture, wall units/organizers, storage units, wardrobes, bookcases, utility
carts, television and VCR stands, entertainment centers, home theater units and
kitchen and bedroom furniture.
Ameriwood Custom Solutions produces stereo speaker cabinets and components.
These products are sold primarily to consumer electronics manufacturers,
including certain major audio component companies. In addition, Ameriwood Custom
Solutions sells custom products for the point of purchase and fixtures market,
for interactive kiosk cabinets, and for institutional uses. It also sells
Company-fabricated wood grain and opaque laminated particle board to a variety
of manufacturers for use in kitchen and bathroom cabinets, office partitions and
other furniture and building products.
Selected Financial Information. Set forth below is certain selected
consolidated financial information relating to the Company and its subsidiaries
which has been excerpted or derived from the audited financial statements
contained in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 (the "Form 10-K"). More comprehensive financial information is
included in the Form 10-K and other documents filed by the Company with the
Commission. The financial information that follows is qualified in its entirety
by reference to such reports and other documents, including the financial
statements and related notes contained therein. Such reports and other documents
may be examined and copies may be obtained from the offices of the Commission in
the manner set forth below.
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER 31,
--------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Income Statement Data:
Net Sales.............................................. $ 94,553 $114,547 $105,998
Operating Income (Loss)................................ (4,449) 1,549 (4,236)
Net Income (Loss)...................................... 2,524 480 (3,368)
Basic Earnings (Loss) Per Share........................ 0.59 0.11 (0.80)
Weighted average shares outstanding.................... 4,303 4,255 4,209
Dividends per Share.................................... -- -- --
-------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31,
--------------------
1997 1996
-------- --------
<S> <C> <C>
Balance Sheet Data:
Current Assets............................................ $ 33,515 $ 42,793
Total Assets.............................................. 57,800 66,506
Current Liabilities....................................... 9,057 14,353
Long-Term Debt............................................ 5,000 11,600
Shareholders' Equity...................................... 41,103 37,969
</TABLE>
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Information as of particular
dates concerning the
12
<PAGE> 15
Company's directors and officers, their remuneration, stock options granted to
them, the principal holders of the Company's securities and any material
interest of such persons in transactions with the Company is required to be
disclosed in proxy statements distributed to the Company's shareholders and
filed with the Commission. Such reports, proxy statements and other information
should be available for inspection at the public reference facilities maintained
by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549, and also should be available for inspection at the Commission's regional
offices located at Seven World Trade Center, 13th Floor, New York, New York
10048 and the Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such materials may also be obtained by mail, upon
payment of the Commission's customary fees, by writing to its principal office
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
such materials may be accessed electronically at the Commission's web site on
the internet at www.sec.gov.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT.
The Purchaser is a newly incorporated Delaware corporation organized in
connection with the Offer and the Merger and has not carried on any activities
other than in connection with the Offer and the Merger. The principal offices of
the Purchaser are located at 4750 Boulevard des Grandes Prairies, St. Leonard,
Quebec, Canada H1R 1A3. The Purchaser is an indirect wholly owned subsidiary of
Parent.
Until immediately prior to the time that the Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that the Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Merger. Because the Purchaser is newly formed and has
minimal assets and capitalization, no meaningful financial information regarding
the Purchaser is available.
Parent is a Quebec, Canada corporation. Its principal offices are located
at 4750 Boulevard des Grandes Prairies, St. Leonard, Quebec, Canada H1R 1A3.
Parent is a vertically-integrated consumer products manufacturer and distributor
specializing in three product areas: ready-to-assemble ("RTA") furniture,
juvenile products, and home furnishings. Parent's products include a wide
variety of RTA furniture for home and office use; juvenile furniture and
accessories such as infant car seats, strollers, high chairs, toddler beds and
cribs; and home furnishings such as metal folding chairs, tables, bunk beds,
futons and step stools, as well as a mid-market line of case goods consisting of
bedroom sets, wall units and entertainment units.
General Development of Parent's Business. Parent was founded in Montreal,
Quebec in 1962.
In 1987, Parent completed an initial public offering in the Province of
Quebec and listed its common shares for trading on the Montreal Exchange.
In 1988, Parent purchased Cosco, Inc. ("Cosco") of Columbus, Indiana, a
company involved in the production of children's furniture and accessories, as
well as the production of folding metal furniture.
Dorel (U.K.) Ltd. ("Dorel (U.K.)") was established in 1988 to penetrate the
juvenile market in the United Kingdom and continental Europe. Parent originally
owned 75% of Dorel (U.K.) and acquired the remaining 25% interest in 1990 for
nominal consideration.
In 1990, Parent acquired all of the shares of Charleswood Corporation
("Charleswood"), a manufacturer and distributor of RTA furniture located near
St. Louis, Missouri.
Parent's common shares were listed on The Toronto Stock Exchange in 1990.
In 1991, Cosco purchased the assets of Silgo International, a manufacturer
and distributor of children's wall hangings and decorative accessories based in
San Diego, California. The assets were used to establish Infantino, Inc.
("Infantino"), a subsidiary that manufactures and sells juvenile accessories.
During 1993, Parent purchased the assets of Carol Ann Furniture of
Montreal, Quebec. The assets were used in 1994 to establish Leadra Design Inc.
("Leadra"), a subsidiary which manufactures and distributes a line of mid-priced
bedroom sets, wall units, tables and chairs.
13
<PAGE> 16
In 1994, Parent purchased Maxi-Miliaan B.V. ("Maxi-Miliaan"), an infant car
seat manufacturer and distributor based in the Netherlands. Maxi-Miliaan allows
Parent to more effectively penetrate the fragmented European market.
Maxi-Miliaan has established sales offices in France, Germany and Austria.
Parent employs more than 2,900 people in nine countries. Major North
American facilities are located in Montreal, Quebec; Cornwall, Ontario;
Columbus, Indiana; Wright City, Missouri; Cartersville, Georgia; and San Diego,
California. Parent's major subsidiaries in the United States are Cosco and
Charleswood. European operations are carried out through Maxi-Miliaan in the
Netherlands and Dorel (U.K.) in the United Kingdom.
Description of Parent's Business. RTA furniture is manufactured and
packaged as component parts and is assembled by the consumer. Parent's RTA
Furniture Segment produces office furniture, home office furniture, computer
tables, microwave stands, entertainment units and home theater units which are
marketed under the Charleswood and Ridgewood names. Parent's RTA Furniture
Segment accounted for 27.4% of Parent's sales in 1997.
Parent's Juvenile Products Segment manufactures infant car seats,
strollers, high chairs, toddler beds, cribs, playpens, swings, infant carriers,
mobiles and accessories. These products are marketed under the brand names
Dorel, Cosco and Infantino in North America, and Maxi-Cosi in Europe. Although
Parent manufactures and sells juvenile products at all price levels, the primary
focus of its North American operations is on the development and marketing of
products at the entry and mid-range price points. Parent's products are designed
for middle-income family purchasers, whose priorities are safety and quality at
reasonable prices. Parent's largest customers, mass merchants Wal-Mart and
Kmart, sell primarily to this market. In Europe, Parent sells primarily high-end
juvenile products. Parent's Juvenile Products Segment accounted for 43.7% of
Parent's sales in 1997.
Parent's Home Furnishings Segment produces metal folding furniture, bunk
beds and futons, step stools, metal and wood computer stands and case goods
furniture. These products are manufactured and distributed by Cosco, Leadra and
the Dorel Home Products division. In 1997, the Home Furnishings Segment
accounted for 28.9% of Parent's sales.
In 1997, Parent effected 84% of its sales in the United States, 6% in
Canada and 10% in Europe and elsewhere.
The name, citizenship, business address, principal occupation or
employment, and five-year employment history for each of the directors and
executive officers of the Purchaser and Parent and certain other information are
set forth in Schedule I hereto.
Except as described in this Offer to Purchase, (i) none of the Purchaser,
Parent nor, to the best knowledge of the Purchaser and Parent, any of the
persons listed in Schedule I to this Offer to Purchase or any associate or
majority-owned subsidiary of the Purchaser, Parent or any of the persons so
listed, beneficially owns or has any right to acquire, directly or indirectly,
any Shares and (ii) none of the Purchaser, Parent nor, to the best knowledge of
the Purchaser and Parent, any of the persons or entities referred to above nor
any director, executive officer or subsidiary of any of the foregoing has
effected any transaction in the Shares during the past 60 days.
Except as provided in the Merger Agreement and as otherwise described in
this Offer to Purchase, none of the Purchaser, Parent nor, to the best knowledge
of the Purchaser and Parent, any of the persons listed in Schedule I to this
Offer to Purchase, has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including,
but not limited to, any contract, arrangement, understanding or relationship
concerning the transfer or voting of such securities, joint ventures, loan or
option arrangements, puts or calls, guaranties of loans, guaranties against loss
or the giving or withholding of proxies. Except as set forth in this Offer to
Purchase, since December 31, 1994, neither the Purchaser nor Parent nor, to the
best knowledge of the Purchaser and Parent, any of the persons listed on
Schedule I hereto, has had any business relationship or transaction with the
Company or any of its executive officers, directors or affiliates that is
required to be reported under the rules and regulations of the Commission
applicable to the Offer. Except as set forth in this Offer to Purchase, since
December 31, 1994, there have
14
<PAGE> 17
been no contacts, negotiations or transactions between any of the Purchaser,
Parent, or any of their respective subsidiaries or, to the best knowledge of The
Purchaser and Parent, any of the persons listed in Schedule I to this Offer to
Purchase, on the one hand, and the Company or its affiliates, on the other hand,
concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, an election of directors or a sale or other transfer
of a material amount of assets.
10. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Purchaser to consummate the Offer
and the Merger and to pay related fees and expenses is estimated to be
approximately $43.0 million. The Purchaser will obtain all of such funds from
working capital and available funds under new credit facilities of Parent.
Parent has definitive commitments for approximately $63,000,000 of financing
under two credit facilities. Parent has a definitive commitment for a
$33,000,000 unsecured guaranteed revolving credit facility among Dorel
Investment L.P., ("Dorel Investment") as borrower, Parent and its material
subsidiaries, as guarantors, and Royal Bank of Canada ("RBC"), as agent for a
syndicate of banks. The facility will have a term of two years. Loans under the
facility will bear interest at either (i) LIBOR plus a margin determined by a
ratio of indebtedness to EBITDA or (ii) the higher of RBC's Prime Rate and the
sum of (x) one half of one percent and (y) the effective federal funds rate.
Under the credit facility, Parent will be required to maintain certain financial
ratios and level of net worth, and future indebtedness and dividends, as well as
Parent's ability to secure future obligations, among other things, will be
restricted. Parent also has a definitive commitment from Teachers Insurance and
Annuity Association and Prudential Capital Corp. to purchase $30,000,000
aggregate principal amount of notes issued by Dorel Investment and guaranteed by
Parent and certain of its subsidiaries. The term of the notes will be 10 years
and they will bear interest at a rate of 115 basis points over 7-year U.S.
Treasury Bonds. Parent will be required to maintain certain financial ratios and
level of net worth, and, among other things, Parent's ability to incur secured
debt will be restricted. Purchaser also will obtain funds from Parent's lines of
credit and other short term borrowing arrangements. It is anticipated that any
borrowings under these facilities will be repaid by the Purchaser from
internally generated funds and/or public or private financings of Parent and the
Company.
11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT AND
RELATED AGREEMENTS.
BACKGROUND OF THE OFFER
The following description was prepared by Parent and the Company.
Information about the Company was provided by the Company and neither the
Purchaser nor Parent takes any responsibility for the accuracy or completeness
of any information regarding meetings or discussions in which the Purchaser,
Parent or their representatives did not participate.
The RTA furniture industry, while exhibiting growth above the general
economy, is very competitive and in recent years has experienced intensified
competition. There has been consolidation of both industry participants and
customers, and in addition, there have been technological advances in production
allowing for greater production efficiencies and expanded capabilities. The
largest industry participants significantly influence the competitiveness of the
industry by their manufacturing capacity and efficiency as well as their
economies of scale in servicing customers. In view of this industry environment,
in September 1996, management of the Company began work on a three year
strategic plan (the "Plan") which was then presented to the Board in November
1996. Following review of the Plan, the Board decided that a further study of
the Company's capital expenditure needs was required and a consultant for such
study was retained. The consultant rendered a preliminary report in February
1997 and, at the meeting of the Board in April 1997, the final report was
submitted and reviewed. Also at the meeting, management of the Company reported
on recent developments in the industry and the Company's position in the
industry.
From May 1997 through August 1997, management of the Company and the Board
commenced a thorough reexamination of the Company's Plan and its implementation.
The reexamination of the Plan indicated that while the Company had made progress
in increasing its manufacturing capabilities and raising productivity, the
Company's long-term competitive position was nonetheless subject to substantial
risks. In
15
<PAGE> 18
particular, substantial capital expenditures would be required to keep the
Company competitive in an environment of significantly larger industry
participants, with greater financial resources than the Company, pursuing a
consolidating customer base. As a result, the Board and the Company's management
determined that the Company should conduct a systematic review of its strategic
alternatives, including alternatives to remaining an independent company, in
order to increase shareholder value.
At the Board meeting held in August, the Board authorized senior management
to contact outside financial advisors with respect to the consideration and
implementation of possible strategic alternatives for the Company. In October
1997, ABN AMRO was retained. During the period from October through November
1997, ABN AMRO approached a number of companies on a confidential basis to
discuss their interest in entering into a strategic transaction with the
Company. Certain of these companies, including Parent, entered into
confidentiality and standstill agreements with the Company and received
financial and other information regarding the Company in order to conduct a due
diligence review.
In December 1997, the Company's senior management and representatives of
ABN AMRO reported to the Board the results of their preliminary discussions with
potential strategic partners, including preliminary indications of interest in
pursuing a transaction from three of these potential strategic partners.
From January through February 1998, these three potential strategic
partners continued to conduct their due diligence review, which included tours
of Company facilities and presentations by senior management of the Company.
During this period, ABN AMRO was notified by one of the parties that it no
longer was interested in pursuing a strategic relationship with the Company. On
February 12, 1998, the Board held a special meeting to explore further the
Company's strategic and financial alternatives. The Company's senior management
and representatives of ABN AMRO reported to the Board the status of discussions
with the remaining two potential strategic partners.
During the last two weeks of February 1998 and the first two weeks of March
1998, the two potential strategic partners and their respective representatives
and legal advisors reviewed due diligence documents and had numerous discussions
with senior management of the Company.
During the week of March 9, 1998, representatives of ABN AMRO indicated to
each of the potential strategic partners that, although no determination had
been made to sell the Company, the Company was willing to consider proposals
related to potential transactions with the Company and requested that proposals
be submitted on March 12, 1998. On March 12, 1998, the Company received and
initially evaluated proposals from the two parties. After the Company further
reviewed the proposals with its legal and financial advisors at a Board meeting
on March 13, 1998, the Company's financial and legal advisors contacted the
parties to clarify and discuss their proposals and resolve due diligence items
which remained open. On March 23, 1998, ABN AMRO contacted the two parties to
solicit revised proposals on March 24, 1998. After receiving and evaluating
revised proposals on March 24, 1998, ABN AMRO contacted the interested parties
to solicit their best proposals by March 26, 1998.
On March 26, 1998, a meeting of the Board was held in Chicago. After a
presentation by ABN AMRO to the Board, the terms of the proposed transactions
and related merger agreements were presented to and reviewed by the Board. The
Board analyzed and discussed the proposed transactions and agreements. Following
the meeting, the Company's financial advisors contacted each of the interested
parties to confirm that both parties had submitted their best and final
proposals. Parent later submitted a revised proposal and the other interested
party advised representatives of ABN AMRO that its previous proposal constituted
its best and final proposal. Negotiations with Parent continued, culminating in
the Company and Parent agreeing upon a form of definitive agreement to be
presented for review by the Board at a meeting scheduled for March 27, 1998.
On March 27, 1998, at a meeting of the Board, the terms of the proposed
transaction with Parent and the Merger Agreement were presented to and reviewed
by the Board. ABN AMRO made a presentation to the Board and delivered its
opinion as to the fairness of the $9.625 per Share cash consideration to be
received in the Offer and the Merger by the holders of outstanding Shares. The
Board analyzed and discussed the Offer, the Merger Agreement and the Merger and
reviewed proposed resolutions related to the transaction. After
16
<PAGE> 19
discussion and further analysis, the Board unanimously recommended that all
holders of Shares accept the Offer and tender their Shares pursuant to the
Offer. With respect to the Merger, the Board unanimously recommended that, if a
shareholder vote is required by applicable law, the shareholders of the Company
vote in favor of approval and adoption of the Merger Agreement and the Merger. A
copy of a press release announcing the transaction has been filed with the
Commission as an exhibit to the Schedule 14D-1 and is incorporated herein by
reference.
In approving the Merger Agreement and the transactions contemplated thereby
and recommending that all holders of Shares tender their Shares pursuant to the
Offer, the Board considered a number of factors including:
(i) the terms of the Merger Agreement;
(ii) presentations by the President and Chief Executive Officer of the
Company and the Company's financial advisors (at such meeting and at
previous Board meetings) regarding the financial condition, results of
operations, capital expenditure needs and business and prospects of the
Company, including the prospects if the Company were to remain independent;
(iii) the results of the process undertaken to identify and solicit
indications of interest from third parties to enter into a strategic
transaction with the Company;
(iv) the trading price of the Shares over the last three years and
that the $9.625 per Share Offer price represents a premium of approximately
50% over the closing sales price for the Shares on the Nasdaq National
Market on March 26, 1998, the last trading day prior to the date of
execution of the Merger Agreement;
(v) the presentation of ABN AMRO at the March 26 and March 27, 1998
Board meetings and the opinion of ABN AMRO to the effect that, as of the
date of the opinion, the $9.625 per Share cash consideration to be received
by the holders of the Shares in the Offer and the Merger is fair to such
holders, from a financial point of view; a copy of the opinion of ABN AMRO
is contained in the Schedule 14D-9;
(vi) that the Merger Agreement permits the Company to furnish
nonpublic information and access in response to unsolicited proposals by
third parties pursuant to confidentiality agreements, and to participate in
discussions and negotiations with any third party making a proposal to
submit an Acquisition Proposal (as hereinafter defined) to the Company, if
the Board determines in good faith, after consultation with ABN AMRO or
another financial adviser of nationally recognized standing, that such
third party is reasonably likely to submit an Acquisition Proposal which is
a Superior Proposal (as hereinafter defined) and determines in good faith,
based upon advice of outside legal counsel, that the failure to take any of
such actions is reasonably likely to be inconsistent with the Board's
fiduciary duties under applicable law;
(vii) the termination provisions of the Merger Agreement, which were a
condition to Parent's proposal, providing that Parent could be entitled to
(x) a fee of $1.5 million and (y) reimbursement of expenses up to $1.5
million upon the termination of the Merger Agreement under certain
circumstances, including the modification or withdrawal of the Board's
recommendation to the shareholders with respect to the Offer and the
Merger; and
(viii) the Board's belief, based in part on the factors referred to
above, including the significant changes that have occurred in the RTA
furniture industry, that the combined company would have the economies of
scale to make the capital expenditures and achieve the operating
efficiencies required to respond effectively to the needs of customers and
markets and the increased competitiveness of the RTA furniture industry.
The foregoing discussion of the information and factors considered and
given weight by the Board is not intended to be exhaustive. In view of the
variety of factors considered in connection with its evaluation of the Offer,
the Board did not find it practicable to and did not quantify or otherwise
assign relative weights to the specific factors considered in reaching its
determinations and recommendation. In addition, individual
17
<PAGE> 20
members of the Board may have given different weight to different factors. The
Board viewed its position and recommendation as being based on the totality of
the information presented to and considered by it.
MERGER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement.
The summary is qualified in its entirety by reference to the Merger Agreement
which is incorporated herein by reference and a copy of which has been filed
with the Commission as an exhibit to the Schedule 14D-1. The Merger Agreement
may be examined and copies may be obtained at the places and in the manner set
forth in Section 8 of this Offer to Purchase. Capitalized terms used but not
defined in this summary of the Merger Agreement have the meanings given to such
terms in the Merger Agreement.
The Offer. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, the Purchaser will purchase all Shares
validly tendered and not properly withdrawn pursuant to the Offer as soon as
legally permitted after the expiration date of the Offer. The Merger Agreement
provides that, without the prior written consent of the Company, neither the
Purchaser nor Parent may decrease the price per Share, decrease the number of
Shares sought to be purchased in the Offer, or amend any other condition of the
Offer in any manner adverse to the holders of the Shares. The Purchaser shall,
on the terms and subject to the prior satisfaction or waiver of the conditions
of the Offer, accept for payment and pay for the Shares validly tendered as soon
as practicable after it is legally permitted to do so under applicable law;
provided, however, that if, immediately prior to the initial expiration date of
the Offer (as it may be extended), the Shares tendered and not withdrawn
pursuant to the Offer, when added to Shares already owned by the Purchaser and
Parent, equals less than 90% of the outstanding Shares, the Purchaser may extend
the Offer one time for a period not to exceed twenty business days,
notwithstanding that all conditions to the Offer are satisfied as of such
expiration date of the Offer.
Board of Directors. Promptly upon the purchase of Shares by the Purchaser
and from time to time thereafter, the Purchaser shall be entitled to designate
up to such number of directors, rounded up to the next whole number, on the
Board as is equal to the number of directors which is the product of (i) the
total number of directors on the Board (giving effect to the directors
designated by the Purchaser pursuant to this sentence) multiplied by (ii) the
percentage that the aggregate number of Shares beneficially owned by the
Purchaser or any affiliate of the Purchaser following such purchase bears to the
total number of Shares then outstanding. In furtherance thereof, the Company
shall, at such time, promptly take all actions necessary to cause Purchaser's
designees to be elected as directors of the Company including increasing the
size of its Board or securing the resignations of such number of its incumbent
directors, or both. At such time, the Company shall use its best efforts to
cause persons designated by the Purchaser to constitute at least the same
percentage (rounded up to the next whole number) as is on the Board of each
committee of the Board, each board of directors of each of the Company's
subsidiaries and each committee of such board, in each case to the extent
permitted by law. Notwithstanding the foregoing, the Company shall have at least
one independent director until the Effective Time. In the Merger Agreement, the
Company has agreed to promptly take all actions required pursuant to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order to
fulfill its obligations under the Merger Agreement, including mailing to
shareholders the information required by such Section 14(f) and Rule 14f-1 as is
necessary to enable the Purchaser's designees to be elected to the Board. The
Purchaser or Parent will supply the Company and be solely responsible for any
information with respect to either of them and their nominees, officers,
directors and affiliates required by such Section 14(f) and Rule 14f-1.
The Merger. The Merger Agreement provides that, subject to the terms and
conditions thereof and in accordance with the MBCA and the DGCL, at the
Effective Time, the Purchaser will be merged with and into the Company.
Following the Merger, the separate corporate existence of the Purchaser will
cease and the Company will continue as the surviving corporation (the "Surviving
Corporation"). The Merger shall be effected by the filing at the time of Closing
of properly executed Articles of Merger or Certificate of Merger, as
appropriate, or other appropriate documents with the Corporation, Securities and
Land Development
18
<PAGE> 21
Bureau of the Michigan Department of Corporations and Industries Services and
the Secretary of State of the State of Delaware.
The Merger Agreement provides that, at the Effective Time, by virtue of the
Merger and without any action on the part of Parent, the Purchaser, the Company
or the holders thereof the Shares will be converted into the right to receive
the Offer Price in cash, without interest thereon, as soon as is reasonably
practicable upon surrender of the certificate(s) formerly representing such
Shares (other than any Shares owned by the Purchaser or by any affiliate of the
Purchaser or Shares in the treasury of the Company, or in the treasury of any
wholly-owned subsidiary of the Company, which Shares, by virtue of the Merger
and without any action on the part of the holder thereof, shall be cancelled and
retired and shall cease to exist with no payment being made with respect
thereto). At the Effective Time, each share of common stock, par value $.01 per
share, of the Purchaser issued and outstanding immediately prior to the
Effective Time will, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into and become one validly issued, fully
paid and nonassessable share of common stock, par value $1.00 per share, of the
Surviving Corporation.
The Merger Agreement provides that the Articles of Incorporation of the
Purchaser, as in effect immediately prior to the Effective Time, will be the
Articles of Incorporation of the Surviving Corporation, until thereafter amended
in accordance with the provisions thereof and applicable law. The By-Laws of the
Purchaser in effect at the Effective Time will be the By-Laws of the Surviving
Corporation, until thereafter amended in accordance with the provisions thereof
and applicable law.
Vote Required to Approve the Merger. Pursuant to the Merger Agreement, the
Company will, if required by applicable law in order to consummate the Merger,
duly call, give notice of, convene and hold a special meeting of its
shareholders (the "Special Meeting") as soon as practicable following the
acceptance for payment and purchase of Shares by Parent or its affiliates
pursuant to the Offer for the purpose of considering and taking action upon the
Merger Agreement. The Merger Agreement provides that the Company will, if
required by applicable law in order to consummate the Merger, prepare and file
with the Commission a definitive proxy statement (the "Proxy Statement")
relating to the Merger and the Merger Agreement and cause such Proxy Statement
to be mailed to its shareholders, provided that no amendment or supplement to
the Proxy Statement will be made by the Company without consultation with Parent
and its counsel. If the Purchaser acquires at least a majority of the
outstanding Shares, the Purchaser will have sufficient voting power to approve
the Merger, even if no other shareholder votes in favor of the Merger.
The Merger Agreement provides that in the event that the Purchaser acquires
at least 90% of the outstanding Shares pursuant to the Offer, the Tender
Agreements or otherwise, the Purchaser and the Company will take all necessary
and appropriate action to cause the Merger to become effective as soon as
practicable after such acquisition, without a meeting of shareholders of the
Company, in accordance with the MBCA and the DGCL.
Conditions to the Merger. The respective obligations of Parent, the
Purchaser and the Company to consummate the Merger and the transactions
contemplated thereby are subject to the satisfaction, at or before the Effective
Time, of certain conditions, including: (i) if required, the shareholders of the
Company shall have duly approved the transactions contemplated by the Merger
Agreement; (ii) any waiting period applicable to the Merger under the HSR Act
shall have expired or been terminated; (iii) the consummation of the Merger
shall not be restrained, enjoined or prohibited by any order, judgment, decree,
injunction or ruling of a court of competent jurisdiction or any governmental
entity and there shall not have been any statute, rule or regulation enacted,
promulgated or deemed applicable to the Merger by any governmental entity which
prevents the consummation of the Merger; (iv) all authorizations, approvals or
consents required to permit the Merger shall have been obtained; and (v) the
Purchaser or its permitted assignee shall have purchased all Shares validly
tendered and not withdrawn pursuant to the Offer (however, this condition is not
applicable to the obligations of Parent or the Purchaser if the Purchaser fails
to purchase Shares tendered pursuant to the Offer in violation of the terms of
the Merger Agreement or the Offer).
Representations and Warranties. The Merger Agreement contains various
representations of the parties thereto, including representations by the Company
as to, among other things, (i) organization; (ii) capitalization; (iii)
authorization and validity of the Merger Agreement and necessary action;
19
<PAGE> 22
(iv) consents and approvals; (v) SEC reports and financial statements; (vi)
undisclosed liabilities; (vii) absence of certain changes; (viii) disclosure
documents; (ix) employee benefit plans and ERISA; (x) litigation; (xi)
compliance with existing laws; (xii) taxes; (xiii) real property; (xiv)
intellectual property; (xv) contracts; (xvi) environmental laws and regulations;
(xvii) labor matters; (xviii) brokers or finders; (xix) opinion of financial
advisors; (xx) Board recommendation; (xxi) insurance; and (xxii) permits.
Covenants. Pursuant to the Merger Agreement, the Company has covenanted and
agreed that unless Parent shall otherwise agree in writing, the Company shall,
and shall cause each of its subsidiaries to, conduct its operations in the
ordinary and usual course of business consistent with past practice and use all
reasonable efforts to preserve intact their respective business organizations'
goodwill, keep available the services of their respective present officers and
key employees, and preserve the goodwill and business relationships with
suppliers, distributors, customers and others having business relationships with
them. Without limiting the generality of the foregoing, and except as otherwise
permitted by the Merger Agreement or as required by applicable law, rule or
regulation prior to the Effective Time, without the consent of Parent, which
consent shall not be unreasonably withheld, the Company will not, and will cause
each of its subsidiaries not to: (a) amend or propose to amend their respective
charters or bylaws; or split, combine or reclassify their outstanding capital
stock or declare, set aside or pay any dividend or distribution in respect of
any capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for, shares of its
capital stock, except for cash dividends and cash distributions paid by
subsidiaries to other subsidiaries or to the Company; (b) (i) issue or authorize
or propose the issuance of, sell, pledge or dispose of, or agree to issue or
authorize or propose the issuance of, sell, pledge or dispose of, any additional
shares of, or any options, warrants or rights of any kind to acquire any shares
of, their capital stock of any class, any debt or equity securities convertible
into or exchangeable for such capital stock or any other equity related right
(including any phantom stock or stock appreciation rights ("SARs")), other than
any such issuance pursuant to options, warrants, rights or convertible
securities outstanding as of the date of the Merger Agreement; (ii) acquire or
agree to acquire by merging or consolidating with, or by purchasing a
substantial equity interest in or a substantial portion of the assets of, or by
any other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire or agree to
acquire any assets, in each case which are material, individually or in the
aggregate, to the Company and its subsidiaries taken as a whole; (iii) sell
(including by sale-leaseback), lease, pledge, dispose of or encumber any assets
or interests therein, which are material, individually or in the aggregate, to
the Company and its subsidiaries taken as a whole, other than in the ordinary
course of business and consistent with past practice; (iv) incur or become
contingently liable with respect to any material indebtedness for borrowed money
or guarantee any such indebtedness or issue any debt securities or otherwise
incur any material obligation or liability (absolute or contingent) other than
short-term indebtedness in the ordinary course of business and consistent with
past practice; (v) redeem, purchase, acquire or offer to purchase or acquire any
(x) shares of its capital stock or (y) long-term debt other than as required by
governing instruments relating thereto; (vi) other than in the ordinary course
of business, neither the Company nor any Company subsidiary shall modify, amend
or terminate any material contract or agreement to which the Company or any
Company subsidiary is a party or waive, release or assign any material rights or
claims; or (vii) enter into any contract, agreement, commitment or arrangement
with respect to any of the foregoing; (c) enter into or amend any employment,
severance, special pay arrangement with respect to termination of employment or
other arrangements or agreements with any directors, officers or key employees
except for (i) normal salary increases and merit bonuses, (ii) arrangements in
connection with employee transfers or (iii) agreements with new employees, in
each case, in the ordinary course of business and consistent with past practice;
(d) adopt, enter into or amend any, or become obligated under any new bonus,
profit sharing, compensation, stock option, pension, retirement, deferred
compensation, healthcare, employment or other employee benefit plan, agreement,
trust, fund or arrangement for the benefit or welfare of any employee or
retiree, except as required to comply with changes in applicable law occurring
after the date hereof; (e) except as may be required as a result of a change in
law or in generally accepted accounting principles after the date hereof, change
any of the accounting principles or practices used by it; (f) pay, discharge or
satisfy any material claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent or otherwise), other than the payment,
discharge or satisfaction in the ordinary course of business of liabilities
reflected or reserved against in, or contemplated by,
20
<PAGE> 23
the financial statements (or the notes thereto) of the Company incurred in the
ordinary course of business consistent with past practice; (g) authorize, commit
to or make any equipment purchases or capital expenditures other than in the
ordinary course of business and consistent with past practice (provided, that
such purchases and/or expenditures shall, in the aggregate, be no more than
$250,000) or as set forth in the Merger Agreement; or (h) take or agree to take
any of the foregoing actions or any action that would, or is reasonably likely
to, result in any of its representations and warranties set forth in the Merger
Agreement becoming untrue, or in any of the conditions to the Merger Agreement
set forth in the Merger Agreement not being satisfied.
No Solicitations. The Company has agreed that it will not, and will cause
any officers, directors, employees and investment bankers, attorneys or other
agents retained by the Company or any of its subsidiaries not to, (i) directly
or indirectly solicit, initiate or knowingly encourage (including by way of
furnishing non-public information), or take any other action knowingly to
facilitate any inquiries or the making of any Acquisition Proposal (as
hereinafter defined), or (ii) except as permitted below, engage in negotiations
or discussions with, or furnish any information or data to any third party
relating to, or that may be reasonably be expected to lead to, an Acquisition
Proposal (other than the transactions contemplated hereby). Notwithstanding
anything to the contrary contained in the Merger Agreement, the Company, and its
officers, directors, investment bankers, attorneys or agents, may: (a)
participate in discussions or negotiations (including, as a part thereof, making
any counterproposal) with or furnish information to any third party making an
unsolicited Acquisition Proposal (a "Potential Acquiror") if: (1) the Board
determines in good faith, after consultation with ABN AMRO or another financial
advisor of nationally recognized standing, that such third party is reasonably
likely to submit an Acquisition Proposal, which is a Superior Proposal (as
hereinafter defined), and (2) the Board determines in good faith, based upon
advice of outside legal counsel, that the failure to participate in such
discussions or negotiations or to furnish such information is reasonably likely
to be inconsistent with the Board's fiduciary duties under applicable law, or
(b) following receipt of an Acquisition Proposal, disclose to its shareholders
the Company's position contemplated by Rules 14d-9 and 14e-2 under the Exchange
Act or otherwise make any other necessary disclosure to its shareholders related
to an Acquisition Proposal.
The Company has agreed that, as of March 27, 1998, it shall immediately
cease and cause to be terminated any existing activities, discussions or
negotiations with any parties (other than the Purchaser and Parent conducted
heretofore with respect to any of the foregoing). The Company has agreed not to
release any third party from any confidentiality or standstill agreement to
which the Company is a party. The Company also has agreed that any non-public
information furnished to a Potential Acquiror will be pursuant to a
confidentiality agreement substantially similar to the confidentiality
provisions of the confidentiality agreement entered into between the Company and
Parent. The Company further has agreed that in the event that the Company shall
receive any Acquisition Proposal, it shall promptly inform Parent in writing as
to the terms of such Acquisition Proposal, and if the Acquisition Proposal is in
writing the Company shall provide the Parent a true and complete copy thereof,
and will keep Parent reasonably informed of the status (including amendments or
proposed amendments) of any such Acquisition Proposal, except to the extent that
the Board determines in good faith, after consultation with its outside legal
counsel, that any such action with respect to a Superior Proposal that by its
terms expressly prohibits any disclosure of the terms of such Superior Proposal
and described in this sentence is reasonably likely to be inconsistent with the
Board's fiduciary duties under applicable law. As used herein, "Acquisition
Proposal" shall mean any bona fide proposal made by a third party to acquire (i)
beneficial ownership (as defined under Rule 13(d) of the Exchange Act) of a 15%
or greater equity interest in the Company pursuant to a merger, consolidation or
other business combination, sale of shares of capital stock, tender offer or
exchange offer or similar transaction involving the Company including, without
limitation, any single or multi-step transaction or series of related
transactions which is structured in good faith to permit such third party to
acquire beneficial ownership of a 15% or greater equity interest in the Company
or (ii) all or a substantial part of the business or assets or any equity
interest in, or voting securities of, of the Company (other than the
transactions contemplated by the Merger Agreement). As used herein, "Superior
Proposal" means any Acquisition Proposal which the Board determines in good
faith, after consultation with ABN AMRO or another financial advisor of
nationally recognized standing, to be
21
<PAGE> 24
more favorable to such party and its shareholders than the transactions
contemplated by the Merger Agreement.
Termination; Fees and Expenses. The Merger Agreement provides that it may
be terminated and the Merger and the other transactions contemplated thereby may
be abandoned at any time prior to the Effective Time, notwithstanding any
requisite approval and adoption of the Merger Agreement and the transactions
contemplated thereby by the shareholders of the Company: (a) by mutual written
consent of the Company, Parent and the Purchaser; (b) by either of the Company,
on the one hand, or Parent and the Purchaser, on the other hand: (i) if the
Effective Time shall not have occurred on or prior to September 30, 1998;
provided, however, that the right to terminate the Merger Agreement under
Section 8.1(b)(i) of the Merger Agreement shall not be available to any party
whose failure to fulfill any obligation under the Merger Agreement has been the
cause of, or resulted in, the failure of the Merger to occur on or prior to such
date; (ii) if there shall have been issued an order, decree or ruling or taken
any other action (which order, decree ruling or other action the parties hereto
shall use their respective best efforts to lift), in each case permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
the Merger Agreement and such order, decree, ruling or other action shall have
become final and non-appealable; provided, however, if the party seeking
termination is Parent, Parent shall have complied fully with its obligations
under Section 6.9 of the Merger Agreement, or (iii) if, at the Special Meeting
(including any adjournment or postponement thereof) called pursuant to the
Merger Agreement, the requisite vote of the shareholders of the Company for the
Merger shall not have been obtained; (c) by the Company: (i) upon two days prior
written notice if the Board shall have (A) withdrawn, modified or changed in a
manner adverse to Parent its approval or recommendation of the Merger Agreement,
the Offer or the Merger or resolved to do any of the foregoing and (B) (x)
determined in good faith, after consultation with a ABN AMRO or another
financial advisor of nationally recognized standing, that a third party has
submitted to the Company an Acquisition Proposal which is a Superior Proposal,
and (y) determined in good faith, upon the advice of outside legal counsel, that
the failure to take such action as set forth in the preceding clause (A) is
reasonably likely to be inconsistent with the Board's fiduciary duties under
applicable law; (ii) if Parent or the Purchaser (x) breaches or fails in any
material respect to perform or comply with any of its material covenants and
agreements contained herein or (y) breaches its representations and warranties
in any material respect and such breach would have a Parent Material Adverse
Effect (as hereinafter defined), in each case such that the conditions set forth
in the Merger Agreement would not be satisfied; provided, however, that if any
such breach is curable by Parent or the Purchaser through the exercise of
Parent's or the Purchaser's best efforts and for so long as Parent or the
Purchaser shall be so using its best efforts to cure such breach, the Company
may not terminate the Merger Agreement pursuant to the Merger Agreement; (iii)
upon approval of the Board, if due to an occurrence or circumstance that would
result in a failure to satisfy any of the conditions set forth in Annex A to the
Merger Agreement, Merger Sub shall have failed to commence the Offer on or prior
to five days following the date of initial public announcement of the Merger
Agreement; provided, however, the Company may not terminate the Merger Agreement
if the Company is at such time in breach of its obligations under the Merger
Agreement; (d) by Parent and the Purchaser: (i) if the Company (x) breaches or
fails in any material respect to perform or comply with any of its material
covenants and agreements contained in the Merger Agreement or (y) breaches its
representations and warranties in any material respect and such breach would
have a Company Material Adverse Effect (as hereinafter defined), in each case
such that the conditions set forth in the Merger Agreement would not be
satisfied; provided, however, that if any such breach is curable by the Company
through the exercise of the Company's best efforts and for so long as the
Company shall be so using its best efforts to cure such breach, Parent and the
Purchaser may not terminate the Merger Agreement pursuant to the Merger
Agreement; (ii) if the Board shall have withdrawn, modified or changed in a
manner adverse to Parent its approval or recommendation of the Merger Agreement,
the Offer or the Merger or shall have recommended an Acquisition Proposal
involving the Company or shall have executed an agreement in principal or
definitive agreement relating to an Acquisition Proposal involving the Company
or similar business combination with a person or entity other than Parent or its
affiliates (or the Board resolves to do any of the foregoing); or (iii) if due
to an occurrence or circumstance that would result in a failure to satisfy any
condition set forth in Annex A to the Merger Agreement, the Purchaser shall have
failed to commence the Offer on or prior to five days following the initial
public announcement of the Merger Agreement; provided,
22
<PAGE> 25
however, Parent and the Purchaser may not terminate the Merger Agreement
pursuant to the Merger Agreement if Parent or the Purchaser is at such time in
breach of its obligations under the Merger Agreement. As used herein, "Company
Material Adverse Effect" and "Parent Material Adverse Effect" mean any material
adverse change in or effect on the business, financial condition or results of
operations of the Company and its subsidiaries taken as a whole, with respect to
"Company Adverse Material Effect", or of Parent and its subsidiaries taken as a
whole, with respect to "Parent Material Adverse Effect"; provided, however, that
the effects of changes that are generally applicable to (i) the North American
RTA furniture industry, (ii) the United States economy, or (iii) the United
States securities markets shall in each case be excluded from such
determination; and provided, further that any adverse effect on the Company and
its subsidiaries, or Parent and its subsidiaries, as the case may be, resulting
from the execution of the Merger Agreement and the announcement of the Merger
Agreement and the transactions contemplated thereby shall also be excluded from
such determination.
In the event of the termination of the Merger Agreement, written notice
thereof shall forthwith be given to the other party or parties specifying the
provision thereof pursuant to which such termination is made, and the Merger
Agreement shall forthwith become null and void, and there shall be no liability
on the part of Parent, the Purchaser or the Company or their respective
directors, officers, employees, shareholders, representatives, agents or
advisors other than, with respect to Parent, the Purchaser and the Company, the
obligations pursuant to the Merger Agreement. Nothing contained in the Merger
Agreement shall relieve Parent, the Purchaser or the Company from liability for
willful breach of the Merger Agreement.
If the Merger Agreement is terminated: (A) by either Parent and the
Purchaser or the Company pursuant to clause (b)(iii) above or by Parent and the
Purchaser pursuant to clause (d)(i) above and any person (other than Parent or
any of its affiliates) shall have made a bona fide Acquisition Proposal to the
Company that becomes disclosed to the public prior to the Special Meeting, and
within one year after the effective date of such termination the Company is the
subject of a Third Party Acquisition Event (as defined below) with such person,
(B) by the Company pursuant to clause (c)(i) above or (C) by Parent and the
Purchaser pursuant to clause (d)(ii) above, then at the time of termination with
respect to (B) or (C) above or the time of execution of a definitive agreement
regarding such a Third Party Acquisition Event with respect to (A) above, the
Company shall pay to Parent a fee of $1,500,000 in cash (the "Fee") and
reimburse Parent for reasonable out-of-pocket costs incurred by Parent or on
behalf of Parent in connection with the Merger Agreement and the transactions
contemplated hereby up to an amount not to exceed $1,500,000. The Company has
agreed not to enter into any agreement with respect to any Third Party
Acquisition Event which does not, as a condition precedent to the execution of
such agreement, require such reimbursement of expenses and the Fee to be paid to
Parent upon such execution. As used herein, the term "Third Party Acquisition
Event" means either of the following: (A) the Company shall agree to,
consummate, or announce its intention to enter into any agreement relating to,
an Acquisition Proposal; or (B) any person (other than the Company, Parent or
the Purchaser or any affiliate thereof) shall have acquired beneficial ownership
(as such term is defined in Rule 13d-3 under the Exchange Act) or the right to
acquire beneficial ownership of, or a new group has been formed which
beneficially owns or has the right to acquire beneficial ownership of, 15% or
more of the outstanding Shares.
Employee Benefits. The Merger Agreement provides that as of the Effective
Time, the Company's Employee Stock Ownership and Savings Plan and Trust
Agreement (the "Company ESOP") will be amended to provide that the Company ESOP
will be frozen with respect to participation and benefit accrual in the part of
the Company ESOP that is an employee stock ownership plan and that no further
contributions will be made to or distributions will be made from such portion of
the Company ESOP; provided, however, that immediately prior to the Effective
Time, the Company shall make a pro rata contribution to the Company ESOP in
respect of the plan year, which plan year shall be deemed to have ended at the
Effective Time, in accordance with the terms of the Company ESOP and applicable
law. The amendment to the Company ESOP will further provide that following the
Effective Time, each participant in the Company ESOP will be entitled to direct
the investment of the balance in his or her Company ESOP account into one or
more of the investment alternatives provided under the 401(k) portion of the
Company ESOP (other than Shares), in accordance with the terms of the Company
ESOP and applicable law.
23
<PAGE> 26
The Merger Agreement further provides that as of the Effective Time and for
a two-year period thereafter, the Company and any of its subsidiaries and
successors shall provide their employees with employment benefits substantially
similar in the aggregate to the benefits they received prior to the Effective
Time. Any employment agreements between the Company, its subsidiaries and their
employees will continue to be honored after the Effective Time.
Indemnification; Directors' and Officers' Insurance. From and after the
Effective Time, the Surviving Corporation shall indemnify, defend and hold
harmless any person who is now, or has been at any time prior to the date
hereof, or who becomes prior to the Effective Time, an officer, director,
employee and agent (the "Indemnified Party") of the Company and its subsidiaries
against all losses, claims, damages, liabilities, costs and expenses (including
attorney's fees and expenses), judgments, fines, losses, and amounts paid in
settlement in connection with any actual or threatened action, suit, claim,
proceeding or investigation (each a "Claim") to the extent that any such Claim
is based on, or arises out of, (i) the fact that such person is or was a
director, officer, employee or agent of the Company or any of its subsidiaries
or is or was serving at the request of the Company or any of its subsidiaries as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, or (ii) the Merger Agreement, or any
of the transactions contemplated thereby, in each case to the extent that any
such Claim pertains to any matter or fact arising, existing, or occurring prior
to or at the Effective Time, regardless of whether such Claim is asserted or
claimed prior to, at or after the Effective Time, to the full extent permitted
under Michigan law or the Company's Articles of Incorporation, By-laws or
indemnification agreements in effect at the date hereof, including provisions
relating to advancement of expenses incurred in the defense of any action or
suit; provided, however, that the Surviving Corporation shall not be liable for
any settlement effected without its written consent (which consent shall not be
unreasonably withheld). Without limiting the foregoing, in the event any
Indemnified Party becomes involved in any capacity in any Claim, then from and
after the Effective Time, the Surviving Corporation shall periodically advance
to such Indemnified Party its legal and other expenses (including the cost of
any investigation and preparation incurred in connection therewith), subject to
the provision by such Indemnified Party of an undertaking to reimburse the
amounts so advanced in the event of a final non-appealable determination by a
court of competent jurisdiction that such Indemnified Party is not entitled
thereto. The Indemnified Parties as a group may retain only one law firm with
respect to each related matter except to the extent there is or is reasonably
likely to be, in the opinion of counsel to the Indemnified Party, under
applicable standards of professional conduct, a conflict on any significant
issue between positions of any two or more Indemnified Parties.
The Merger Agreement provides that the Surviving Corporation shall maintain
the Company's existing officers' and directors' liability insurance policy ("D&O
Insurance") for a period of not less than six years after the Effective Time;
provided, however, that in no event shall the Surviving Corporation be required
to expend in any one year an amount in excess of 150% of the last annual premium
paid by the Company for such insurance and if the annual premiums exceed such
amount, the Surviving Corporation shall be obligated to obtain a policy with the
greatest coverages available for a cost not exceeding such amount; provided,
further, the Surviving Corporation may substitute therefor policies of
substantially similar coverage and amounts containing terms no less advantageous
to such former directors or officers with respect to acts or omissions occurring
prior to the Effective Time or individual coverage and provided, that such
substitution shall not result in any gaps or lapses in coverage with respect to
acts or omissions occurring prior to the Effective Time; provided, further, if
the existing D&O Insurance expires, is terminated or cancelled during such
period, the Surviving Corporation will use its best efforts to obtain
substantially similar D&O Insurance.
Parent, the Purchaser and the Company have also agreed that in the event
the Company or the Surviving Corporation or any of their respective successors
or assigns (i) consolidates with or merges into any other person and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers or conveys all or substantially all of its properties
and assets to any person, then and in each such case, proper provision shall be
made so that the successors and assigns of the Company, shall assume the
foregoing indemnity obligations and none of the actions described in clauses (i)
or (ii) shall be taken until such provision is made.
24
<PAGE> 27
Access to Information. The Company has agreed that, upon reasonable notice,
the Company shall (and shall cause each of its subsidiaries to) afford to Parent
and its officers, employees, accountants, counsel, financing sources and other
representatives, access, during normal business hours during the period prior to
the earlier of the Effective Time or the date of termination of the Merger
Agreement, to all its properties, books, contracts, commitments and records and,
during such period, the Company shall (and shall cause each of its subsidiaries
to) furnish promptly to Parent (a) a copy of each report, schedule, registration
statement and other documents filed or received by it during such period
pursuant to the requirements of federal securities laws and (b) all other
information concerning its business, properties and personnel as Parent may
reasonably request; provided, however, that nothing herein shall require the
Company or any of its subsidiaries to disclose any information to Parent if such
disclosure would be in violation of applicable laws or regulations of any
Governmental Entity or the provisions of any confidentiality agreement to which
the Company is a party.
Options; Stock Plans. The Merger Agreement provides that the Company will
not issue any additional options or SARs. Each option held by an employee,
officer or director of the Company and other eligible holders to acquire Shares
that is outstanding immediately prior to the Merger, whether or not then vested
or exercisable, shall, simultaneously with the Merger, be cancelled in exchange
for a single lump sum cash payment equal to the product of (1) the number of
Shares subject to such Option and (2) the excess, if any, of the Offer Price
over the exercise price per share of such Option, subject to any required
withholding of taxes. Each SAR held by an employee, officer or director of the
Company that is outstanding immediately prior to the Merger, whether or not then
vested or exercisable, shall, simultaneously with the Merger, shall be cancelled
in exchange for a single lump sum cash payment equal to the product of (1) the
number of SARs held by such employee, officer or director and (2) the excess, if
any, of the Offer Price over $4.00, the fair market value on the date the SARs
were granted. Prior to the Effective Time, if necessary, the Company has agreed
to use all reasonable efforts to (i) obtain consents from appropriate holders of
Options and SARs and (ii) make any amendments to the terms of such Options,
SARs, or the compensation plans or arrangements related thereto that are
necessary to give effect to the transactions contemplated above. Notwithstanding
any foregoing provision, payment may be withheld in respect of any Option or SAR
until necessary or appropriate consents are obtained.
TENDER AGREEMENTS
The following is a summary of the material terms of the Tender Agreements.
This summary is qualified in its entirety by reference to the Tender Agreements,
each of which is incorporated herein by reference and a form of which has been
filed with the Commission as an exhibit to the Schedule 14D-1. The Tender
Agreements may be examined and a copy of each may be obtained at the place and
in the manner set forth in Section 8 of this Offer to Purchase.
Tender of Shares. On the terms and subject to the conditions set forth in
the Tender Agreements, each of the Director Shareholders will (i) tender the
Shares owned by him into the Offer promptly, and in any event no later than the
fifth business day following the commencement of the Offer, or, if the
Shareholder has not received the offer documents by such time, within two
business days following receipt of such documents, and (ii) not withdraw any
Shares so tendered (except in the event the Stock Option (as hereinafter
defined) is exercised). The Director Shareholders will receive the same price
per Share received by other shareholders of the Company in the Offer with
respect to Shares tendered by them in the Offer.
Grant of Stock Option. On the terms and subject to the conditions set
forth in the Tender Agreements, each Director Shareholder has granted to Parent
an irrevocable option (the "Stock Option") to purchase the Shares owned by such
Director Shareholder at a price per Share equal to the Offer Price (subject to
additional payments in certain limited circumstances as described below),
exercisable at any time, in whole only, if on or after March 27, 1998: (i) any
corporation, partnership, individual, trust, unincorporated association, or
other entity or "person" (as defined in Section 13(d)(3) of the Exchange Act)
other than Parent or any of its "affiliates" (as defined in the Exchange Act) (a
"Third Party"), will have (A) commenced or announced an intention to commence a
bona fide tender offer or exchange offer for any shares of Common Stock, the
consummation of which would result in "beneficial ownership" (as defined in the
Exchange Act) by such Third Party (together with all such Third Party's
affiliates and "associates" (as defined in the Exchange Act))
25
<PAGE> 28
of 35% or more of the then outstanding voting equity of the Company (either on a
primary or a fully diluted basis), (B) acquired beneficial ownership of shares
of Common Stock that, when aggregated with any shares of Common Stock already
owned by such Third Party, its affiliates and associates, would result in the
aggregate beneficial ownership by such Third Party, its affiliates and
associates of 15% or more of the then outstanding voting equity of the Company
(either on a primary or a fully diluted basis), provided, however, that "Third
Party" for purposes of this clause (B) does not include any corporation,
partnership, person, other entity or group that beneficially owns more than 15%
of the outstanding voting equity of the Company (either on a primary or a fully
diluted basis) as of the date hereof and that does not, after the date hereof,
increase such ownership percentage by more than an additional 1% of the
outstanding voting equity of the Company (either on a primary or a fully diluted
basis), (C) acquired assets constituting 15% or more of the total assets or
earning power of the Company taken as a whole or (D) entered into an agreement
with the Company that contemplates the acquisition of (1) assets constituting
15% or more of the total assets or earning power of the Company taken as a whole
or (2) beneficial ownership of 15% or more of the outstanding voting equity of
the Company; or (ii) the Board shall have withdrawn, or modified or changed in a
manner adverse to Parent its approval or recommendation of the Merger Agreement
under certain circumstances that would allow the Company to terminate the Merger
Agreement (after the passage of the applicable notice period but without the
necessity of the Company having terminated the Merger Agreement).
In the event that Parent or the Purchaser exercises the Stock Option and
subsequent to such exercise either (i) Parent or the Purchaser pays
consideration in excess of the Offer Price for the Shares pursuant to the Merger
(a "Higher Price"), or (ii) (A) a third party commences a bona-fide tender offer
or exchange offer for Shares for consideration in excess of the Offer Price (the
"Excess Consideration"), (B) the Company terminates the Merger Agreement under
certain circumstances where the Board shall have withdrawn, or modified or
changed in a manner adverse to Parent its approval or recommendation of the
Merger Agreement, (C) prior to such termination, but after receiving notice of
the Company's intention to so terminate, Parent or the Purchaser exercises the
Stock Option and (D) Parent or the Purchaser tenders the Shares it received upon
the exercise of the Stock Option in such tender offer or exchange offer and
receives Excess Consideration with respect to such Shares, then, in the case of
clause (i) above, Parent or the Purchaser shall pay to each Director Shareholder
in cash, within five days after Parent or the Purchaser pays the Higher Price to
holders of Shares, an amount equal to the applicable number of Shares multiplied
by the difference between the Higher Price and the Offer Price, and, in the case
of clause (ii) above, Parent or the Purchaser shall pay to each Director
Shareholder in cash, within five days after Parent or the Purchaser receives the
Excess Consideration, an amount equal to the applicable number of Shares
multiplied by the difference between the Excess Consideration and the Offer
Price.
Conditions to Closing. Each Director Shareholder's obligation to sell the
Shares owned by him upon exercise of the Stock Option and such Shareholder's
obligations under the provisions described in the following paragraph are
subject (at such Director Shareholder's election) to the further conditions that
there will have been no material breach of the representations, warranties,
covenants or agreements of Parent or the Purchaser contained in the applicable
Tender Agreement or contained in the Merger Agreement, which breach has not been
cured within ten business days of the receipt of written notice thereof from the
Director Shareholder.
Voting Agreement; Proxy. Pursuant to the Tender Agreements, each of the
Director Shareholders agreed that, so long as such Tender Agreements are in
effect, at any meeting (whether annual or special and whether or not an
adjourned or postponed meeting) of the holders of Common Stock, however called,
or in connection with any written consent of the holders of Common Stock, such
Director Shareholder will appear at the meeting or otherwise cause the Shares
owned by such Director Shareholder to be counted as present thereat for purposes
of establishing a quorum and vote or consent (or cause to be voted or consented)
such Shares (i) in favor of the Merger and (ii) against any action or agreement
that would impede, interfere with or prevent the Merger, including any other
extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Company and a third party or any other proposal of a
third party to acquire the Company and (iii) if requested by Parent, in favor of
a shareholder resolution proposed by Parent in accordance with applicable
provisions of the MBCA the purpose of which is to cause the Offer and the Merger
26
<PAGE> 29
to be consummated and which does not relate to the election of directors. Each
of the Director Shareholders irrevocably granted to, and appointed, Parent and
any nominee thereof, his proxy and attorney-in-fact (with full power of
substitution) during the term of the applicable Tender Agreement, for and in the
name, place and stead of such Director Shareholder, to vote the Shares owned by
such Director Shareholder, or grant a consent or approval in respect of such
Shares, in connection with any meeting of the shareholders of the Company (i) in
favor of the Merger and (ii) against any action or agreement that would impede,
interfere with or prevent the Merger, including any other extraordinary
corporate transaction, such as a merger, reorganization or liquidation involving
the Company and a third party or any other proposal of a third party to acquire
the Company. Such proxy and power of attorney is irrevocable and coupled with an
interest and is intended to be irrevocable in accordance with the provisions of
Section 422 of the MBCA and Section 212 of the DGCL. Pursuant to the applicable
Tender Agreement, each Director Shareholder also represented that all proxies
theretofore given by such Director Shareholder in respect of the Director
Shareholder's Shares, if any, are not irrevocable, and revoked all such proxies
given with respect to such Shares.
Certain Representations and Warranties. In connection with the Tender
Agreements, the Director Shareholders each made certain customary
representations and warranties, including with respect to (i) ownership of the
Director Shareholder's Shares and the absence of encumbrances on and in respect
of such Shares, (ii) the Director Shareholder's authority to enter into and
perform his obligations under the applicable Tender Agreement, (iii) the absence
of conflicts and requisite governmental consents and approvals, and (iv) the
absence of any broker, finder or investment banker relationship with respect to
the transactions contemplated by the applicable Tender Agreement. In connection
with the Tender Agreements, each of Parent and the Purchaser made certain
customary representations and warranties to the Director Shareholders, including
with respect to (i) authority to enter into and perform its obligations under
the applicable Tender Agreement, (ii) absence of conflicts and requisite
governmental consents and approvals, and (iii) the absence of any broker, finder
or investment banker relationship with respect to the transactions contemplated
by the Tender Agreements.
Certain Covenants. Pursuant to the Tender Agreements, each Director
Shareholder covenanted and agreed that, except as contemplated by such Agreement
and except pursuant to the Offer, the Director Shareholder will not offer to
sell, sell, pledge or otherwise dispose of or transfer any interest in or
encumber with any lien any of the Shares owned by such Director Shareholder, and
will not (i) enter into any contract, option or other agreement or understanding
with respect to any transfer of any or all of such Shares or any interest
therein, (ii) grant any proxy, power-of-attorney or other authorization or
consent in or with respect to such Shares, (iii) deposit such Shares into a
voting trust or enter into a voting agreement or arrangement with respect to
such Shares or (iv) take any other action with respect to such Shares that would
in any way restrict, limit or interfere with the performance of the Director
Shareholder's obligations under the applicable Tender Agreement. Pursuant to the
Tender Agreements, each Director Shareholder also agreed that he will notify
Parent immediately if any proposals are received by, any information is
requested from, or any negotiations or discussions are sought to be initiated or
continued with the Director Shareholder or his attorneys, accountants or other
agents (each of such actions, an "Interest"), in each case in connection with
any Acquisition Proposal indicating, in connection with such notice, the name of
the person indicating such Interest and the terms and conditions of any related
proposals or offers. The Director Shareholders also agreed to cease immediately
and cause to be terminated immediately any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal. In addition, each Director Shareholder agreed to keep
Parent informed, on a current basis, of the status and terms of any Acquisition
Proposal and to use his best efforts to ensure that his attorneys, accountants
and other agents do not, directly or indirectly: (i) initiate, solicit or
encourage, or take any action to facilitate the making of, any offer or proposal
that constitutes or is reasonably likely to lead to any Acquisition Proposal,
(ii) enter into any agreement with respect to any Acquisition Proposal or (iii)
in the event of an unsolicited written proposal in respect of an Acquisition
Proposal, engage in negotiations or discussions with, or provide any information
or data to, any person (other than Parent, any of its affiliates or
representatives and except for information that has been previously publicly
disseminated by the Company) relating to any Acquisition Proposal. Nothing in
the Tender Agreements shall be construed to prohibit any Director Shareholder
from taking any action solely in his capacity as a member of the Board to the
extent specifically permitted by the Merger Agreement or as required by
applicable law.
27
<PAGE> 30
Termination. Except as otherwise specifically provided therein, all
obligations under the Tender Agreements terminate on the earliest of (a) the
date the Merger Agreement is terminated in accordance with its terms or the date
the Offer is terminated by Parent or the Purchaser as a result of any failure of
a condition of the Offer; provided, however, that the provisions relating to the
Stock Option shall not terminate until 60 days thereafter (or such later time as
permitted by such provisions) if the Merger Agreement was terminated pursuant to
Section 8.1(c)(i) thereof, (b) the purchase of all the Shares subject to the
Stock Option pursuant to the Offer or pursuant to the Stock Option, or (c) on
September 30, 1998.
Except as described herein or incorporated herein by reference, to the
knowledge of the Company as of the date hereof, there are no material contracts,
agreements, arrangements or understandings or any actual or potential conflicts
of interest between the Company or its affiliates and the Purchaser, its
executive officers, directors or affiliates.
12. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY; OTHER MATTERS.
The purpose of the Offer, the Merger, the Merger Agreement and the Tender
Agreements is for Parent to acquire control of, and the entire equity interest
in, the Company. Upon consummation of the Merger, the Company will become an
indirect wholly-owned subsidiary of Parent. The Offer is intended to increase
the likelihood that the Merger will be effected.
Plans for the Company
Parent is conducting a detailed review of the Company and its assets,
corporate structure, capitalization, operations, properties, policies,
management and personnel and will consider, subject to the terms of the Merger
Agreement, what, if any, changes would be desirable in light of the
circumstances which exist upon completion of the Offer. Such changes could
include changes in the Company's business, corporate structure, charter, bylaws,
capitalization, Board, management or dividend policy, although, except as noted
in this Offer to Purchase, Parent has no current plans with respect to any of
such matters.
Except as described in this Offer to Purchase, neither Parent nor the
Purchaser has any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of assets, involving
the Company or any material changes in the Company's corporate structure,
business or composition of its management and personnel.
Other Matters
Shareholder Approval. Under the MBCA and the Company's Restated Articles of
Incorporation, the approval of the Board, and the affirmative vote of the
holders of a majority of the outstanding Shares, including the Shares held by
Purchaser and its affiliates, are required to approve and adopt the Merger
Agreement and the transactions contemplated thereby, including the Merger.
The Board has unanimously approved the Offer, the Merger and the Merger
Agreement and the transactions contemplated thereby. Unless the Merger is
consummated pursuant to the short-form merger provisions under the MBCA
described below (in which case no further corporate action by the shareholders
of the Company will be required to complete the Merger), the only remaining
required corporate action of the Company will be 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.
Short Form Merger. Under Section 711 of the MBCA, if the Purchaser acquires
at least 90% of the outstanding Shares, the Purchaser will be able to approve
the Merger without a vote of the Company's shareholders. In such event, the
Purchaser anticipates that it will take all necessary and appropriate action to
cause the Merger to become effective as soon as reasonably practicable after
such acquisition without a meeting of the Company's shareholders. If the
Purchaser does not acquire at least 90% of the outstanding Shares pursuant to
the Offer or otherwise, a significantly longer period of time may be required to
effect the Merger, because a vote or the consent of the Company's shareholders
would be required under the MBCA.
28
<PAGE> 31
Pursuant to the Merger Agreement, the Company has agreed to take all action
necessary under the MBCA and its Restated Articles of Incorporation and Bylaws
to convene a meeting of its shareholders promptly following consummation of the
Offer to consider and vote on the Merger, if a shareholders' vote is required.
If the Purchaser owns a majority of the outstanding Shares, approval of the
Merger can be obtained without the affirmative vote of any other shareholder of
the Company.
Appraisal Rights. No appraisal rights are available in connection with the
Offer.
Rule 13e-3. The Merger would have to comply with any applicable federal law
operative at the time. Rule 13e-3 under the Exchange Act is applicable to
certain "going private" transactions. The Purchaser does not believe that Rule
13e-3 will be applicable to the Merger. 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 shareholders in such a transaction, be filed
with the Commission and disclosed to minority shareholders prior to consummation
of the transaction.
13. DIVIDENDS AND DISTRIBUTIONS.
As described above, the Merger Agreement provides that the Company shall
not, between the date of the Merger Agreement and the Effective Time, without
the prior written consent of Parent, (a) issue or authorize or propose the
issuance of, sell, pledge or dispose of, or agree to issue or authorize or
propose the issuance of, sell, pledge or dispose of, any additional shares of,
or any options, warrants or rights of any kind to acquire any shares of, its
capital stock of any class, any debt or equity securities convertible into or
exchangeable for such capital stock or any other equity related right (including
any phantom stock or SARs), other than any such issuance pursuant to options,
warrants, rights or convertible securities outstanding as of the date of the
Merger Agreement; or (b) redeem, purchase, acquire or offer to purchase or
acquire any (x) shares of its capital stock or (y) long-term debt other than as
required by governing instruments relating thereto.
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Purchaser shall not
be required to accept for payment or pay for any Shares tendered pursuant to the
Offer, and may terminate or amend the Offer and may postpone the acceptance for
payment of and payment for, Shares tendered, if (i) the Minimum Condition shall
not have been satisfied, (ii) any applicable waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer
or (iii) at any time on or after the date of the Merger Agreement, and prior to
the acceptance for payment of Shares, any of the following conditions shall
exist:
(a) there shall have been instituted or be pending any action or
proceeding before any court or governmental, administrative or regulatory
authority or agency, domestic or foreign, (i) challenging or seeking to
make illegal, materially delay or otherwise directly or indirectly restrain
or prohibit or make materially more costly the making of the Offer, the
acceptance for payment of, or payment for, any Shares by Parent, the
Purchaser or any other affiliate of Parent, or the consummation of any
other transaction contemplated by the Merger Agreement, or seeking to
obtain material damages in connection with any transaction contemplated by
the Merger Agreement; (ii) seeking to prohibit or limit materially the
ownership or operation by the Company, Parent or any of their subsidiaries
of all or any material portion of the business or assets of the Company,
Parent or any of their subsidiaries, or to compel the Company, Parent or
any of their subsidiaries to dispose of or hold separate all or any
material portion of the business or assets of the Company, Parent or any of
their subsidiaries, as a result of the transactions contemplated by the
Merger Agreement; (iii) seeking to impose or confirm limitations on the
ability of Parent, the Purchaser or any other affiliate of Parent to
exercise effectively full rights of ownership of any Shares, including,
without limitation, the right to vote any Shares acquired by the Purchaser
pursuant to the Offer or otherwise on all matters properly presented to the
Company's shareholders, including, without limitation, the approval and
adoption of the Merger Agreement and the transactions contemplated thereby;
(iv) seeking to require divestiture by Parent, the Purchaser or any other
affiliate of Parent of any Shares; or (v) which otherwise has a Parent
Material Adverse Effect;
29
<PAGE> 32
(b) there shall have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to (i) Parent, the Company or any subsidiary or affiliate of
Parent or the Company or (ii) any transaction contemplated by the Merger
Agreement, by any legislative body, court, government or governmental,
administrative or regulatory authority or agency, domestic or foreign,
other than the routine application of the waiting period provisions of the
HSR Act to the Offer or the Merger, which is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses
(i) through (v) of paragraph (a) above;
(c) there shall have occurred any change, condition, event or
development that has a Company Material Adverse Effect; provided, however,
that no event, change or effect that primarily results from the Merger
Agreement, the Merger, the Offer and the transactions contemplated thereby
with the announcement thereof shall be deemed individually or in the
aggregate a Company Material Adverse Effect;
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the Nasdaq National
Market for the Company for a period in excess of 24 hours (excluding
suspensions or limitations resulting solely from physical damage or
interference with such exchange not related to market conditions), (ii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States or Canada, (iii) any limitation
(whether or not mandatory) by any government or governmental,
administrative or regulatory authority or agency, domestic or foreign, on,
or other event that, in the reasonable judgment of the Purchaser, might
affect, the extension of credit by banks or other lending institutions,
(iv) a commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States
or Canada or (v) in the case of any of the foregoing existing on the date
of the Merger Agreement, a material acceleration or worsening thereof;
(e) (i) it shall have been publicly disclosed or the Purchaser shall
have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under the
Exchange Act) of 15% or more of the then outstanding Shares has been
acquired by any person, other than Parent or any of its affiliates or (ii)
the Board or any committee thereof shall have withdrawn or modified in a
manner adverse to Parent or the Purchaser the approval or recommendation of
the Offer, the Merger or the Merger Agreement, or approved or recommended
any takeover proposal or any other acquisition of Shares other than the
Offer and the Merger;
(f) any representation or warranty of the Company in the Merger
Agreement which is qualified as to materiality shall not be true and
correct or any such representation or warranty that is not so qualified
shall not be true and correct in any material respect, in each case as if
such representation or warranty was made as of such time on or after the
date of the Merger Agreement (except for a representation or warranty which
references a particular date);
(g) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement;
(h) the Merger Agreement shall have been terminated in accordance with
its terms; or
(i) the Purchaser and the Company shall have agreed in writing that
the Purchaser shall terminate the Offer or postpone the payment for Shares
thereunder;
which, in the sole judgment of the Purchaser in any such case, and regardless of
the circumstances (including any action or inaction by Parent or any of its
affiliates) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Purchaser and
Parent and may be asserted by the Purchaser or Parent regardless of the
circumstances giving rise to any such condition or may be waived by the
Purchaser or Parent in whole or in part at any time and from time to time in
their sole discretion. The failure
30
<PAGE> 33
by Parent or the Purchaser at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right; the waiver of any such right
with respect to particular facts and other circumstances shall not be deemed a
waiver with respect to any other facts and circumstances; and each such right
shall be deemed an ongoing right that may be asserted at any time and from time
to time.
15. CERTAIN LEGAL MATTERS.
Except as described in this Section 15, based on information provided by
the Company, none of the Company, the Purchaser or Parent is aware of any
license or regulatory permit that appears to be material to the business of the
Company and its subsidiaries, taken as a whole, that might be adversely affected
by the Purchaser's acquisition of Shares as contemplated herein or of any
approval or other action by a domestic or foreign governmental, administrative
or regulatory agency or authority that would be required or desirable for the
acquisition and ownership of the Shares by the Purchaser as contemplated herein.
Should any such approval or other action be required or desirable, the Purchaser
and Parent presently contemplate that such approval or other action will be
sought, except as described below under "State Takeover Laws." While, except as
otherwise described in this Offer to Purchase, the Purchaser does not presently
intend to delay the acceptance for payment of or payment for Shares tendered
pursuant to the Offer pending the outcome of any such matter, 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 failure to obtain
any such approval or other action might not result in consequences adverse to
the Company's business or that certain parts of the Company's business might not
have to be disposed of or other substantial conditions complied with in the
event that such approvals were not obtained or such other actions were not taken
or in order to obtain any such approval or other action. If certain types of
adverse action are taken with respect to the matters discussed below, the
Purchaser could decline to accept for payment or pay for any Shares tendered.
See Section 14 for certain conditions to the Offer, including conditions with
respect to governmental actions.
(a) State Takeover Laws. The Company is incorporated under the laws of the
State of Michigan. No Michigan takeover statute or similar statute or
regulation, including without limitation Sections 775 to 784 and Sections 790 to
799 of the MBCA, imposes restrictions materially adversely affecting (or
materially delaying) the consummation of the Offer or the Merger or would, as a
result of the Offer, the Merger, the transactions contemplated thereby or the
acquisition of securities of the Company or the Surviving Corporation by Parent
or the Purchaser, (A) restrict or impair the ability of Parent to vote, or
otherwise to exercise the rights of a shareholder with respect to, securities of
the Company or the Surviving Corporation that may be acquired or controlled by
Parent or (B) entitle any shareholder to acquire securities of the Company or
the Surviving Corporation on a basis not available to Parent.
A number of other states throughout the United States have enacted takeover
statutes that purport, in varying degrees, to be applicable to attempts to
acquire securities of corporations that are incorporated or have assets,
shareholders, executive offices or places of business in such states. In Edgar
v. MITE Corp., the Supreme Court of the United States held that the Illinois
Business Takeover Act, which involved state securities laws that made the
takeover of certain corporations more difficult, imposed a substantial burden on
interstate commerce and therefore was unconstitutional. In CTS Corp. v. Dynamics
Corp. of America, however, the Supreme Court of the United States held that a
state may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without prior approval of the remaining shareholders, provided that
such laws were applicable only under certain conditions.
(b) Antitrust. The Offer and the Merger are subject to the HSR Act, which
provides that certain acquisition transactions may not be consummated unless
certain information has been furnished to the Antitrust Division of the
Department of Justice (the "Antitrust Division") and the Federal Trade
Commission (the "FTC") and certain waiting period requirements have been
satisfied.
Parent and the Company expect to file their Notification and Report Forms
with respect to the Offer under the HSR Act on or about April 7, 1998. The
waiting period under the HSR Act with respect to the Offer will expire at 11:59
p.m., New York City time, on the 15th day after the date Parent's form is filed
unless
31
<PAGE> 34
early termination of the waiting period is granted. However, the Antitrust
Division or the FTC may extend the waiting period by requesting additional
information or documentary material from Parent. If such a request is made, such
waiting period will expire at 11:59 p.m., New York City time, on the tenth day
after substantial compliance by Parent with such request. Only one extension of
the waiting period pursuant to a request for additional information is
authorized by the HSR Act. Thereafter, such waiting period may be extended only
by court order or with the consent of Parent. In practice, complying with a
request for additional information or material can take a significant amount of
time. In addition, if the Antitrust Division or the FTC raises substantive
issues in connection with a proposed transaction, the parties frequently engage
in negotiations with the relevant governmental agency concerning possible means
of addressing those issues and may agree to delay consummation of the
transaction while such negotiations continue. The Purchaser will not accept for
payment Shares tendered pursuant to the Offer unless and until the waiting
period requirements imposed by the HSR Act with respect to the Offer have been
satisfied. See Section 14.
As discussed below, the HSR Act requirements with respect to the Merger
will not apply if certain conditions are met. In particular, the Merger may not
be consummated until 30 calendar days after receipt by the Antitrust Division
and the FTC of the Notification and Report Forms of both Parent and the Company
unless the Purchaser acquires 50% or more of the outstanding Shares pursuant to
the Offer (which would be the case if the Minimum Condition were satisfied) or
the 30-day period is earlier terminated by the Antitrust Division and the FTC.
Within such 30-day period, the Antitrust Division or the FTC may request
additional information or documentary materials from Parent and/or the Company.
The Merger may not be consummated until 20 days after such requests are
substantially complied with by both Parent and the Company. Thereafter, the
waiting periods may be extended only by court order or with the consent of
Parent and the Company.
The FTC and the Antitrust Division periodically review the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of Shares
pursuant to the Offer and the Merger. At any time before or after the
Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take
such action under the antitrust laws as it deems necessary or desirable in the
public interest, including seeking to enjoin the acquisition of Shares pursuant
to the Offer or otherwise or seeking divestiture of Shares acquired by the
Purchaser or divestiture of substantial assets of Parent or its subsidiaries.
Private parties, as well as state governments, may also bring legal action under
the antitrust laws under certain circumstances. Based upon an examination of
publicly available information relating to the businesses in which Parent and
the Company are engaged, Parent and the Purchaser believe that the acquisition
of Shares by the Purchaser will not violate the antitrust laws. Nevertheless,
there can be no assurance that a challenge to the Offer or other acquisition of
Shares by the Purchaser on antitrust grounds will not be made or, if such a
challenge is made, of the result. See Section 14 for certain conditions to the
Offer, including conditions with respect to litigation and certain governmental
actions.
(c) Federal Reserve Board Regulations. Regulations U and X (the "Margin
Regulations") of the Federal Reserve Board restrict the extension or maintenance
of credit for the purpose of buying or carrying margin stock, including the
Shares, if the credit is secured directly or indirectly by margin stock. Such
secured credit may not be extended or maintained in an amount that exceeds the
maximum loan value of all the direct and indirect collateral securing the
credit, including margin stock and other collateral. All financing for the Offer
will be in full compliance with the Margin Regulations.
16. FEES AND EXPENSES.
The Purchaser has retained Innisfree M&A Incorporated to act as the
Information Agent and Harris Trust Company of New York to act as the Depositary
in connection with the Offer. Such firms each will receive reasonable and
customary compensation for their services. The Purchaser has also agreed to
reimburse each such firm for certain reasonable out-of-pocket expenses and to
indemnify each such firm against certain liabilities and expenses in connection
with their services, including certain liabilities under the federal securities
laws.
32
<PAGE> 35
The Purchaser will not pay any fees or commissions to any broker or dealer
or other person (other than the Information Agent) for soliciting tenders of
Shares pursuant to the Offer. Brokers, dealers, banks and trust companies will
be reimbursed by the Purchaser for customary mailing and handling expenses
incurred by them in forwarding material to their customers.
17. MISCELLANEOUS.
The Offer is being made to all holders of Shares other than the Company.
The Purchaser is not aware of any jurisdiction in which the making of the Offer
or the tender of Shares in connection therewith would not be in compliance with
the laws of such jurisdiction. If the Purchaser becomes aware of any
jurisdiction in which the making of the Offer would not be in compliance with
applicable law, the Purchaser will make a good faith effort to comply with any
such law. If, after such good faith effort, the Purchaser cannot comply with any
such law, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares residing 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 shall be deemed to be made on
behalf of the Purchaser by one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of Parent or the Purchaser not contained herein or in
the Letter of Transmittal and, if given or made, such information or
representation must not be relied upon as having been authorized.
The Purchaser and Parent have filed with the Commission the Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act furnishing certain additional
information with respect to the Offer. The Schedule 14D-1 and any amendments
thereto, including exhibits, may be examined and copies may be obtained from the
offices of the Commission in the manner set forth in Section 8 of this Offer to
Purchase (except that they will not be available at the regional offices of the
Commission).
HORIZON ACQUISITION, INC.
April 3, 1998
33
<PAGE> 36
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments and business addresses thereof for the past five years of each
director and executive officer of Parent. Unless otherwise indicated, the
current business address of each person is 4750 Boulevard des Grandes Prairies,
St. Leonard, Quebec, Canada H1R 2A3. Unless otherwise indicated, each such
person is a citizen of Canada and has held his or her present position as set
forth below, or has been an executive officer at Parent, for the past five
years. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to employment with Parent.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION AND
NAME FIVE YEAR EMPLOYMENT HISTORY
---- --------------------------------
<S> <C>
Martin Schwartz................ President of Parent
Jeff Segel..................... Vice-President, Sales and Marketing of Parent
Alan Schwartz.................. Vice-President, Operations of Parent
Jeffrey Schwartz............... Vice-President, Finance of Parent
Frank Rana..................... Treasurer of Parent
Nick Costides.................. President of Cosco
(United States citizen)
Richard Jackson................ President of Charleswood
(United States Citizen)
Robert Klassen................. Chief Operating Officer of Ridgewood since 1995 Prior to
1995, Mr. Klassen spent over sixteen years in operations at
various retail industry corporations.
Douglas Crozier................ Chief Operating Officer of Dorel Home Products division
since 1994. Prior to 1994, Mr. Crozier was Division
President at BPCO, a division of EMCO Limited, a distributor
of home building products.
David Cytrynbaum............... President of Leadra since 1993. Prior to 1993, Mr.
Cytrynbaum was owner and manager of Carol Ann Furniture Ltd.
Kees Spreeuwenberg............. Managing Director of Maxi-Miliaan. Prior to 1993, Mr
(Citizen of the Netherlands) Spreeuwenberg spent 13 years with Rothman's, a tobacco
company.
Michael Silberstein............ President of Infantino
(United States citizen)
Michael Caplan................. Managing Director of Dorel U.K. (since 1996). Prior to 1996,
(Citizen of United Kingdom) Mr. Caplan was managing director of Write On Demand and
Stylus Music Limited.
Dr. Laurent Picard............. Director of Parent, Retired Professor of McGill University
and a director of The Jean Coutu Group (PJC) Inc.
Bruce Kaufman.................. Director of Parent and President of Kaufel Group Ltd.
Maurice Tousson................ Director of Parent and President of Medi-Trust Pharamacy
Inc.
</TABLE>
I-1
<PAGE> 37
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments and business addresses thereof for the past five years of each
director and executive officer of the Purchaser. Unless otherwise indicated, the
current business address of each person is 4750 Boulevard des Grandes Prairies,
St. Leonard, Quebec, Canada H1R 2A3. Unless otherwise indicated, each such
person is a citizen of Canada, and each occupation set forth opposite an
individual's name refers to employment with the Purchaser.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION AND
NAME FIVE YEAR EMPLOYMENT HISTORY
---- --------------------------------
<S> <C>
Martin Schwartz................ President of the Purchaser. President of Parent.
Jeffrey Schwartz............... Treasurer of the Purchaser. Vice President, Finance of
Parent.
</TABLE>
I-2
<PAGE> 38
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 shareholder 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:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
By Mail: By Hand/Overnight Delivery:
Wall Street Station Receive Window
P.O. Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19th Floor
New York, NY 10005
By Facsimile Transmission:
(212) 701-7636
For Information Telephone:
(212) 701-7624
</TABLE>
Questions or requests for assistance or additional copies of this Offer to
Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be
directed to the Information Agent at its location and telephone numbers set
forth below. Shareholders may also contact their broker, dealer, commercial bank
or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED LOGO
501 Madison Avenue, 20th Floor
New York, New York 10022
Telephone (212) 750-5833
or
CALL TOLL FREE: (888) 750-5834
<PAGE> 1
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED APRIL 3, 1998
BY
HORIZON ACQUISITION, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
DOREL INDUSTRIES INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 30, 1998, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
By Mail: By Hand/Overnight Delivery:
Wall Street Station Receive Window
P.O. Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19th Floor
New York, NY 10005
</TABLE>
By Facsimile Transmission:
(212) 701-7636
For Information Telephone:
(212) 701-7624
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN ONE LISTED ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made by
book-entry transfer to an account maintained by the Depositary at The Depository
Trust Company or the Philadelphia Depository Trust Company (hereinafter
collectively referred to as the "Book-Entry Transfer Facilities") pursuant to
the procedures set forth in Section 2 of the Offer to Purchase (as defined
below). Shareholders who deliver Shares by book-entry transfer are referred to
herein as "Book-Entry Shareholders" and other shareholders are referred to
herein as "Certificate Shareholders."
Shareholders whose certificates are not immediately available or who cannot
deliver their Shares and all other documents required hereby 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 procedure set forth in Section 2 of the Offer to Purchase.
See Instruction 2. Delivery of documents to a Book-Entry Transfer Facility does
not constitute delivery to the Depositary.
<PAGE> 2
[ ] 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
- --------------------------------------------------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number
- --------------------------------------------------------------------------------
Transaction Code Number
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s)
- --------------------------------------------------------------------------------
Window Ticket Number (if any)
- --------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
- --------------------------------------------------------------------------------
Name of Institution which Guaranteed Delivery
- --------------------------------------------------------------------------------
Check Box of Applicable Book-Entry Transfer Facility, if Delivered by
Book-Entry Transfer:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number
- --------------------------------------------------------------------------------
Transaction Code Number
- --------------------------------------------------------------------------------
BOXES ABOVE FOR USE BY ELIGIBLE INSTITUTIONS ONLY
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) CERTIFICATE(S) TENDERED
ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER
CERTIFICATE EVIDENCED BY OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
Total Shares
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by
any certificate(s) delivered to the Depositary are being tendered. See
Instruction 4.
- --------------------------------------------------------------------------------
[ ] CHECK HERE IF YOU CANNOT LOCATE YOUR CERTIFICATE(S) AND REQUIRE ASSISTANCE
IN REPLACING THEM. UPON RECEIPT OF NOTIFICATION BY THIS LETTER OF
TRANSMITTAL, THE COMPANY'S STOCK TRANSFER AGENT WILL CONTACT YOU DIRECTLY
WITH REPLACEMENT INSTRUCTIONS.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to Horizon Acquisition, Inc., a Delaware
corporation (the "Purchaser") and an indirect wholly-owned subsidiary of Dorel
Industries Inc., a Quebec, Canada corporation ("Parent"), the above-described
shares of Common Stock, $1.00 par value per share (the "Common Stock"),
including the associated common share purchase rights (the "Rights," and
together with the Common Stock, the "Shares"), of Ameriwood Industries
International Corporation, a Michigan corporation (the "Company"), pursuant to
the Purchaser's offer to purchase all outstanding Shares at a price of $9.625
per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated April 3, 1998 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, together with the Offer to Purchase, constitute the
"Offer"). The undersigned understands that the Purchaser reserves the right to
transfer or assign, in whole or in part from time to time, to one or more direct
or indirect wholly-owned subsidiaries of Parent, the right to purchase Shares
tendered pursuant to the Offer.
The Company has distributed one Right for each outstanding share of Common
Stock pursuant to the Rights Agreement, dated as of April 4, 1996, as amended,
between the Company and Harris Trust and Savings Bank, as Rights Agent. The
Company has taken all necessary action to make the Rights Agreement inapplicable
to Parent, the Purchaser, and their respective affiliates and associates in
connection with the transactions contemplated by the Merger Agreement and the
Tender Agreements (as such terms are defined in the Offer to Purchase).
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), subject to, and effective upon, acceptance for payment of and
payment for the Shares tendered herewith, the undersigned hereby sells, assigns,
and transfers to, or upon the order of, the Purchaser all right, title and
interest in and to all the Shares that are being tendered hereby (and any and
all other Shares or other securities issued or issuable in respect thereof on or
after April 3, 1998 (collectively, "Distributions")) and irrevocably constitutes
and appoints the Depositary the true and lawful agent and attorney-in-fact of
the undersigned with respect to such Shares and all Distributions, with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to (a) deliver certificates for such Shares and
all Distributions, or transfer ownership of such Shares and all Distributions on
the account books maintained by any of the Book-Entry Transfer Facilities,
together, in any such case, with all accompanying evidences of transfer and
authenticity, to or upon the order of the Purchaser, upon receipt by the
Depositary, as the undersigned's agent, of the purchase price (adjusted, if
appropriate, as provided in the Offer to Purchase), (b) present such Shares and
all Distributions for cancellation and transfer on the Company's books and (c)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares and all Distributions, all in accordance with the terms of the
Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Shares and all Distributions and that, when the same are accepted for payment by
the Purchaser, the Purchaser will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, claims, charges and
encumbrances, and the same will not be subject to any adverse claims. The
undersigned will, upon request, execute any signature guarantees or additional
documents deemed by the Depositary or the Purchaser to be necessary or desirable
to complete the sale, assignment and transfer of the tendered Shares and all
Distributions. In addition, the undersigned shall promptly remit and transfer to
the Depositary for the account of the Purchaser any such Distributions issued to
the undersigned, in respect of the tendered Shares, accompanied by documentation
of transfer, and pending such remittance or appropriate assurance thereof, the
Purchaser shall be entitled to all rights and privileges as owner of any such
Distributions and, subject to the terms of the Merger Agreement (as defined in
the Offer to Purchase), may withhold the entire purchase price or deduct from
the purchase price the amount or value thereof, as determined by the Purchaser
in its sole discretion.
All authority 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.
<PAGE> 4
The undersigned hereby irrevocably appoints Martin Schwartz or Jeffrey
Schwartz, and each of them, and any other designees of the Purchaser, the
attorneys and proxies of the undersigned, each with full power of substitution,
to vote at any annual, special or adjourned meeting of the Company's
shareholders or otherwise act (including pursuant to written consent) in such
manner as each such attorney and proxy or his substitute shall in his sole
discretion deem proper, to execute any written consent concerning any matter as
each such attorney and proxy or his substitute shall in his sole discretion deem
proper with respect to, and to otherwise act with respect to, all the Shares
tendered hereby which have been accepted for payment by the Purchaser prior to
the time any such vote or action is taken (and any and all Distributions issued
or issuable in respect thereof) and with respect to which the undersigned is
entitled to vote. This appointment is effective when and only to the extent that
the Purchaser accepts for payment such Shares as provided in the Offer to
Purchase. This power of attorney and proxy is coupled with an interest in the
tendered Shares, is irrevocable and is granted in consideration of the
acceptance for payment of such Shares in accordance with the terms of the Offer.
Such acceptance for payment shall revoke all prior powers of attorney and
proxies given by the undersigned at any time with respect to such Shares and no
subsequent powers of attorney or proxies may be given by the undersigned (and,
if given, will not be deemed effective). The Purchaser reserves the right to
require that, in order for Shares to be deemed validly tendered, immediately
upon the Purchaser's acceptance for payment of such Shares, the Purchaser must
be able to exercise full voting and other rights with respect to such Shares,
including voting at any meeting of shareholders then scheduled.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer. The
undersigned recognizes that under certain circumstances set forth in the Offer
to Purchase, the Purchaser may not be required to accept for payment any of the
tendered Shares. The Purchaser's acceptance for payment of Shares pursuant to
the Offer will constitute a binding agreement between the undersigned and the
Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price of any Shares purchased, and/or
return any certificates for Shares not tendered or 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 of any Shares
purchased, and/or any certificates for Shares not tendered or accepted for
payment (and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing under "Description of Shares Tendered." In the
event that both the Special Delivery Instructions and the Special Payment
Instructions are completed, please issue the check for the purchase price of any
Shares purchased, and/or return any certificates for Shares not tendered or
accepted for payment in the name(s) of, and mail said check and/or any
certificates to, the person or persons so indicated. In the case of a book-
entry delivery of Shares, please credit the account maintained at the Book-Entry
Transfer Facility indicated above with any Shares not accepted for payment. The
undersigned recognizes that the Purchaser has no obligation pursuant to the
Special Payment Instructions to transfer any Shares from the name of the
registered holder(s) thereof if the Purchaser does not accept for payment any of
the Shares so tendered.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
issued in the name of someone other than the undersigned.
Issue: [ ] Check [ ] Certificate(s) to:
Name -----------------------------------------------
(Please Print)
Address -----------------------------------------------
- --------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------
(Tax Identification or Social Security Number)
(See Substitute Form W-9 Included Herein)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Certificate(s) for Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
delivered to someone other than the undersigned or to the undersigned at an
address other than that appearing under "Description of Shares Tendered."
Deliver: [ ] Check [ ] Certificate(s) to:
Name -----------------------------------------------
(Please Print)
Address -----------------------------------------------
- --------------------------------------------------------
(Include Zip Code)
<PAGE> 5
SHAREHOLDERS SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature(s) of Owner(s))
(MUST BE SIGNED BY REGISTERED HOLDER(S) EXACTLY AS NAME(S) APPEAR(S) ON
STOCK CERTIFICATE(S) OR ON A SECURITY POSITION LISTING OR BY PERSON(S)
AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY CERTIFICATES AND DOCUMENTS
TRANSMITTED HEREWITH. IF SIGNATURE IS BY TRUSTEES, EXECUTORS, ADMINISTRATORS,
GUARDIANS, ATTORNEYS-IN-FACT, OFFICERS OF CORPORATIONS OR OTHERS ACTING IN A
FIDUCIARY OR REPRESENTATIVE CAPACITY, PLEASE SET FORTH FULL TITLE. SEE
INSTRUCTION 5. FOR INFORMATION CONCERNING SIGNATURE GUARANTEES, SEE INSTRUCTION
1.)
Dated: , 1998
------------------------------------------------------------------------
Name(s) ----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print)
Capacity (full title)-----------------------------------------------------------
Address: -----------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Daytime Area Code and Telephone Number --------------------------------
Tax Identification or Social Security Number --------------------------------
- --------------------------------------------------------------------------------
(See Substitute Form W-9 Below)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
AUTHORIZED SIGNATURE ---------------------------------------------------------
Name -------------------------------------------------------------------------
(Please Print)
Title---------------------------------------------------------------------------
Name of Firm ----------------------------------------------------------------
Address: -----------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number ------------------------------------------
Dated: , 1998
------------------------------------------------------------------------
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURE. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm which is a
member of a registered national securities exchange or of the National
Association of Securities Dealers, Inc. ("NASD") or a commercial bank or trust
company having an office or correspondent in the United States which is a
participant in an approved Signature Guarantee Medallion Program (each an
"Eligible Institution," and collectively, "Eligible Institutions"). No signature
guarantee is required on this Letter of Transmittal (i) if this Letter of
Transmittal is signed by the registered holder(s) (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
Shares tendered herewith, unless such holder(s) has completed either the box
entitled "Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the facing page hereto or (ii) if such Shares are tendered for
the account of an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by stockholders either
if certificates for Shares are to be forwarded herewith or if a tender of Shares
is to be made pursuant to the procedures for delivery by book-entry transfer set
forth in Section 2 of the Offer to Purchase. For Shares to be validly tendered
pursuant to the Offer, (i) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees, or
an Agent's Message (as defined in the Offer to Purchase) in the case of a
book-entry delivery, and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of the Depositary's
addresses set forth herein and either certificates or a timely Book-Entry
Confirmation for tendered Shares must be received by the Depositary at one of
such addresses, in each case prior to the Expiration Date (as defined in the
Offer to Purchase), or (ii) the tendering stockholder must comply with the
guaranteed delivery procedure set forth below.
Shareholders whose certificates for Shares 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 the Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedure set forth in Section 2 of the Offer to Purchase. Pursuant to such
procedures, (i) such tender must be made by or through an Eligible Institution,
(ii) a properly completed and duly executed Notice of Guaranteed Delivery
provided by the Purchaser (or facsimile thereof) must be received by the
Depositary prior to the Expiration Date and (iii) the certificates for all
physically tendered Shares, or a Book-Entry Confirmation with respect to all
tendered Shares, together with this properly completed and duly executed Letter
of Transmittal (or facsimile thereof) with any required signature guarantees,
and any other documents required by this Letter of Transmittal, must be received
by the Depositary within three trading days after the date of execution of such
Notice of Guaranteed Delivery, all as provided in Section 2 of the Offer to
Purchase. A "trading day" is any day on which The New York Stock Exchange is
open for business.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, CERTIFICATES FOR
SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY
BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING
SHAREHOLDER AND DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering shareholders, by execution of
this Letter of Transmittal (or 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
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE SHAREHOLDERS ONLY). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
fill in the number of Shares which are to be tendered in the box entitled
"Number of Shares Tendered." In such case, new certificate(s) for the remainder
of the Shares that were evidenced by the old certificate(s) will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the expiration or
termination of the Offer. All Shares represented by certificates delivered to
the Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without 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.
<PAGE> 7
If any 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.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment or certificates for Shares not
tendered or accepted for payment are to be issued to a person other than the
registered owner(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the shares tendered hereby, the certificates evidencing
the Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the registered owner(s)
appear(s) on the certificates for such Shares. Signatures on such certificates
or stock powers must be guaranteed by an Eligible Institution. See Instruction
1.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay, or cause to be paid, any stock transfer taxes with respect
to the transfer and sale of Shares to it or its assignee pursuant to the Offer.
If, however, payment of the purchase price is to be made to, or if certificates
for Shares not tendered or accepted for payment are to be registered in the name
of, any persons 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 stock transfer taxes (whether imposed
on the registered holder or such person) payable on the account of the transfer
to such person will be deducted from the purchase price unless satisfactory
evidence of the payment of such taxes or exemption therefrom is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of and/or certificates for Shares not accepted for payment are to be
returned to 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 a person
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. Any shareholder tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such shareholder at the Book-Entry Transfer Facility from which such transfer
was made.
8. WAIVER OF CONDITIONS. Except as otherwise provided in the Offer to
Purchase, the Purchaser expressly reserves the absolute right in its sole
discretion to waive any of the specified conditions of the Offer or any defect
or irregularity in the tender with regard to any Shares tendered.
9. SUBSTITUTE FORM W-9. The tendering shareholder (or other payee) is
required to provide the Depositary with a correct Taxpayer Identification Number
("TIN"), generally the shareholder's social security or federal employer
identification number, and with certain other information, on Substitute Form
W-9, which is provided under "Important Tax Information" below, and to certify
that the shareholder (or other payee) is not subject to backup withholding. If a
tendering shareholder is subject to backup withholding, he or she must cross out
item (2) of the Certification Box on Substitute Form W-9 before signing such
Form. Failure to provide the information on the Substitute Form W-9 may subject
the tendering shareholder (or other payee) to a $50 penalty imposed by the
Internal Revenue Service and to 31% federal income tax withholding on the
payment of the purchase price. If the tendering shareholder has not been issued
a TIN and has applied for a number or intends to apply for a number in the near
future, he or she should write "Applied For" in the space provided for the TIN
in Part I, sign and date the Substitute Form W-9 and sign and date the
Certificate of Awaiting Taxpayer Identification Number. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN by the time of
payment, the Depositary will withhold 31% of all such payments for surrendered
Shares thereafter until a TIN is provided to the Depositary.
10. LOST OR DESTROYED CERTIFICATES. If any certificate(s) representing
Shares has been lost or destroyed, the shareholder should check the appropriate
box on the front of the Letter of Transmittal. The Company's stock transfer
agent will then instruct such shareholder as to the procedure to be followed in
order to replace the certificate(s). The shareholder will have to post a surety
bond of approximately 2% of the current market value of the stock. This Letter
of Transmittal and related documents cannot be processed until procedures for
replacing lost or destroyed certificates have been followed.
<PAGE> 8
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent at its location set forth below.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY THEREOF)
TOGETHER WITH CERTIFICATES OR A BOOK-ENTRY CONFIRMATION FOR SHARES AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR THE NOTICE OF
GUARANTEED DELIVERY (OR A FACSIMILE COPY THEREOF) MUST BE RECEIVED BY THE
DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under federal income tax law, a shareholder surrendering Shares must
provide the Depositary with his correct TIN on Substitute Form W-9 on this
Letter of Transmittal. If the shareholder is an individual, his TIN is his
social security number. If the correct TIN is not provided, the shareholder may
be subject to a $50 penalty imposed by the Internal Revenue Service and payments
made in exchange for the surrendered Shares may be subject to backup withholding
of 31%.
Certain persons (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding and
reporting requirements. In order for an exempt foreign shareholder to avoid
backup withholding, that person should complete, sign and submit a Form W-8,
Certificate of Foreign Status, signed under penalties of perjury, attesting to
his exempt status. A Form W-8 can be obtained from the Depositary. Exempt
shareholders, other than foreign shareholders, should furnish their TIN, write
"Exempt" on the face of the Substitute Form W-9 and sign, date and return the
Substitute Form W-9 to the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
If federal income tax backup withholding applies, the Depositary is
required to withhold 31% of any payment made to payee. Backup withholding is not
an additional tax. Rather, the federal income tax liability of persons subject
to backup withholding will be reduced by the amount of tax withheld. If backup
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent Federal income tax backup withholding on payments that are made
to a shareholder with respect to Shares purchased pursuant to the Offer, the
shareholder is required to notify the Depositary of his or her correct TIN (or
the TIN of any other payee) by completing the Substitute Form W-9 included in
this Letter of Transmittal certifying (1) that the TIN provided on the
Substitute Form W-9 is correct (or that such payee is awaiting a TIN) and that
(2) the shareholder is not subject to backup withholding because (i) the
shareholder has not been notified by the Internal Revenue Service that the
shareholder is subject to federal income tax backup withholding as a result of a
failure to report all interest and dividends or (ii) the Internal Revenue
Service has notified the shareholder that the shareholder is no longer subject
to federal income tax backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the TIN, generally the
social security number or employer identification number of the record owner of
the Shares. If the Shares are in more than one name or are not in the name of
the actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report. If the tendering shareholder has not been issued a TIN and has
applied for a number or intends to apply for a number in the near future, he or
she should write "Applied For" in the space provided for the TIN in Part I, sign
and date the Substitute Form W-9 and sign and date the Certificate of Awaiting
Taxpayer Identification Number, which appears in a separate box below the
Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is
not provided with a TIN within 60 days, the Depositary will withhold 31% of all
payments of the purchase price until a TIN is provided to the Depositary.
<PAGE> 9
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: HARRIS TRUST COMPANY OF NEW YORK
- -----------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART I--PLEASE PROVIDE YOUR CORRECT TIN IN THE --------------------------------------------
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING Social Security Number
DEPARTMENT OF THE BELOW:
TREASURY OR
INTERNAL REVENUE SERVICE --------------------------------------------
Employer Identification Number
(If awaiting TIN write "Applied For")
---------------------------------------------------------------------------------------------
Payer's Request for PART II--For Payees NOT subject to backup withholding, see the enclosed Guidelines for
Taxpayer Identification Certification of Taxpayer Identification Number on Substitute Form W-9 and complete as
Number (TIN) instructed therein.
- -----------------------------------------------------------------------------------------------------------------------
CERTIFICATION--Under the penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be
issued to me), and
(2) I am not subject to backup withholding because either (a) I am exempt from backup withholding, (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.
CERTIFICATE INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are subject
to backup withholding because of underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding you received another notification from the IRS that
you are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the enclosed
guidelines.) THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN
THE CERTIFICATES REQUIRED TO AVOID BACKUP WITHHOLDING.
- -----------------------------------------------------------------------------------------------------------------------
SIGNATURE _____________________________________________ DATE __________________________ , 199
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND IN BACKUP WITHHOLDING OF 31%
OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
WROTE "APPLIED FOR" IN PART I OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number within sixty (60) days, 31%
of all reportable payments made to me thereafter will be withheld until I
provide a number.
SIGNATURE __________________________ DATE ______________________
<PAGE> 10
Questions and requests for assistance or additional copies of the Offer to
Purchase, Letter of Transmittal and other tender offer materials may be directed
to the Information Agent as set forth below:
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Avenue,
20th Floor
New York, New York 10022
Telephone (212) 750-5833
Call Toll Free: 888-750-5834
<PAGE> 1
EXHIBIT (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer (as
defined below) if certificates for shares of Common Stock, $1.00 par value per
share (the "Common Stock"), including the associated common share purchase
rights (the "Rights," and together with the Common Stock, the "Shares"), of
Ameriwood Industries International Corporation, a Michigan corporation (the
"Company"), are not immediately available, or if the procedure for book-entry
transfer cannot be completed on a timely basis or time will not permit all
required documents to reach the Depositary at the address set forth below prior
to the Expiration Date (as defined in the Offer to Purchase). This form may be
delivered by hand to the Depositary or transmitted by telegram, facsimile
transmission or mail to the Depositary and must include a guarantee by an
Eligible Institution (as defined in the Offer to Purchase). See Section 2 of the
Offer to Purchase.
The Depositary for the Offer is:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
By Mail: By Hand/Overnight Delivery:
Wall Street Station Receive Window
P.O. Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19th Floor
New York, NY 10005
By Facsimile Transmission:
(212) 701-7636
For Information Telephone:
(212) 701-7624
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Horizon Acquisition, Inc., a Delaware
corporation (the "Purchaser"), which is an indirect wholly-owned subsidiary of
Dorel Industries Inc., a Quebec, Canada corporation, upon the terms and subject
to the conditions set forth in the Purchaser's Offer to Purchase dated April 3,
1998 (the "Offer to Purchase"), and the related Letter of Transmittal, receipt
of which is hereby acknowledged, the number of Shares (as such term is defined
in the Offer to Purchase) set forth below, all pursuant to the guaranteed
delivery procedures set forth in Section 2 of the Offer to Purchase.
Number of Shares:
Certificate Nos. (if available):
- ------------------------------------------------------
- ------------------------------------------------------
(Check one box if Shares will be tendered by book-entry transfer)
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Number:
- ------------------------------------------------------
Dated:
- ----------------------------------------, 1998
Name(s) of Record Holder(s):
- ------------------------------------------------------
- ------------------------------------------------------
Please Print
Address(es):
- ------------------------------------------------------
- ------------------------------------------------------
Zip Code
Area Code and Tel. No.:
- ------------------------------------------------------
- ------------------------------------------------------
Signature(s)
Dated:
- --------------------------------------, 1998
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agent's Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares tendered hereby, in
proper form for transfer, or a Book-Entry Confirmation with respect to such
Shares, in any such case together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or an Agent's Message, and any other required documents within three
trading days (as defined in the Offer to Purchase) after the date hereof.
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.
All capitalized terms used herein have the meanings set forth in the Offer to
Purchase.
<TABLE>
<S> <C>
Name of Firm: ------------------------------------- -----------------------------------------------------
Authorized Signature
Address: -------------------------------------------- Name: ----------------------------------------------
Please Print
- -----------------------------------------------------
Zip Code
Area Code and Tel. No.: -------------------------- Title:
-----------------------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES
FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
Dated: __________, 1998
<PAGE> 1
EXHIBIT (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
BY
HORIZON ACQUISITION, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
DOREL INDUSTRIES INC.
AT
$9.625 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 30, 1998, UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Banks, Trust April 3, 1998
Companies and Other Nominees:
We have been engaged by Horizon Acquisition, Inc., a Delaware corporation
(the "Purchaser"), which is an indirect wholly-owned subsidiary of Dorel
Industries Inc., a Quebec, Canada corporation ("Parent"), to act as the
Information Agent in connection with the Purchaser's offer to purchase all
outstanding shares of Common Stock, $1.00 par value per share (the "Common
Stock"), including the associated common share purchase rights (the "Rights,"
and together with the Common Stock, the "Shares"), of Ameriwood Industries
International Corporation, a Michigan corporation (the "Company"), at $9.625 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Purchaser's Offer to Purchase dated
April 3, 1998 (the "Offer to Purchase") and in the related Letter of Transmittal
(which, together with any amendments or supplements thereto, collectively
constitute the "Offer"). Please furnish copies of the enclosed materials to
those of your clients for whom you hold Shares registered in your name or in the
name of your nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase dated April 3, 1998;
2. Letter of Transmittal to be used by shareholders of the Company in
accepting the Offer;
3. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee, with
space provided for obtaining such clients' instructions with regard to
the Offer;
4. Notice of Guaranteed Delivery; and
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
The Offer is conditioned upon, among other things, there having been
validly tendered and not withdrawn prior to the Expiration Date (as defined in
the Offer to Purchase) that number of Shares which, when added to any Shares
already owned by the Purchaser and Parent, represents at least a majority of all
outstanding Shares on a fully diluted basis on the date of purchase.
<PAGE> 2
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay promptly after
the Expiration Date (as defined in the Offer to Purchase) for all shares validly
tendered prior to the Expiration Date and not properly withdrawn as, if and when
the Purchaser gives oral or written notice to the Depositary of the Purchaser's
acceptance of such Shares. 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 a timely Book-Entry Confirmation (as defined in
the Offer to Purchase) with respect thereto), (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase), and (iii) any other documents
required by the Letter of Transmittal.
If holders of Shares wish to tender their Shares, but it is impracticable
for them to deliver their certificates on or prior to the Expiration Date or to
comply with the book-entry transfer procedures on a timely basis, a tender may
be effected by following the guaranteed delivery procedures specified in Section
2 of the Offer to Purchase.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS
PROMPTLY. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, APRIL 30, 1998, UNLESS EXTENDED.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent as described
in the Offer to Purchase) in connection with the solicitation of tenders of
Shares pursuant to the Offer. The Purchaser will, however, upon request,
reimburse brokers, dealers, commercial banks and trust companies for reasonable
and necessary costs and expenses incurred by them in forwarding materials to
their customers. The Purchaser will pay all stock transfer taxes applicable to
its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the
Letter of Transmittal.
Additional copies of the enclosed materials may be obtained by contacting
the Information Agent at its address and telephone numbers set forth on the back
cover of the enclosed Offer to Purchase.
Very truly yours,
Innisfree M&A Incorporated
501 Madison Avenue,
20th Floor
New York, New York 10022
Telephone: (212) 750-5833
or
Call Toll Free (888) 750-5834
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, THE DEPOSITARY, THE
INFORMATION AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION
OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER
NOT CONTAINED IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.
<PAGE> 1
EXHIBIT (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
BY
HORIZON ACQUISITION, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY
OF
DOREL INDUSTRIES INC.
AT
$9.625 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, APRIL 30, 1998, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated April 3, 1998
(the "Offer to Purchase") and the related Letter of Transmittal (which, together
with any amendments or supplements thereto, collectively constitute the "Offer")
relating to the Offer by Horizon Acquisition, Inc., a Delaware corporation (the
"Purchaser"), which is an indirect wholly-owned subsidiary of Dorel Industries
Inc., a Quebec, Canada corporation ("Parent"), to purchase for cash all
outstanding shares of Common Stock, $1.00 par value per share (the "Common
Stock"), including the associated common share purchase rights (the "Rights,"
and together with the Common Stock, the "Shares"), of Ameriwood Industries
International Corporation, a Michigan corporation (the "Company"). We are the
holder of record of Shares held by us for your account. A TENDER OF SUCH SHARES
CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR
INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION
ONLY AND CANNOT BE USED TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
Accordingly, we request your instructions as to whether you wish to tender
any of or all of the Shares held by us for your account upon the terms and
subject to the conditions set forth in the Offer.
Your attention is directed to the following:
1. The offer price is $9.625 per Share, net to the seller in cash, without
interest thereon.
2. The Offer is being made for all outstanding Shares.
3. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
OFFER AND THE MERGER AND DETERMINED THAT TERMS OF THE OFFER AND THE
MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF
THE COMPANY AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES.
4. The Offer and withdrawal rights expire at 12:00 midnight, New York City
time, on Thursday, April 30, 1998, unless extended.
5. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in
the Offer to Purchase) that number of Shares which,
<PAGE> 2
when added to any shares already owned by the Purchaser and Parent,
represents at least a majority of the Shares outstanding on a
fully-diluted basis on the date of purchase.
6. Any stock transfer taxes applicable to a sale of Shares to the
Purchaser pursuant to the Offer will be borne by the Purchaser, except
as otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any of or all of the Shares held by us for
your account, please so instruct us by completing, executing and returning to us
the instruction form attached to this letter. Your instructions to us should be
forwarded promptly to permit us to submit a tender on your behalf prior to the
expiration of the Offer. An envelope to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified on the reverse side of this letter.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal. The Offer is not being made to, nor will tenders be accepted from,
or on behalf of, holders of Shares in any jurisdiction in which the making or
acceptance of the Offer 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 the Purchaser by one or more registered brokers or dealers licensed
under the law of such jurisdiction.
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
The undersigned acknowledge(s) receipt of your letter, the enclosed Offer
to Purchase dated April 3, 1998 and the related Letter of Transmittal, in
connection with the offer by Horizon Acquisition, Inc., a Delaware corporation
and an indirect wholly-owned subsidiary of Dorel Industries Inc., a Quebec,
Canada corporation, to purchase all outstanding shares of common stock, $1.00
par value per share (the "Common Stock"), including the associated common share
purchase rights (the "Rights," and together with the Common Stock, the
"Shares"), of Ameriwood Industries International Corporation, a Michigan
corporation.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in such Offer to Purchase and related Letter of
Transmittal.
Dated: __________, 1998
NUMBER OF SHARES TO BE TENDERED*
______________ SHARES
I (we) understand that if I (we) sign this instruction form without
indicating a lesser number of Shares in the space above, all Shares held by you
for my (our) account will be tendered.
-------------------------------------------------------------------
SIGNATURE(S)
-------------------------------------------------------------------
-------------------------------------------------------------------
PRINT NAME(S)
-------------------------------------------------------------------
-------------------------------------------------------------------
PRINT ADDRESS(ES)
-------------------------------------------------------------------
AREA CODE AND TELEPHONE NUMBER
-------------------------------------------------------------------
TAX ID OR SOCIAL SECURITY NUMBER
- ---------------
* Unless otherwise indicated, it will be assumed that all Shares held by your
firm for my (our) account are to be tendered.
<PAGE> 1
EXHIBIT (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- ------------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
<C> <S> <C>
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, the
first individual on
the account(1)
3. Husband and wife (joint account) The actual owner of
the account or, if
joint funds, either
person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian or The ward, minor, or
committee for a designated ward, incompetent
minor, or incompetent person person(3)
7. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under state law
8. Sole proprietorship account The owner(4)
- ------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ------------------------------------------------------------
<C> <S> <C>
9. A valid trust, estate, or pension The legal entity
trust (Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, school district,
or prison) that receives
agricultural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show your individual name. You may also enter your business name. You may
use either your Social Security number or your Employer Identification
number.
(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> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service (the "IRS") and apply for a
number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
items (1) through (13) and a person registered under the Investment Advisers Act
of 1940 who regularly acts as a broker are exempt. Payments subject to reporting
under sections 6041 and 6041A are generally exempt from backup withholding only
if made to payees described in items (1) through (7), except a corporation that
provides medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information reporting.
Only payees described in items (2) through (6) are exempt from backup
withholding for barter exchange transactions, patronage dividends, and payments
by certain fishing boat operators.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(6) An international organization or any of its agencies or instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- - Payments to nonresident aliens subject to withholding under Section 1441 of
the Code.
- - Payments to partnerships not engaged in a trade or business in the 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 of the Code).
- - Payments described in Section 6049(b)(5) of the Code to non-resident aliens.
- - Payments on tax-free covenant bonds under Section 1451 of the Code.
- - Payments made by certain foreign organizations.
- - Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE 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, SIGN AND DATE THE
FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NON-RESIDENT ALIEN OR A FOREIGN
ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED INTERNAL
REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
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 Sections 6041, 6041A(a), 6045, and 6050A and 6050N
of the Code and the regulations promulgated thereunder.
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 the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold 31%
of taxable interest, dividend, and certain other payments to a payee who does
not furnish a taxpayer identification number to a payer. Certain penalties may
also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
EXHIBIT (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer is made solely by the Offer to
Purchase dated April 3, 1998 and the related Letter of Transmittal and is being
made to all holders of Shares. The Offer is not being made to (nor will tenders
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 or any administrative or judicial action
pursuant thereto. In any jurisdiction where securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Horizon Acquisition, Inc. by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
AT
$9.625 NET PER SHARE
BY
HORIZON ACQUISITION, INC.
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
DOREL INDUSTRIES INC.
Horizon Acquisition, Inc., a Delaware corporation (the "Purchaser"), which is an
indirect wholly-owned subsidiary of Dorel Industries Inc., a Quebec, Canada
corporation ("Parent"), is offering to purchase all outstanding shares of Common
Stock, par value $1.00 per share (the "Common Stock"), including the associated
common share purchase rights (the "Rights" and, together with the Common Stock,
the "Shares"), of Ameriwood Industries International Corporation, a Michigan
corporation (the "Company"), at a price of $9.625 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 April 3, 1998 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, APRIL 30, 1998, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, there being validly tendered
and not withdrawn prior to the expiration of the Offer a number of Shares which,
when added to Shares already owned by the Purchaser and Parent, represents at
least a majority of the Shares outstanding on a fully diluted basis. The Offer
is also subject to other terms and conditions contained in the Offer to
Purchase.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of
March 27, 1998 (the "Merger Agreement"), among Parent, the Purchaser and the
Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with the relevant provisions of the Michigan Business Corporation Act
and the General Corporation Law of the State of Delaware, the Purchaser will be
merged with and into the Company (the "Merger"). Following consummation of the
Merger, the Company will continue as the surviving corporation and will become
an indirect wholly-owned subsidiary of Parent. At the effective time of the
Merger (the "Effective Time"), each Share issued and outstanding immediately
prior to the Effective Time will be cancelled and converted automatically into
the right to receive $9.625 in cash, or any higher price that may be paid per
Share in the Offer, without interest (the "Offer Price").
In connection with the Merger Agreement, Parent entered into Tender and Option
Agreements with certain shareholders of the Company who collectively control
approximately 10% of the outstanding Shares, pursuant to which such shareholders
agreed, among other things, to tender the Shares they own of record in the Offer
and grant an option on such Shares to Parent at the Offer Price.
The Board of Directors of the Company unanimously has determined that each of
the Offer and the Merger is fair to, and in the best interests of, the
shareholders of the Company, and recommends that such shareholders accept the
Offer and tender their Shares pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to the Purchaser and
not withdrawn as, if and when the Purchaser gives oral or written notice to
Harris Trust Company of New York (the "Depositary") of the Purchaser's
acceptance for payment of such Shares. Upon the terms and subject to the
conditions of the Offer, payment for Shares accepted for payment pursuant to the
Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering shareholders for the purpose
of receiving payment from the Purchaser and transmitting payment to tendering
shareholders. In all cases, payment for Shares accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of (i)
certificates for (or a timely Book-Entry Confirmation (as defined in the Offer
to Purchase) with respect to) such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase), and (iii) any other documents
required by the Letter of Transmittal. Under no circumstances will interest be
paid on the purchase price of the Shares, regardless of any extension of the
Offer or any delay in making such payment.
Except as otherwise provided below, tenders of Shares 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 and paid for by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after
Tuesday, June 2, 1998. 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 as set forth in the Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares 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 (as defined in Section 2 of the Offer to Purchase), the signatures
on the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been delivered pursuant to the procedure for book-entry transfer as
set forth in Section 2 of the Offer to Purchase, any notice of withdrawal must
also specify the name and number of the account at the appropriate Book-Entry
Transfer Facility (as defined in the Offer to Purchase) to be credited with the
withdrawn Shares and otherwise comply with such Book-Entry Transfer Facility's
procedures. Withdrawals of tenders of Shares may not be rescinded, and any
Shares properly withdrawn will thereafter be deemed not validly tendered for any
purposes of the Offer. However, withdrawn Shares may be retendered by again
following one of the procedures described in Section 2 of the Offer to Purchase
at any time prior to the Expiration Date. All questions as to the form and
validity (include time of receipt of notices of withdrawal) will be determined
by the Purchaser in its sole discretion, which determination will be final and
binding.
Subject to the terms of the Merger Agreement, the Purchaser expressly reserves
the right, in its sole discretion, at any time or from time to time, to extend
the period of time during which the Offer is open by giving oral or written
notice of such extension to the Depositary.
The information required to be disclosed by paragraph (e)(1)(vii) of Rule 14d-6
under the Securities Exchange Act of 1934, as amended, is contained in the Offer
to Purchase and is incorporated herein by reference.
The Company has supplied to the Purchaser the Company's shareholder lists and
security position listing for the purpose of disseminating the Offer to holders
of Shares. 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, banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the shareholder lists, or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
The Offer to Purchase and the Letter of Transmittal contain important
information that should be read before any decision is made with respect to the
Offer.
Questions and requests for assistance or for copies of the Offer to Purchase,
the Letter of Transmittal and other tender offer documents may be directed to
the Information Agent as set forth below, and copies will be furnished at the
Purchaser's expense. No fees or commissions will be paid by Parent or the
Purchaser to brokers, dealers or other persons other than the Information Agent
for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
501 Madison Avenue, 20th Floor
New York, New York 10022
Telephone: (212) 750-5833
or
Call Toll Free: (888) 750-5834
April 3, 1998
<PAGE> 1
EXHIBIT (a)(8)
DOREL BIDS FOR U.S. RTA MANUFACTURER
AMERIWOOD BOARD RECOMMENDS ACCEPTANCE
MONTREAL, CANADA March 30, 1998--Dorel Industries Inc. (ME/TSE: DII.A;
DII.B) ("Dorel") and Ameriwood Industries International Corporation
(NASDAQ/NMS:AWII) ("Ameriwood") today jointly announced that the two companies
have entered into a definitive merger agreement for the acquisition of Ameriwood
by Dorel. Upon completion of the merger, Ameriwood will become a subsidiary of
Charleswood Corporation, a wholly-owned subsidiary of Dorel.
Under the terms of agreement, Dorel will commence a tender offer no later
than April 3, 1998, to acquire all of the outstanding shares of Ameriwood for
U.S.$9.625 per share in cash. Following the completion of the tender offer,
Dorel will, if necessary, consummate a second step merger in which all remaining
Ameriwood shareholders will also receive U.S.$9.625 per share in cash. The total
purchase price will be approximately U.S.$41.1 million.
The Board of Directors of Ameriwood has approved the transaction and
recommends that Ameriwood shareholders tender their shares in Dorel's offer. In
addition, certain of the directors of Ameriwood, controlling shares representing
approximately 10% on a fully diluted basis of the outstanding shares of
Ameriwood, have agreed to tender their shares in Dorel's offer. Completion of
the tender offer and merger are subject to customary conditions, including the
tender of a majority of Ameriwood's shares and termination of the waiting period
under U.S. anti-trust laws. The tender offer will be made pursuant to definitive
documents to be filed with the Securities and Exchange Commission.
In fiscal 1997, Ameriwood registered sales of U.S.$94.6 million, or
Cdn.$131 million, while Dorel's revenues were U.S.$384.1 million, or Cdn.$531.7
million.
Charles R. Foley, Ameriwood's President and CEO, said, "We are confident
that becoming part of Dorel Industries will enhance Ameriwood's ability to serve
our customers in providing outstanding products and service. Dorel's financial
success demonstrates its strong operational and cost effectiveness. We are also
enthusiastic about the opportunities this combination provides for our dedicated
associates."
Neil L. Diver, Ameriwood's Chairman, also remarked, "We are very pleased
that Ameriwood and its employees will join the successful Dorel
ready-to-assemble ("RTA") companies. We have been particularly impressed with
Dorel's relationships with the mass merchants and we are confident that our
skills will be complementary."
Dorel President and CEO, Martin Schwartz said the offer is yet another
example of the company's disciplined acquisition strategy. "We have been careful
to stick to the areas we know best. Similar past purchases have served the
corporation well. Since RTA is the major contributor to Dorel's profitability
and because of the excellent relationships we enjoy with the mass merchants, we
feel confident this additional market share will further add to our
profitability."
Dorel is a vertically-integrated consumer products manufacturer and
distributor specializing in three product areas: ready-to-assemble ("RTA")
furniture; juvenile furniture and accessories; and home furnishings. Dorel's
products include a wide variety of RTA furniture for home and office use;
juvenile furniture and accessories; and home furnishings as well as a mid-market
line of case goods.
Dorel employs more than 2,900 people in nine countries. Major facilities
include the corporate head office, Dorel Home Products and the Leadra Design
division in Montreal, Quebec; Ridgewood in Cornwall, Ontario; Cosco, Inc. in
Columbus, Indiana; Infantino in San Diego, California and Charleswood
Corporation in Wright City, Missouri. European operations include Dorel (U.K.)
Limited in the United Kingdom and Maxi-Miliaan B.V. in the Netherlands.
Ameriwood is one of the leading U.S. manufacturers of quality RTA. Products
for the home and office account for some 75% of sales. The balance is derived
from custom-manufactured products for customers in
<PAGE> 2
the audio, contract furniture and other specialty businesses. The company owns
two major, fully equipped, modern factories; a 535,000 square foot complex in
Tiffin, Ohio as well as a 500,000 square foot facility in Dowagiac, Michigan.
Ameriwood employs over 700 people.
(Statements contained in this press release which are not historical facts
are forward-looking statements. Such forward-looking statements are necessary
estimates reflecting the best judgement of the party making such statements
based upon current information and involve a number of risks and uncertainties.
Forward-looking statements contained in this press release or in other public
statements of the parties should be considered in light of those factors. There
can be no assurance that such factors or other factors will not affect the
accuracy of such forward-looking statements.)
Ameriwood press contacts: Neil Diver
(415) 721-5511
Seyforth and Associates (Steve Poole)
(616) 776-3511
Dorel Contact: Maison Brison
Rick Leckner
(514) 731-0000
<PAGE> 1
EXHIBIT (b)(1)
[DOREL LETTERHEAD]
February 5, 1998
Canadian Corporate Funding Limited
1010 Sherbrooke Street West
Suite 2210
Montreal, PQ
H3A 2R7
Attention of: Mr. Robert Goulet, Vice-President
RE: USD $30,000,000 UNSECURED LONG-TERM DEBT
Dear Sir,
We are please to confirm our acceptance of the referenced financing with
Teachers Insurance and Annuity Association ("TIAA") and Prudential Capital Corp.
("Prudential"). We understand that TIAA and Prudential's proposal will be
confirmed in writing and remains subject to their satisfactory completion of due
diligence by February 16, 1998. The main terms and conditions regarding the
transaction are detailed below. We also understand that fixing of the rate will
take place on February 6th, 1998 at the proposed mark-up over US Treasury Bonds
bearing a maturity of 7 years.
OTHER CONDITIONS (CONSOLIDATED)
<TABLE>
<S> <C>
Lenders: Teachers Insurance and Annuity Association and
Prudential Capital Corp.
Amount:
- - Teachers Insurance and Annuity Association: $15,000,000
- - Prudential Capital Corp.: $15,000,000
Currency: U.S. dollars
Term: 10 years.
Amortization: 7 year average life.
Rate: 115 basis points over 7 year U.S. Treasury Bonds.
Working Capital Ratio: 1.75 to 1.0.
Maximum Funded Debt/
Tangible Net Worth: 1.10 to 1.0 reducing to 0.85 to 1.0 after
December 31, 1998.
Minimum Tangible Net Worth: $120,000,000 plus 50% of annual net income.
Capital Expenditures Limit: None.
Priority Secured Debt: Not more than 20% of Tangible Net Worth.
Asset Sale Limitation: 15% of Net Book Value.
Restricted Investments: No limit as long as in same line of business.
Change of Control: 50% + 1 vote.
Other: Cross default with other Funded Debt.
</TABLE>
<PAGE> 2
In the course of TIAA and Prudential's due diligence, we will provide
confirmation of the Banks Syndicate's Offer to Finance, the terms of which shall
be acceptable to both. We will also provide Allstate's written confirmation of
their release of a USD $12,500,000 Secured Loan that will become unsecured and
rank on a pari-passu basis with TIAA and Prudential's proposed financing.
Yours truly,
DOREL INDUSTRIES INC.
By: /s/ JEFFREY SCHWARTZ
----------------------------------
Jeffrey Schwartz
Vice-President, Finance
<PAGE> 3
PRUDENTIAL LETTERHEAD
February 11, 1998
Dorel Industries Inc.
4750 Des Grandes Prairies
Montreal, Quebec, Canada H1R 1A3
Attn: Mr. Jeffrey Schwartz
Dear Mr. Schwartz:
I am pleased to confirm Prudential's agreement in principle, subject to the
conditions set forth below, to purchase $15,000,000 principal amount of 6.75%
Senior Notes due 2007 (the "Notes") of Dorel Investments LP, guaranteed by Dorel
Industries Inc. and Dorel's primary US operating companies. The Notes will have
a final maturity of 10 years and an average life of approximately 7 years.
Interest is payable semi-annually. The proceeds will be used to refinance
existing debt and for working capital.
Prudential's purchase of these securities would be subject to (a)
authorization of such purchase by the Credit Committee of Prudential Capital
Group and (b) the satisfaction of Prudential's Law Department with the
documentation, proceedings and legal opinions incident to the proposed
transaction.
We intend to retain the law firm of Hebb & Gitlin to act as our special US
counsel, and Smith, Lyons to act as our special Canadian counsel in connection
with the proposed transaction. We understand that the fees, charges and
disbursements of our special counsel will be paid by the company whether or not
the proposed transaction is consummated.
Very truly yours,
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ KEVIN J. KRASKA
Kevin J. Kraska
Vice President
Accepted and Agreed to:
DOREL INDUSTRIES INC.
By: /s/ JEFFREY SCHWARTZ
<PAGE> 4
TEACHERS INSURANCE AND ANNUITY ASSOCIATION LETTERHEAD
February 10, 1998
Jeffrey Schwartz
Vice President -- Finance
Dorel Industries Inc.
4750 des Grandes Prairies
Montreal, Quebec
Canada H1R 1A3
Re: $30,000,000 Senior Guaranteed Notes due 2008 (TIAA Portion: $15,000,000)
Gentlemen:
In reference to the above captioned Notes, you hereby agree to pay, or at
the option of Teachers Insurance and Annuity Association of America ("TIAA"), to
reimburse TIAA for all reasonable out-of-pocket expenses incurred in connection
with the anticipated closing of this transaction including, without limitation,
fees and expenses of our special counsel (including local counsel) (each of whom
will also act as counsel for the other purchasers of the Notes), and printing
costs, whether or not this transaction is consummated.
To signify your agreement to pay such expenses, please execute this letter
by having it signed by a duly authorized officer and return an executed
counterpart to TIAA, attention: Carmen M. Di Sunno, Securities Division.
Very truly yours,
TEACHERS INSURANCE AND
ANNUITY ASSOCIATION OF AMERICA
By: /s/ LOREN S. ARCHIBALD
Loren S. Archibald
Managing Director -- Private
Placements
Accepted and agreed to:
DOREL INDUSTRIES INC.
By: /s/ JEFFREY SCHWARTZ
Jeffrey Schwartz
<PAGE> 1
EXHIBIT (b)(2)
SUMMARY OF TERMS AND CONDITIONS
DOREL INVESTMENT L.P.
US$33,000,000
UNSECURED GUARANTEED REVOLVING CREDIT FACILITY
<TABLE>
<S> <C>
I. PARTIES.
Borrower: Dorel Investment L.P.
Guarantors: Dorel Industries, Inc. and its material subsidiaries
(the "Guarantors").
Arranger & Agent: Royal Bank of Canada (the "Agent").
Lenders: A syndicate of banks acceptable to the Borrower and
the Agent (and including the Agent as a "Lender").
Agent's Commitment: The Facility will be arranged on a best-efforts basis.
II. TYPE, AMOUNT AND TERMS OF THE FACILITY.
Facility: US$33,000,000 Unsecured Guaranteed Revolving Credit
Facility.
Maturity: Two years from closing.
Purpose: For working capital borrowings and general corporate
purposes.
Front End Fee: One basis point per million of commitment, payable to
each Lender at closing, calculated on each Lender's
respective allocation. Allocations to be jointly
agreed upon by the Agent and the Borrower.
Arrangement Fee: US$25,000, payable to the Agent on the earlier of
closing and March 31, 1998.
Administrative Fee: US$10,000 per annum, payable to the Agent upon
execution of the documentation and thereafter annually
in advance on each anniversary thereof.
Commitment Fee: Payable quarterly in arrears on the average daily
unused amount of under the Facility on the basis of a
360-day year at a rate determined by reference to the
Pricing Grid attached hereto.
Interest Rates: LIBOR Loans will bear interest at LIBOR plus a margin
determined by reference to the Pricing Grid attached
hereto. Base Rate Loans will bear interest at the Base
Rate.
III. GENERAL PROVISIONS.
Borrowing Options: (i) LIBOR Loans with Interest Periods of one, two,
three or six months, subject to three business days'
notice, not to extend beyond the maturity date
of this Facility. Other Interest Periods at the
Lenders' option, subject to availability.
(ii) Same-day Base Rate Loans, subject to notice
received no later than 11:00 AM New York City time on
the day of drawdown, not to extend beyond the
maturity date of this Facility.
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
Interest Computation and Payment: Interest on LIBOR Loans shall be calculated on the
basis of the actual number of days elapsed over a
360-day year, payable at the end of Interest Periods
or quarterly, whichever is earlier. Interest on Base
Rate Loans shall be calculated on the basis of the
actual number of days elapsed over a 365/366-day year,
payable on the last day of each calendar month.
Default Interest: In the event of failure to pay principal or interest,
additional interest shall be payable on all
outstandings at a rate per annum of 2% above the
otherwise applicable interest rate.
Prepayments: The Borrower may, upon five business days' notice,
prepay without penalty all or a portion of Loans
outstanding under the Facility subject to a minimum
principal amount of US$500,000 with increments of
US$100,000, provided that LIBOR Loans prepaid at any
time other than on the last day of an Interest Period
shall be subject to reimbursement of the break-funding
costs of the Lenders.
IV. DOCUMENTATION AND CERTAIN CONDITIONS.
Documentation will contain clauses customary to
facilities of this mature including but not limited to
the following:
Conditions Precedent to Effectiveness & (i) Delivery of documentation, including
Initial Borrowing: satisfactory guaranties and legal opinions.
(ii) Certified copies of corporate resolutions,
corporate and governmental authorizations and
incumbency certificate.
(iii) Accuracy of representation and warranties.
(iv) No Event of Default.
(v) No change in the financial condition of the
Borrower or any Guarantor which would materially
adversely affect the ability of the Borrower or
such Guarantor to perform all of its obligations
under the documentation.
(vi) Repayment and cancellation of existing U.S.
revolving credit facility.
Conditions Precedent to Each Borrowing: (i) No Default or Event of Default has occurred and
is continuing or would arise immediately after giving
effect to or as a result of such Borrowing.
(ii) All representations and warranties are true and
correct.
Representations and Warranties: The Borrower and the Guarantors will make
representations and warranties which, inter alia, will
include the following (subject to satisfactory
documentation):
(i) The Borrower and the Guarantors are entities
duly organized and existing.
(ii) Corporate / partnership and government
authorizations including enforceability and government
approvals have been acquired and are in good
standing.
(iii) The Execution of the documentation will not
materially conflict with any other existing corporate
/ partnership or legal documents.
(iv) The Facility will rank pari passu with all
other indebtedness of the Borrower.
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
(v) Financial information was prepared in accordance
with GAAP and no material adverse change has occurred
since September 30, 1997.
(vi) The Borrower and the Guarantors are in
compliance with all environmental laws and there are
no material actions or proceeding which could
result in a material adverse effect.
(vii) No material litigation or contingent
liabilities except as previously disclosed.
(viii) No existing defaults with respect to any
material agreements.
(ix) No default or events of default under the
Facility have occurred and are continuing.
(x) The Borrower and the Guarantors are in
compliance with ERISA.
(xi) All subsidiaries of the Borrower or Dorel
Industries, Inc., direct or indirect, including
percentage of ownership and jurisdiction of
incorporation, are listed in a separate
schedule to the Agreement.
(xii) Full disclosure.
V. COVENANTS AND EVENTS OF DEFAULT.
Financial Covenants: To be calculated quarterly based on consolidated
financial statements of Dorel Industries, Inc.:
(i) Minimum current ratio of 1.75 to 1.00.
(ii) Maximum Funded Debt to Tangible Net Worth Ratio
of 1.10 to 1.00, to be reduced to .85 to 1.00 after
December 31, 1998.
(iii) Minimum EBITDA/Interest Ratio of 3:1.
(iv) Minimum Tangible Net Worth of US$120,000,000
plus 50% of cumulative annual net income.
Other Covenants: (i) Finish financial information 60 days after the
end of each of the first three quarters and 120 days
after the end of each fiscal year for the
Borrower and Dorel Industries, Inc.
(ii) Maintain existence in good standing.
(iii) Conduct business in compliance with all laws
and regulations.
(iv) Maintenance of property insurance for each
material subsidiary.
(v) Pay all taxes.
(vi) Right of the Lenders to inspect property, books
and records.
(vii) Notification of environmental matters.
(viii) Notice of default or Event of Default.
Negative Covenants: (i) Negative pledge.
(ii) Limitation on indebtedness.
(iii) Limitation on contingent obligations.
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
(iv) Limitation on liens.
(v) Limitation on loans, advances and investments.
(vi) Limitation on fundamental changes.
(vii) Limitation on sales of assets.
(viii) Limitation on dividends.
(ix) Limitation on capital expenditures.
(x) Limitation on hedging agreements.
(xi) Limitation on modifications of debt
instruments.
(xii) Limitation on transactions with affiliates.
(xiii) Limitation on sale-leasebacks.
(xiv) Limitation on changes in fiscal year.
(xv) Limitation on lines of business.
Events of Default: (i) Non-payment of interest, fees, or principal or
other amounts under this Facility.
(ii) Cross default to other material agreements and
indebtedness.
(iii) Change of control.
(iv) Representations and warranties not true and
correct.
(v) Violation of covenants.
(vi) Material judgments.
(vii) Bankruptcy or insolvency of Borrower or any
Guarantors.
VI. OTHER TERMS.
Successors and Assigns: Lenders shall be permitted to assign and sell loan
participations, subject, in the case of assignments
(other than to an affiliate, another Lender or a
Federal Reserve Bank), to the consent of the Borrower,
the Agent (where applicable), which shall not be
unreasonably withheld. Minimum assignment amount is
US$5,000,000. The Agent shall be paid an assignment
fee (which shall be paid by the assigning Bank or its
assignee) in the amount of US$3,500 for each
assignment.
Amendments and Waivers: Any provision may be amended or waived with consent of
the Borrower and the Majority Lenders, provided that
all Lenders must consent to changes (i) in the amount
of principal, interest or fees payable, (ii) to the
date of repayment of any loan or interest or fees
applicable to any loan, (iii) in the definition of
Majority Lenders, and (iv) in guaranties.
Expenses: The Borrower shall pay all reasonable expenses,
including all legal fees incurred by the Agent's
counsel relating to documentation and expenses
incurred by the Agent in connection with the
preparation, negotiation, documentation, syndication
and operation of the credit agreements and all such
reasonable expenses of the Agent and the Lenders
relating to the enforcement of their rights under the
credit agreements whether or not any amounts are
advanced under the Facility.
Reserve, Capital, Indemnity and Borrower will reimburse the Lenders for any increased
Tax Provisions: costs which are incurred as a result of regulatory
changes or if reserve costs are imposed.
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
In addition, Lenders which are obliged to comply with
capital adequacy regulations imposed after execution
of the documentation reserve the right to seek
reimbursement of additional costs which are incurred
as a result. Such claims must arise as a result of a
change in the regulations and not solely because of a
change in the internal interpretation by a Lender of
the regulations. The Borrower may opt to prepay or
replace the individual Lenders concerned.
All payments by the Borrower under the Facility will
be made free and clear of all present and future
taxes, withholdings or deductions of whatever nature.
The Borrower will also be responsible for due payment
of any levies, imposts, duties or charges incurred in
connection with this Facility.
Governing Law: Law of the State of New York.
Counsel: To be determined.
Jurisdiction/Waiver of Jury Trial: Non-exclusive jurisdiction will be vested in U.S.
federal and N.Y. state courts in New York. The parties
will waive rights to jury trial with respect to the
Facility.
Clear Market: This offer will be subject to there being no other
transactions of a similar nature for the Borrower
being syndicated among two or more banks until
execution of the Documentation.
Change in Circumstances: This offer is subject to there being, in the
reasonable opinion of the Agent, no material adverse
change in the financial markets and no material
adverse change in the financial condition of the
Borrower or any Guarantor since that shown in its most
recent public financial statements, prior to execution
of the documentation.
Indemnity: The Borrower will indemnify the Agent and the Lenders
against all losses, liabilities, damages and costs in
connection with any proceeding relating to the
Facility including but not limited to reasonable
attorneys' fees and settlement costs (except to the
extent resulting from the indemnitees' gross
negligence or willful misconduct).
</TABLE>
NOTE: THIS IS A SUMMARY TERM SHEET AND IS NOT MEANT TO BE EXHAUSTIVE;
COMPREHENSIVE TERMS AND CONDITIONS REMAIN SUBJECT TO NEGOTIATION WITH DOREL
INVESTMENT L.P. AND SUBJECT TO LEGAL REVIEW.
TERMS AND CONDITIONS THAT ARE STRICTLY OF REFERENCE TO DOREL INVESTMENT L.P. AND
ROYAL BANK OF CANADA AND WHICH WOULD NOT APPEAR IN THE TERM SHEET SENT TO THE
INVITED PARTICIPANT BANKS HAVE BEEN SHOWN IN ITALICS.
<PAGE> 6
<TABLE>
<S> <C>
ROYAL BANK OF CANADA
By: /s/ MOLLY DRENNAN By:
---------------------------------- ----------------------------------
Molly Drennan
Title: Senior Manager, Title:
Corporate Banking ----------------------------
ACCEPTED AND AGREED TO THIS
____ DAY OF , 1998
DOREL INDUSTRIES, INC.
By: /s/ FRANK RANA By:
---------------------------------- ----------------------------------
Frank Rana
Title: Treasury Title:
----------------------------
DOREL INVESTMENTS L.P.
By: /s/ JEFFREY SCHWARTZ By:
---------------------------------- ----------------------------------
Jeffrey Schwartz
Title: Vice President, Finance Title:
----------------------------
</TABLE>
<PAGE> 7
PRICING GRID
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
FUNDED DEBT/EBITDA COMMITMENT FEE LIBOR MARGIN
- -----------------------------------------------------------------------------------------------
more than 2.75 27.50 bp 100.00 bp
- -----------------------------------------------------------------------------------------------
more than 2.25<2.75 25.00 bp 85.00 bp
- -----------------------------------------------------------------------------------------------
more than 1.75<2.25 22.50 bp 70.00 bp
- -----------------------------------------------------------------------------------------------
<1.75 18.75 bp 62.50 bp
- -----------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 8
DEFINITIONS
EBITDA shall mean (a) net income before extraordinary items plus (b)
deferred taxes plus (c) amortization of intangibles plus (d) depreciation plus
(e) total interest.
BASE RATE shall mean, for any day, the higher of (i) RBC's Prime Rate, and
(ii) the sum of one-half of one percent plus the effective Federal Funds Rate
for such day.
TANGIBLE NET WORTH shall mean on a consolidated basis, the excess of total
assets (excluding goodwill, non-marketable securities, trade names, trademarks,
patents, minority interests in subsidiaries, investments in affiliates,
unamortized debt discounts and other like intangibles) over total liabilities
(excluding shareholders' equity) of Dorel Industries, Inc. and its consolidated
subsidiaries.
FUNDED DEBT shall mean, the sum of indebtedness for borrowed money, letters
of credit, capital lease obligations and guaranties.
LIBOR shall mean the per annum rate of interest appearing on page 3750 of
the Telerate screen as of 11:00 a.m. London time two business days prior to
drawdown for the interest period selected, provided that if Telerate page 3750
is unavailable, then LIBOR shall be determined by the Agent with reference to
Reuters page LIBO (at or about 11:00 a.m. London time) provided that if Reuters
page LIBO is unavailable, then LIBOR shall be determined by the Agent as the
rate at which deposits are offered by it to prime banks in the London interbank
market at or about 11:00 a.m. London time.
MAJORITY LENDERS shall be Lenders holding 66 2/3% of commitments of all
Lenders or, if the commitments have terminated, the outstanding loans.
MATERIAL SUBSIDIARIES to be defined in a mutually agreeable fashion between
the Agent and the Borrower.
RBC's PRIME RATE shall mean the rate of interest per annum determined by
the Royal Bank of Canada in New York City from time to time in its sole
discretion as its United States Dollar prime commercial lending rate for such
day. Such rate is not necessarily the lowest rate offered by Royal Bank of
Canada to any borrower.
<PAGE> 1
EXHIBIT (C)(1)
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
DOREL INDUSTRIES INC.
HORIZON ACQUISITION, INC.
AND
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
MARCH 27, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I
THE OFFER...................................................................... 1
Section 1.1 The Offer................................................... 1
Section 1.2 Company Action.............................................. 2
ARTICLE II
THE MERGER..................................................................... 3
Section 2.1 The Merger.................................................. 3
Section 2.2 Effective Time.............................................. 3
Section 2.3 Effects of the Merger....................................... 3
Section 2.4 Articles of Incorporation and By-Laws of the Surviving
Corporation................................................. 3
Section 2.5 Directors and Officers...................................... 4
Section 2.6 Closing..................................................... 4
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS...... 4
Section 3.1 Effect on Capital Stock..................................... 4
Section 3.2 Options; Stock Plans........................................ 4
Section 3.3 Exchange and Retention of Common Stock...................... 5
Section 3.4 Distributions with Respect to Unexchanged Shares............ 5
Section 3.5 No Liability................................................ 6
Section 3.6 Lost Certificates........................................... 6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................. 6
Section 4.1 Organization................................................ 6
Section 4.2 Capitalization.............................................. 7
Section 4.3 Authorization; Validity of Agreement; Necessary Action...... 7
Section 4.4 Consents and Approvals; No Violations....................... 7
Section 4.5 SEC Reports and Financial Statements........................ 8
Section 4.6 No Undisclosed Liabilities.................................. 8
Section 4.7 Absence of Certain Changes.................................. 8
Section 4.8 Disclosure Documents........................................ 9
Section 4.9 Employee Benefit Plans; ERISA............................... 9
Section 4.10 Litigation.................................................. 10
Section 4.11 Compliance with Applicable Laws............................. 10
Section 4.12 Taxes....................................................... 10
Section 4.13 Real Property............................................... 11
Section 4.14 Intellectual Property....................................... 11
Section 4.15 Contracts................................................... 11
Section 4.16 Environmental Laws and Regulations.......................... 11
Section 4.17 Labor Matters............................................... 12
Section 4.18 Brokers or Finders.......................................... 12
Section 4.19 Opinion of Financial Advisors............................... 12
Section 4.20 Board Recommendation........................................ 12
Section 4.21 Insurance................................................... 12
Section 4.22 Permits..................................................... 12
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND THE MERGER SUB.................. 12
Section 5.1 Organization................................................ 12
Section 5.2 Authorization; Validity of Agreement; Necessary Action...... 13
Section 5.3 Consents and Approvals; No Violations....................... 13
Section 5.4 Brokers or Finders.......................................... 13
Section 5.5 Interim Operations of the Merger Sub........................ 14
Section 5.6 Capitalization of the Merger Sub; Interests in the
Company..................................................... 14
Section 5.7 Disclosure Documents........................................ 14
ARTICLE VI
COVENANTS...................................................................... 14
Section 6.1 Interim Operations of the Company........................... 14
Section 6.2 Access to Information....................................... 15
Section 6.3 Employee Benefit Matters.................................... 16
Section 6.4 No Solicitation............................................. 17
Section 6.5 Publicity................................................... 18
Section 6.6 Directors' and Officers' Insurance and Indemnification...... 18
Section 6.7 Proxy Statement............................................. 19
Section 6.8 Shareholders' Meetings...................................... 19
Section 6.9 Approvals and Consents; Cooperation......................... 20
Section 6.10 Further Assurances.......................................... 20
Section 6.11 Rights Agreement............................................ 20
Section 6.12 Company Board Representation; Section 14(f)................. 20
ARTICLE VII
CONDITIONS..................................................................... 21
Section 7.1 Conditions to Each Party's Obligations...................... 21
ARTICLE VIII
TERMINATION.................................................................... 22
Section 8.1 Termination................................................. 22
Section 8.2 Effect of Termination....................................... 23
ARTICLE IX
MISCELLANEOUS.................................................................. 24
Section 9.1 Amendment and Modification.................................. 24
Section 9.2 Nonsurvival of Representations and Warranties............... 24
Section 9.3 Notices..................................................... 24
Section 9.4 Interpretation.............................................. 25
Section 9.5 Counterparts................................................ 25
Section 9.6 Entire Agreement; Third Party Beneficiaries................. 25
Section 9.7 Severability................................................ 26
Section 9.8 Governing Law............................................... 26
Section 9.9 Specific Performance........................................ 26
Section 9.10 Assignment.................................................. 26
Section 9.11 Expenses.................................................... 26
Section 9.12 Headings.................................................... 26
Section 9.13 Waivers..................................................... 26
</TABLE>
ii
<PAGE> 4
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (collectively, this "Agreement"), dated as of
March 27, 1998, by and among Dorel Industries Inc., a Quebec corporation
("Acquiror"), Horizon Acquisition, Inc., a Delaware corporation and a wholly
owned subsidiary of Acquiror ( the "Merger Sub"), and Ameriwood Industries
International Corporation, a Michigan corporation (the "Company").
WHEREAS, the respective Boards of Directors of the Merger Sub and the
Company have approved the Offer and the Merger (each as hereinafter defined), in
accordance with the Michigan Business Corporation Act (the "MBCA") and the
General Corporation Law of the State of Delaware (the "DGCL") and upon 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 (the "Offer") to acquire all the issued and outstanding
shares of common stock, par value $1.00 per share (the "Common Stock"), of the
Company (such shares of Common Stock, including the associated Rights (as
hereinafter defined), being hereinafter collectively referred to as "Shares")
for $9.625 per Share (such amount, or any greater amount per Share paid pursuant
to the Offer, being hereinafter referred to as the "Per Share Amount") net to
the seller in cash, upon the terms and subject to the conditions of this
Agreement and the Offer;
WHEREAS, the Board of Directors of the Company (the "Company Board") has,
in light of and subject to the terms and conditions set forth herein, (i)
determined that each of the Offer and the Merger is in the best interests of the
Company and its shareholders, and (ii) approved and adopted this Agreement and
the transactions contemplated hereby and resolved to recommend that shareholders
of the Company accept the Offer, tender their Shares pursuant to the Offer and
approve and adopt this Agreement and the Merger;
WHEREAS, Acquiror, the Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger, and also to set forth various conditions to the Merger;
WHEREAS, Acquiror, the Merger Sub and each of Neil L. Diver, Kevin K. Coyne
and Edwin Wachtel (each a "Director Shareholder") have entered into a Tender and
Option Agreement, dated as of the date hereof (each a "Tender and Option
Agreement" and, collectively, the "Tender and Option Agreements"), obligating
each Director Shareholder to tender his Shares pursuant to the Offer and
granting Acquiror an option with respect to such Shares, substantially in the
form of Exhibit 1 attached hereto;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein,
Acquiror, the Merger Sub and the Company agree as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 8.1 and none of the events set forth in Annex A
hereto shall have occurred or be existing, the Merger Sub shall commence
the Offer as promptly as reasonably practicable after the date hereof, but
in no event later than five business days after the initial public
announcement of the Merger Sub's intention to commence the Offer. The
obligation of the Merger Sub to accept for payment and pay for Shares
tendered pursuant to the Offer shall be subject to the condition (the
"Minimum Condition") that at least the number of Shares that, when added to
the Shares already owned by Acquiror, shall constitute a majority of the
then outstanding Shares on a fully diluted basis (including, without
limitation, all Shares issuable upon the conversion of any convertible
securities or upon the exercise of any outstanding options, warrants or
rights) shall have been validly tendered and not withdrawn prior to the
expiration of the Offer, which shall be 20 business days after the date the
Offer is commenced, and also shall be subject to the satisfaction of the
other conditions set forth in Annex A hereto. The Merger Sub expressly
reserves
<PAGE> 5
the right to waive any such condition, to increase the price per Share
payable in the Offer, and to make any other changes in the terms and
conditions of the Offer; provided, however, that no change may be made
which decreases the price per Share payable in the Offer, which reduces the
minimum number of Shares to be purchased in the Offer or, which amends or
imposes conditions to the Offer in addition to those set forth in Annex A
hereto. The Per Share Amount shall, subject to applicable withholding of
taxes, be net to the seller in cash, upon the terms and subject to the
conditions of the Offer. Subject to the terms and conditions of the Offer
(including, without limitation, the Minimum Condition), the Merger Sub
shall pay, as soon as practicable after it is legally permitted to do so
under applicable law after expiration of the Offer, for all Shares validly
tendered and not withdrawn; provided, however, that if, immediately prior
to the expiration date of the Offer, the Shares tendered and not withdrawn
pursuant to the Offer, when added to the Shares already owned by Acquiror,
equal less than 90% of the then outstanding Shares, the Merger Sub may
extend the Offer one time for a period not to exceed 20 business days,
notwithstanding that all conditions to the Offer are satisfied as of such
expiration date of the Offer.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, the Merger Sub shall file with the Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 (together
with all amendments and supplements thereto, the "Schedule 14D-1") with
respect to the Offer. The Schedule 14D-1 shall contain or shall incorporate
by reference an offer to purchase (the "Offer to Purchase") and forms of
the related letter of transmittal and any related summary advertisement
(the Schedule 14D-1, the Offer to Purchase and such other documents,
together with all supplements and amendments thereto, being referred to
herein collectively as the "Offer Documents"). Acquiror, the Merger Sub and
the Company agree to correct promptly any information provided by any of
them for use in the Offer Documents which shall have become false or
misleading, and Acquiror and the Merger Sub further agree to take all steps
necessary to cause the Schedule 14D-1 as so corrected to be filed with the
SEC and the other Offer Documents as so corrected to be disseminated to
holders of Shares, in each case as and to the extent required by applicable
federal securities laws. The Company and its counsel shall be given the
opportunity to review the Schedule 14D-1 before it is filed with the SEC.
In addition, Acquiror and the Merger Sub will provide the Company and its
counsel in writing with any comments, whether written or oral, Acquiror,
the Merger Sub or their counsel may receive from time to time from the SEC
or its staff with respect to the Offer Documents promptly after the receipt
of such comments.
Section 1.2 Company Action.
(a) The Company hereby approves of and consents to the Offer and
represents that (i) the Company Board, at a meeting duly called and held on
March 27, 1998, has unanimously (A) determined that this Agreement and the
transactions contemplated hereby, including each of the Offer and the
Merger, are fair to and in the best interests of the holders of Shares, (B)
approved and adopted this Agreement and the transactions contemplated
hereby and (C) resolved to recommend that the stockholders of the Company
accept the Offer and approve and adopt this Agreement and the transactions
contemplated hereby; provided, that such recommendation may be withdrawn,
modified or amended if, in the good faith opinion of the Company's Board,
based upon the receipt of advice from outside independent legal counsel,
failure to withdraw, modify or amend such recommendation is reasonably
likely to result in the Company's Board violating its fiduciary duties to
the Company's shareholders under applicable law and (ii) ABN-AMRO
Incorporated, formerly known as ABN-AMRO Chicago Corporation ("ABN-AMRO"),
has delivered to the Company Board a written opinion that the consideration
to be received by the holders of Shares pursuant to each of the Offer and
the Merger is fair to the holders of Shares from a financial point of view.
The Company hereby consents to the inclusion in the Offer Documents of the
recommendation of the Board described in the immediately preceding
sentence. On or before the date hereof, the Company will use its reasonable
best efforts to obtain and deliver to Acquiror the Tender and Option
Agreements, in the form attached as Exhibit 1 hereto, executed by the
Director Shareholders.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, the Company shall file with the SEC a Solicitation/
Recommendation Statement on Schedule 14D-9 (together with all
2
<PAGE> 6
amendments and supplements thereto, the "Schedule 14D-9") containing,
subject to the fiduciary duties of the Company Board under applicable law
as advised in writing by independent counsel, the recommendation of the
Company Board described in Section 1.2(a) and shall disseminate the
Schedule 14D-9 to the extent required by Rule 14d-9 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and any
other applicable federal securities laws. The Company, Acquiror and the
Merger Sub agree to correct promptly any information provided by any of
them for use in the Schedule 14D-9 which shall have become false or
misleading, and the Company further agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Acquiror and its counsel
shall be given the opportunity to review the Schedule 14D-9 before it is
filed with the SEC. In addition, the Company agrees to provide Acquiror,
the Merger Sub and their counsel with any comments, whether written or
oral, that the Company or its counsel may receive from time to time from
the SEC or its staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments or other communications.
(c) The Company shall promptly furnish the Merger Sub with mailing
labels containing the names and addresses of all record holders of Shares
and with security position listings of Shares held in stock depositories,
each as of a recent date, together with all other available listings and
computer files containing names, addresses and security position listings
of record holders and beneficial owners of Shares. The Company shall
furnish the Merger Sub with such additional information, including, without
limitation, updated listings and computer files of stockholders, mailing
labels and security position listings, and such other assistance as
Acquiror, the Merger Sub or their agents may reasonably request. Subject to
the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents
necessary to consummate the Offer or the Merger, Acquiror and the Merger
Sub shall hold in confidence the information contained in such labels,
listings and files, shall use such information only in connection with the
Offer and the Merger, and, if this Agreement shall be terminated in
accordance with Section 8.1, shall deliver to the Company all copies of
such information then in their possession.
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the satisfaction or
waiver of the conditions hereof, and in accordance with the applicable
provisions of this Agreement, the DGCL and the MBCA, at the Effective Time the
Merger Sub shall be merged with and into the Company (the "Merger"). Following
the Merger, the separate corporate existence of the Merger Sub shall cease and
the Company shall continue as the surviving corporation (the "Surviving
Corporation").
Section 2.2 Effective Time. On the Closing Date (as defined) the Company
shall execute, in the manner required by the MBCA and the DGCL, and deliver to
the Corporation, Securities and Land Development Bureau of the Michigan
Department of Corporations and Industries Services and the Secretary of State of
the State of Delaware, Articles of Merger or a Certificate of Merger, as
appropriate (collectively, the "Certificate of Merger"), duly executed and
verified by the appropriate parties hereto, and the parties shall take such
other and further actions as may be required by law to make the Merger
effective. The time the Merger becomes effective in accordance with applicable
law is referred to herein as the "Effective Time."
Section 2.3 Effects of the Merger. The Merger shall have the effects set
forth in the applicable provisions of the MBCA and the DGCL and as set forth
herein. Without limiting the generality of the foregoing, and subject thereto,
at the Effective Time, all the properties, rights, privileges, powers and
franchises of the Company and the Merger Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and the Merger
Sub shall become the debts, liabilities and duties of the Surviving Corporation.
Section 2.4 Articles of Incorporation and By-Laws of the Surviving
Corporation.
(a) The Certificate of Incorporation of the Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Corporation until thereafter
3
<PAGE> 7
amended in accordance with the provisions thereof and hereof and applicable
law, or as otherwise contemplated hereby.
(b) The By-Laws of the Merger Sub in effect at the Effective Time
shall be the By-Laws of the Surviving Corporation until thereafter amended,
in accordance with the provisions thereof, hereof and applicable law.
Section 2.5 Directors and Officers. Subject to applicable law, the
directors of the Merger Sub shall be the initial directors of the Surviving
Corporation and the officers of the Company shall be the initial officers of the
Surviving Corporation and each shall hold office until their respective
successors are duly elected and qualified, or their earlier death, resignation
or removal.
Section 2.6 Closing. The closing of the Merger (the "Closing") shall take
place at 10:00 a.m. on a date to be specified by the parties, which shall be no
later than the second business day after satisfaction or waiver of all of the
conditions set forth in Article VI (the "Closing Date"), at the offices of
Skadden, Arps, Slate, Meagher & Flom (Illinois), 333 West Wacker Drive, Chicago,
Illinois 60606, unless another date or place is agreed to in writing by the
parties hereto.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
Section 3.1 Effect on Capital Stock. As of the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of
Common Stock or any shares of capital stock of the Merger Sub:
(a) Common Stock of the Merger Sub. All of the shares of common stock,
par value $.01 per share, of the Merger Sub (the "Merger Sub Common
Stock"), issued and outstanding immediately prior to the Effective Time
shall be converted into 1000 shares of Common Stock of the Surviving
Corporation.
(b) Cancellation of Treasury Stock. Each share of Common Stock that is
owned by any affiliate of the Merger Sub, the Company or by any wholly
owned subsidiary of the Company shall automatically be cancelled and
retired and shall cease to exist, and no cash or other consideration shall
be delivered or deliverable in exchange therefor.
(c) Retention or Exchange of Shares of Common Stock. Except as
otherwise provided herein, each share of Common Stock issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be
converted into the right to receive $9.625 in cash per share (the "Cash
Consideration").
Section 3.2 Options; Stock Plans.
(a) Each option held by an employee, officer or director of the
Company and other eligible holders to acquire shares of Common Stock
("Company Option") that is outstanding immediately prior to the Merger,
whether or not then vested or exercisable, shall, simultaneously with the
Merger, be cancelled in exchange for a single lump sum cash payment equal
to the product of (1) the number of shares of Common Stock subject to such
Company Option and (2) the excess, if any, of the Cash Consideration over
the exercise price per share of such Company Option, subject to any
required withholding of taxes.
(b) Each stock appreciation right held by an employee, officer or
director of the Company (an "SAR") that is outstanding immediately prior to
the Merger, whether or not then vested or exercisable, shall,
simultaneously with the Merger, be cancelled in exchange for a single lump
sum cash payment equal to the product of (1) the number of SAR's held by
such employee, officer or director and (2) the excess, if any, of the Cash
Consideration over $4.00, the fair market value on the date the SAR's were
granted.
4
<PAGE> 8
(c) Prior to the Effective Time, if necessary, the Company shall use
all reasonable efforts to (i) obtain consents from appropriate holders of
Company Options and SAR's and (ii) make any amendments to the terms of such
Company Options, SAR's, or the compensation plans or arrangements related
thereto that are necessary to give effect to the transactions contemplated
by Sections 3.2 (a) and 3.2(b). Notwithstanding any other provision of this
Section, payment pursuant to this Section 3.2 may be withheld in respect of
any employee stock option or SAR until necessary or appropriate consents
are obtained.
Section 3.3 Exchange and Retention of Common Stock.
(a) Immediately following the Effective Time, Acquiror and the Merger
Sub shall take all steps necessary to cause to be deposited on a timely
basis with the bank or trust company as shall be mutually acceptable to the
Merger Sub and the Company, acting as the exchange agent (the "Exchange
Agent") in an account (the "Exchange Fund") the aggregate Cash
Consideration to which holders of shares of Common Stock shall be entitled
at the Effective Time pursuant to Section 3.1(c).
(b) Promptly after the Effective Time, Acquiror shall cause the
Exchange Agent to mail to each record holder of certificates (the
"Certificates") that immediately prior to the Effective Time represented
shares of Common Stock a form of letter of transmittal which shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to
the Exchange Agent and instructions for use in surrendering such
Certificates and receiving the Cash Consideration in respect thereof.
(c) In effecting the payment of the Cash Consideration in respect of
shares of Common Stock represented by Certificates entitled to payment of
the Cash Consideration pursuant to Section 3.1(c), upon the surrender of
each such Certificate, the Exchange Agent at the time of such surrender
shall pay the holder of such Certificate the Cash Consideration multiplied
by the number of shares of Common Stock represented by such Certificate, in
consideration therefor. Upon such payment, such Certificate shall forthwith
be cancelled.
(d) Until surrendered in accordance with paragraph (c) above, each
Certificate (other than Certificates representing shares of Common Stock
held by any affiliate of the Merger Sub, in the treasury of the Company or
by any wholly owned subsidiary of the Company) shall represent solely the
right to receive the aggregate Cash Consideration relating thereto. No
interest shall be paid or accrued on the Cash Consideration. If the Cash
Consideration (or any portion thereof) is to be delivered to any person
other than the person in whose name the Certificate formerly representing
shares of Common Stock surrendered therefor is registered, it shall be a
condition to such right to receive such Cash Consideration that the
Certificate so surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the person surrendering such shares of
Common Stock shall pay to the Exchange Agent any transfer or other taxes
required by reason of the payment of the Cash Consideration to a person
other than the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not applicable.
(e) Promptly following the date which is six months after the
Effective Time, the Exchange Agent shall deliver to the Surviving
Corporation all cash and other documents in its possession relating to the
transactions described in this Agreement, and the Exchange Agent's duties
shall terminate. Thereafter, each holder of a Certificate formerly
representing a share of Common Stock entitled to the payment of Cash
Consideration may surrender such Certificate to the Surviving Corporation
and (subject to applicable abandoned property, escheat and similar laws)
receive in consideration therefor the applicable aggregate Cash
Consideration relating thereto, without any interest thereon.
(f) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any shares of Common Stock
which were outstanding immediately prior to the Effective Time and which
are entitled to the payment of Cash Consideration.
Section 3.4 Distributions with Respect to Unexchanged Shares. No dividends
or other distributions with respect to shares of Common Stock entitled to the
payment of Cash Consideration with a record date after the
5
<PAGE> 9
Effective Time shall be paid to the holder of any such unsurrendered Certificate
with respect to the shares of Common Stock represented thereby. Subject to the
effect of applicable laws, following surrender of any such Certificate, there
shall be paid to the holder of the certificate representing whole shares of
Common Stock issued in exchange therefor, without interest, at the time of such
surrender, the Cash Consideration.
Section 3.5 No Liability. None of the Merger Sub, Acquiror, the Company,
the Surviving Corporation or the Exchange Agent shall be liable to any person in
respect of any Cash Consideration delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any Certificates shall
not have been surrendered prior to seven years after the Effective Time (or
immediately prior to such earlier date on which the Cash Consideration would
otherwise escheat to or become the property of any Governmental Entity (as
hereinafter defined)) any such distributions or cash in respect of such
Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
Section 3.6 Lost Certificates. In the event 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 Company or the Surviving Corporation, the posting by such person
of a bond in such reasonable amount as the Company or the Surviving Corporation,
as the case may be, may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed Certificate the amount to which such
person is entitled pursuant to this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise disclosed to the Merger Sub in a letter delivered to it
at or prior to the execution of this Agreement (the "Company Disclosure
Letter"), the Company represents and warrants to the Merger Sub as follows:
Section 4.1 Organization.
(a) Each of the Company and the Company Subsidiaries (as defined in
Section 4.1(b)) is a corporation or other entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as it is now being conducted, except where failure to be in good
standing or to have such power and authority would not, individually or in
the aggregate, have a Company Material Adverse Effect (as defined in this
Section 4.1). Each of the Company and the Company Subsidiaries is duly
qualified or licensed to do business as a foreign corporation and is in
good standing in each jurisdiction in which the nature of the business
conducted by it makes such qualification or licensing necessary, except
where the failure to be so duly qualified, licensed and in good standing
would not, individually or in the aggregate, have a Company Material
Adverse Effect. The Company has heretofore delivered to Acquiror a complete
and correct copy of each of its articles of incorporation and By-Laws, as
currently in effect. As used in this Agreement, "Company Material Adverse
Effect" means any material adverse change in or effect on the business,
financial condition or results of operations of the Company and its
subsidiaries taken as a whole; provided, however, that the effects of
changes that are generally applicable to (i) the North American ready-to-
assemble furniture industry (the "Industry"), (ii) the United States
economy, or (iii) the United States securities markets shall be excluded
from such determination; and provided, further that any adverse effect on
the Company and its subsidiaries resulting from the execution of this
Agreement and the announcement of this Agreement and the transactions
contemplated hereby shall also be excluded from such determination.
(b) Section 4.1 to the Company Disclosure Letter lists all
subsidiaries of the Company (individually, a "Company Subsidiary," and
collectively, the "Company Subsidiaries") and their states of
incorporation. Except as set forth in Section 4.1 to the Company Disclosure
Letter, the Company does
6
<PAGE> 10
not own an equity interest in or control, directly or indirectly, any other
corporation, association, partnership or business organization other than
the Company Subsidiaries.
Section 4.2 Capitalization.
(a) As of the date hereof, the authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock and 5,000,000 shares of
preferred stock, no par value per share (the "Preferred Stock"). As of
March 27, 1998, (i) 4,349,606 shares of Common Stock were issued and
outstanding, (ii) no shares of Common Stock were issued and held in the
treasury of the Company, and (iii) no shares of Preferred Stock were issued
and outstanding. Since such date, no additional shares of capital stock
have been issued except shares issued upon the exercise of the Company
Options pursuant to the Company's stock option and employee stock purchase
plans, pension plans and other similar employee benefit plans, all as
described in the Company Disclosure Letter (the "Company Stock Plans"). All
the outstanding shares of the Company's capital stock are duly authorized,
validly issued, fully paid, non-assessable and free of preemptive rights.
Section 4.2(a) of the Company Disclosure Letter sets forth (i) the number
of outstanding Company Options and SARs on the date hereof pursuant to the
Company Stock Plans, (ii) the identity of the holders of such Company
Options or SARs, and (iii) the vesting schedules and the exercise prices
for such Company Options and SARs. Except as provided herein or as
disclosed in Section 4.2(a) of the Company Disclosure Letter and, except
for the Company Stock Plans as of the date hereof, there are no existing
(i) options, warrants, calls, subscriptions or other rights, convertible
securities, agreements or commitments of any character obligating the
Company or any of its subsidiaries to issue, transfer or sell any shares of
capital stock or other equity interest in, the Company or any of its
subsidiaries or securities convertible into or exchangeable for such shares
or equity interests, (ii) contractual obligations of the Company or any of
its subsidiaries to repurchase, redeem or otherwise acquire any capital
stock of the Company or any of its subsidiaries of the Company or (iii)
voting trusts or similar agreements to which the Company is a party with
respect to the voting of the capital stock of the Company.
(b) Except as disclosed in Section 4.2(b) of the Company Disclosure
Letter, all of the outstanding shares of capital stock (or equivalent
equity interests of entities other than corporations) of each of the
Company Subsidiaries are beneficially owned, directly or indirectly, by the
Company, free and clear of all liens, pledge, security interests, claims or
other encumbrances.
Section 4.3 Authorization; Validity of Agreement; Necessary Action. The
Company has the requisite corporate power and authority to execute and deliver
this Agreement and, subject to obtaining the necessary approval of its
shareholders, to consummate the transactions contemplated hereby. The execution,
delivery and performance by the Company of this Agreement, and the consummation
by it of the transactions contemplated hereby, have been duly authorized by the
Company Board and no other corporate action no the part of the Company is
necessary to authorize the execution and delivery by the Company of this
Agreement and the consummation by it of the transactions contemplated hereby
(other than, with respect to the Merger, the affirmative vote by holders of a
majority of the issued and outstanding shares of Common Stock). This Agreement
has been duly executed and delivered by the Company and, assuming due and valid
authorization, execution and delivery hereof by Acquiror and the Merger Sub, is
a valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except that (i) such enforcement may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws, now or hereafter in effect, affecting creditors' rights generally, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
Section 4.4 Consents and Approvals; No Violations. Except as disclosed in
Section 4.4 of the Company Disclosure Letter and except for (a) filings pursuant
to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), (b) applicable requirements under the Securities Act of 1933, as
amended ("Securities Act") and the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (c) the filing of the Certificate of Merger, (d)
applicable requirements under corporation or "blue sky" laws of various states
or (e) as contemplated by this Agreement, neither the execution, delivery or
performance of this
7
<PAGE> 11
Agreement by the Company nor the consummation by the Company of the transactions
contemplated hereby will (i) violate any provision of the Articles of
Incorporation or By-Laws of the Company, (ii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, or result in the creation of a lien or other encumbrance on any property
or asset of the Company or any Company Subsidiary, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any of its
subsidiaries is a party or by which any of them or any of their properties or
assets may be bound (the "Company Agreements"), (iii) violate any order, writ,
judgment, injunction, decree, law, statute, rule or regulation applicable to the
Company, any of the Company Subsidiaries or any of their properties or assets,
or (iv) require on the part of the Company any filing or registration with,
notification to, or authorization, consent or approval of, any court,
legislative, executive or regulatory authority or agency (a "Governmental
Entity"); except in the case of clauses (ii), (iii) or (iv) for such violations,
breaches or defaults which, or filings, registrations, notifications,
authorizations, consents or approvals the failure of which to obtain, (A) would
not, individually or in the aggregate, have a Company Material Adverse Effect
and would not, individually or in the aggregate, materially adversely affect the
ability of the Company to consummate the transactions contemplated by this
Agreement, or (B) would become applicable solely as a result of any acts or
omissions by, or the status of any facts pertaining to, Acquiror or the Merger
Sub.
Section 4.5 SEC Reports and Financial Statements. The Company has filed all
reports required to be filed by it with the SEC pursuant to the Exchange Act and
the Securities Act since January 1, 1995 (as such documents have been amended
since the date of their filing, collectively, the "Company SEC Documents"). The
Company SEC Documents, as of their respective filing dates, or if amended, as of
the date of the last such amendment, (i) complied in all material respects at
the time filed with the requirements of the Securities Act or the Exchange Act,
as applicable and (ii) did not contain any untrue statement of a material fact
or omit to state a 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 misleading. Each of the consolidated balance sheets
(including the related notes) included in the Company SEC Documents and the
Company Balance Sheet (as defined below) fairly presents in all material
respects the financial position of the Company and its consolidated subsidiaries
as of the respective dates thereof, and the other related statements (including
the related notes) included therein fairly present in all material respects the
results of operations and cash flows of the Company and its consolidated
subsidiaries for the respective periods or as of the respective dates set forth
therein. Each of the financial statements (including the related notes) included
in the Company SEC Documents has been prepared in all material respects in
accordance with GAAP applied on a consistent basis during the periods involved,
except as otherwise noted therein and subject, in the case of unaudited interim
financial statements, to normal year-end adjustments. The consolidated balance
sheet of the Company at December 31, 1997, included in the Annual Report on Form
10-K for the fiscal year ended December 31, 1997 of the Company, is herein
sometimes referred to as the "Company Balance Sheet."
Section 4.6 No Undisclosed Liabilities. Except (a) for liabilities incurred
in the ordinary course of business and consistent with past practice since
December 31, 1997, (b) for liabilities disclosed in the Company Balance Sheet or
specifically disclosed in the Company SEC Documents, (c) for liabilities
incurred in connection with the Merger or otherwise as contemplated by this
Agreement and (d) as disclosed in Section 4.6 of the Company Disclosure Letter,
since December 31, 1997, neither the Company nor any of the Company Subsidiaries
has incurred any liabilities that would be required to be reflected or reserved
against in a consolidated balance sheet of the Company and its consolidated
subsidiaries prepared in accordance with GAAP as applied in preparing the
consolidated balance sheet of the Company and its consolidated subsidiaries as
of December 31, 1997, except for liabilities that would not have a Company
Material Adverse Effect.
Section 4.7 Absence of Certain Changes. Except as (a) specifically
disclosed in the Company SEC Documents, (b) disclosed in Section 4.7 of the
Company Disclosure Letter or (c) contemplated by this Agreement, since December
31, 1997, the Company has conducted its business only in the ordinary course
8
<PAGE> 12
and in a manner consistent with past practice and has not suffered any change or
changes constituting, individually or in the aggregate, a Company Material
Adverse Effect.
Section 4.8 Disclosure Documents. Neither the Schedule 14D-9 nor any
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
amendments or supplements thereto are filed with the SEC or are first published,
sent or given to stockholders of the Company, 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 made therein,
in the light of the circumstances under which they are made, not misleading.
None of the information supplied or to be supplied by the Company for inclusion
in the proxy statement relating to the meeting of the Company's shareholders
(the "Special Meeting") to be held in connection with the Merger, as the same
may be amended or supplemented from time to time (the "Proxy Statement"), if
such Proxy Statement is required by law to be filed, will, either at the time of
mailing of the Proxy Statement to shareholders of the Company or at the time of
the Special Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Proxy Statement, if any, and Schedule 14D-9 will
comply as to form in all material respects with the provisions of the Exchange
Act, except that no representation or warranty is made by the Company with
respect to information supplied in writing for inclusion in the Proxy Statement
or the Schedule 14D-9 by Acquiror or the Merger Sub.
Section 4.9 Employee Benefit Plans; ERISA.
(a) Section 4.9 of the Company Disclosure Letter sets forth a list of
all material employee benefit plans (including but not limited to plans
described in section 3 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) maintained by the Company or by any trade or
business, whether or not incorporated (an "ERISA Affiliate"), which
together with the Company would be deemed a "single employer" within the
meaning of section 4001(b)(15) of ERISA ("Benefit Plans") and all material
employment and severance agreements with employees of the Company
("Employee Agreements"). True and complete copies of all Benefit Plans and
Employee Agreements, including all amendments to date, have been made
available to Acquiror or its representatives by the Company.
(b) With respect to each Benefit Plan, except as otherwise disclosed
to Acquiror: (i) if intended to qualify under section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), such plan has
received a determination letter from the Internal Revenue Service stating
that it so qualifies and that its trust is exempt from taxation under
section 501(a) of the Code; (ii) such plan has been administered in all
material respects in accordance with its terms and applicable law; (iii) no
breaches of fiduciary duty have occurred which might reasonably be expected
to give rise to material liability on the part of the Company; (iv) no
disputes are pending, or, to the knowledge of the Company, threatened that
might reasonably be expected to give rise to material liability on the part
of the Company (other than routine claims for benefits); (v) no prohibited
transaction (within the meaning of section 406 of ERISA) has occurred that
might reasonably be expected to give rise to material liability on the part
of the Company; and (vi) all contributions required to be made to such plan
as of the date hereof (taking into account any extensions for the making of
such contributions) have been made in full.
(c) No Benefit Plan is a "multiemployer pension plan," as defined in
section 3(37) of ERISA, nor is any Benefit Plan a plan described in section
4063(a) of ERISA.
(d) No liability under Title IV of ERISA has been incurred by the
Company or any ERISA Affiliate that has not been satisfied in full, and no
condition exists that presents a material risk to the Company or any ERISA
Affiliate of incurring a material liability under such Title.
(e) No Benefit Plan has incurred an accumulated funding deficiency, as
defined in section 302 of ERISA or section 412 of the Code, whether or not
waived.
(f) With respect to each Benefit Plan that is a "welfare plan" (as
defined in section 3(1) of ERISA), no such plan provides medical or death
benefits with respect to current or former employees of
9
<PAGE> 13
the Company or any of its Significant Subsidiaries beyond their termination
of employment (other than to the extent required by applicable law).
Section 4.10 Litigation. Except as disclosed in Section 4.10 of the Company
Disclosure Letter or as specifically disclosed in the Company SEC Documents, as
of the date hereof, there is no action, suit, proceeding or, to the best
knowledge of the Company, investigation pending or, to the best knowledge of the
Company, action, suit, proceeding, audit or investigation threatened, involving
the Company or any of its subsidiaries, by or before any court, governmental or
regulatory authority or by any third party that (i) individually or in the
aggregate, would have a Company Material Adverse Effect or (ii) seeks to delay
or prevent the consummation of the transactions contemplated by this Agreement.
Except as disclosed in Section 4.10 of the Company Disclosure Letter, neither
the Company nor any of the Company Subsidiaries is subject to any continuing
order of, consent decree, settlement agreement or other similar written
agreement with any court, governmental or regulatory authority, or any order,
writ, judgment, injunction, decree, determination or award of any court,
governmental or regulatory authority or arbitrator having, individually or in
the aggregate, a Company Material Adverse Effect.
Section 4.11 Compliance with Applicable Laws. Neither the Company nor any
of the Company Subsidiaries is in default or violation of any term, condition or
provision of any statute, law, rule, regulation, judgment, decree, order,
concession, grant, franchise, permit or license or other governmental
authorization or approval applicable to the Company or any of the Company
Subsidiaries, excluding defaults or violations which would not, individually or
in the aggregate, have a Company Material Adverse Effect or which become
applicable as a result of any acts or omissions by, or the status of any facts
pertaining to, Acquiror or the Merger Sub.
Section 4.12 Taxes.
(a) Except as disclosed in Section 4.12 of the Company Disclosure
Letter, the Company and each of its subsidiaries has (i) timely filed all
material Tax Returns required to be filed by any of them for tax years
ended prior to the date of this Agreement or requests for extensions have
been timely filed and any such request shall have been granted and not
expired and all such returns are complete in all material respects, (ii)
have paid or accrued all Taxes shown to be due and payable on such returns
other than such Taxes as are being contested in good faith by the Company
or its subsidiaries, and (iii) have properly accrued in all material
respects all such Taxes for such periods subsequent to the periods covered
by such returns, except in the case of the foregoing clauses (i), (ii) and
(iii) where any such failure would not have a Company Material Adverse
Effect.
(b) Except as disclosed in Section 4.12 of the Company Disclosure
Letter, there are no ongoing federal, state or local audits or examinations
of any Tax Return of the Company or its subsidiaries.
(c) Except as disclosed in Section 4.12 of the Company Disclosure
Letter, there are no outstanding written requests, agreements, consents or
waivers to extend the statutory period of limitations applicable to the
assessment of any material Taxes or deficiencies against the Company or any
of its subsidiaries, and no power of attorney granted by either the Company
or any of its subsidiaries with respect to any Taxes is currently in force.
(d) Except as disclosed in Section 4.12 of the Company Disclosure
Letter, neither the Company nor any of its subsidiaries is a party to any
agreement providing for the allocation or sharing of Taxes.
(e) "Taxes" shall mean any and all taxes, charges, fees, levies or
other assessments, including, without limitation, income, gross receipts,
excise, real or personal property, sales, withholding, social security,
occupation, use, service, service use, license, net worth, payroll,
franchise, transfer and recording taxes, fees and charges, imposed by the
United States Internal Revenue Service or any taxing authority (whether
domestic or foreign including, without limitation, any state, county, local
or foreign government or any subdivision or taxing agency thereof
(including a United States possession)), whether computed on a separate,
consolidated, unitary, combined or any other basis; and such term shall
include any interest, penalties or additional amounts attributable to, or
imposed upon, or with respect to, any such taxes, charges, fees, levies or
other assessments. "Tax Return" shall mean any report, return, document,
10
<PAGE> 14
declaration or other information or filing required to be supplied to any
taxing authority or jurisdiction (foreign or domestic) with respect to
Taxes.
Section 4.13 Real Property. The Company (including, as applicable, the
Company Subsidiaries) owns all of the real and personal property included in the
Company Balance Sheet (except assets recorded under capital lease obligations
and such property as has been disposed of during the ordinary course of the
Company's business since the date of the Company Balance Sheet), free and clear
of any liens, claims, charges, exceptions or encumbrances, except for those (i)
if any, which in the aggregate are not material and which do not materially
affect continued use of such property, or (ii) which are set forth in Section
4.13 to the Company Disclosure Letter or in the Company SEC Documents.
Section 4.14 Intellectual Property. Except as disclosed in Section 4.14 of
the Company Disclosure Letter or as specifically disclosed in the Company SEC
Documents, and except for such claims which would not, individually or in the
aggregate, have a Company Material Adverse Effect, as of the date hereof, there
are no pending or threatened claims of which the Company or any of the Company
Subsidiaries is aware, to the best of its knowledge, by any person against their
use of any trademarks, trade names, service marks, service names, mark
registrations, logos, assumed names and copyright registrations, patents and all
applications therefor which are owned by the Company or the Company Subsidiaries
or used in their respective operations as currently conducted (collectively, the
"Company Intellectual Property"). The Company and the Company Subsidiaries have
such ownership of or such rights by license, lease or other agreement to the
Company Intellectual Property as are necessary to permit them to conduct their
respective operations as currently conducted, except where the failure to have
such rights would not, individually or in the aggregate, have a Company Material
Adverse Effect.
Section 4.15 Contracts. Except as set forth in Section 4.15 of the Company
Disclosure Letter, each Company Agreement is in full force and effect except
where the failure to be in full force and effect would not, individually or in
the aggregate, have a Company Material Adverse Effect and, to the knowledge of
the Company, is valid and enforceable by the Company or a subsidiary of the
Company, as the case may be, in accordance with its terms except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought. Except as set forth in Section 4.15 of the Company Disclosure
Letter, neither the Company nor any of its subsidiaries is in default in the
observance or the performance of any term or obligation to be performed by it
under any Company Agreement except for such defaults the effect of which would
not, individually or in the aggregate, have a Company Material Adverse Effect.
To the knowledge of the Company, no other person is in material default in the
observance or the performance of any term or obligation to be performed by it
under any Company Agreement.
Section 4.16 Environmental Laws and Regulations. Except as set forth in
Section 4.16 of the Company Disclosure Letter, (a) the Company and each of its
subsidiaries is in compliance with all applicable federal, state, local and
foreign laws and regulations relating to protection of the environment
(collectively, "Environmental Laws"), except for non-compliance which would not,
individually or in the aggregate, have a Company Material Adverse Effect, which
compliance includes, but is not limited to, the possession by the Company and
its subsidiaries of material permits and other governmental authorizations
required under applicable Environmental Laws, and compliance with the terms and
conditions thereof; (b) neither the Company nor any of its subsidiaries has
received notice of, or to the knowledge of the Company, is the subject of, any
actions, causes of action, claims, investigations, demands, or notices by any
Person alleging liability under or non-compliance with any Environmental Law
("Environmental Claims") which would, individually or in the aggregate, have a
Company Material Adverse Effect; and (c) the Company is not aware of and has not
received notice of any event, condition, circumstance, activity, practice,
incident, action or plan which is reasonably likely to interfere with or prevent
continued compliance with or which would give rise to any common law or
statutory liability, or otherwise form the basis of any claim, action, suit or
proceeding under any Environmental Laws, except where the interference or
failure to comply with common law or statutes or
11
<PAGE> 15
other claim, action, suit or proceeding under Environmental Law would not,
individually or in the aggregate, have a Company Material Adverse Effect.
Section 4.17 Labor Matters. Except as set forth in Section 4.17 of the
Company Disclosure Letter or as specifically disclosed in the Company SEC
Documents, (a) neither the Company nor any of the Company Subsidiaries is a
party to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization, and (b)
there is no unfair labor practice or labor arbitration proceedings pending or,
to the knowledge of the Company, threatened against the Company or the Company
Subsidiaries, except for any such proceeding which would not, individually or in
the aggregate, have a Company Material Adverse Effect.
Section 4.18 Brokers or Finders. The Company represents, as to itself, the
Company Subsidiaries and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
brokers' or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, except ABN-AMRO,
whose fees and expenses will be paid by the Company. The Company has heretofore
made available to Acquiror a complete and correct copy of all agreements between
the Company and ABN-AMRO pursuant to which such firm would be entitled to any
payment relating to the transaction.
Section 4.19 Opinion of Financial Advisors. The Company has received the
opinion of ABN-AMRO to the effect that, as of the date hereof, the Cash
Consideration is fair, from a financial point of view, to the shareholders of
the Company.
Section 4.20 Board Recommendation. The Company Board, at a meeting duly
called and held, has (a) determined that this Agreement and the transactions
contemplated hereby, taken together, are advisable and in the best interests of
the Company and its shareholders, and (b) resolved to recommend that the holders
of the shares of Common Stock approve this Agreement and the transactions
contemplated hereby, including the Merger.
Section 4.21 Insurance. The Company and the Company Subsidiaries have
obtained and maintained in full force and effect insurance with responsible and
reputable insurance companies or associations in such amounts, on such terms and
covering such risks, as is customarily carried by reasonably prudent persons
conducting businesses or owning or leasing assets similar to those conducted,
owned or leased by the Company or any of the Company Subsidiaries, except where
the failure to obtain or maintain such insurance would not, individually or in
the aggregate, have a Company Material Adverse Effect.
Section 4.22 Permits. The Company and the Company Subsidiaries are in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any court, governmental or regulatory authority necessary for the Company and
its subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits"), except where the
failure to have any of the Company Permits would not, individually or in the
aggregate, have a Company Material Adverse Effect, and, as of the date hereof,
no suspension or cancellation of any of the Company Permits is pending or, to
the knowledge of the Company threatened, except where the suspension or
cancellation of any of the Company Permits would not, individually or in the
aggregate, have a Company Material Adverse Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
AND THE MERGER SUB
Acquiror and the Merger Sub represent and warrant to the Company as
follows:
Section 5.1 Organization. Each of Acquiror and the Merger Sub is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power
12
<PAGE> 16
and authority would not have an Acquiror Material Adverse Effect (as defined in
this Section 5.1). Each of Acquiror and the Merger Sub is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except where the failure
to be so duly qualified or licensed and in good standing would not have an
Acquiror Material Adverse Effect. Acquiror has heretofore delivered to Company a
complete and correct copy of each of its certificate of incorporation and
by-laws, as currently in effect. As used in this Agreement, "Acquiror Material
Adverse Effect" means any material adverse change in or effect on the business,
financial condition or results of operations of Acquiror and its subsidiaries,
taken as a whole; provided, however, that the effects of changes that are
generally applicable to (i) the United States economy or (ii) the United States
securities markets shall be excluded from such determination; and provided,
further that any adverse effect on Acquiror or the Merger Sub resulting from the
execution of this Agreement and the transactions contemplated hereby shall also
be excluded from such determination.
Section 5.2 Authorization; Validity of Agreement; Necessary Action. Each of
Acquiror and the Merger Sub has full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance by Acquiror and the Merger Sub
of this Agreement, and the consummation of the transactions contemplated hereby,
have been duly authorized by their respective board of directors and no other
corporate action on the part of Acquiror or the Merger Sub is necessary to
authorize the execution and delivery by Acquiror or the Merger Sub of this
Agreement and the consummation by it of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Acquiror and the Merger
Sub and, assuming due and valid authorization, execution and delivery hereof by
the Company, is a valid and binding obligation of each of Acquiror and the
Merger Sub, enforceable against them in accordance with its terms, except that
(i) such enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
Section 5.3 Consents and Approvals; No Violations. Except for (a) filings
pursuant to the HSR Act, (b) applicable requirements under the Securities Act
and the Exchange Act, (c) the filing of the Certificate of Merger, (d)
applicable requirements under corporation or "blue sky" laws of various states
or (e) as contemplated by this Agreement, neither the execution, delivery or
performance of this Agreement by either Acquiror or the Merger Sub nor the
consummation by either Acquiror or the Merger Sub of the transactions
contemplated hereby will (i) violate any provision of the certificate of
incorporation or articles of incorporation, as the case may be, or by-laws of
either Acquiror or the Merger Sub, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to which
either Acquiror or the Merger Sub is a party or by which it or any of its
properties or assets may be bound (the "Acquiror Agreements"), (iii) to the best
knowledge of either Acquiror or the Merger Sub, violate any order, writ,
judgment, injunction, decree, law, statute, rule or regulation applicable to
either Acquiror or the Merger Sub or any of their respective properties or
assets, or (iv) require on the part of either Acquiror or the Merger Sub any
filing or registration with, notification to, or authorization, consent or
approval of, any Governmental Entity; except in the case of clauses (ii), (iii)
or (iv) for such violations, breaches or defaults which, or filings,
registrations, notifications, authorizations, consents or approvals the failure
of which to obtain, (A) would not have an Acquiror Material Adverse Effect and
would not materially adversely affect the ability of either Acquiror or the
Merger Sub to consummate the transactions contemplated by this Agreement, or (B)
become applicable as a result of any acts or omissions by, or the status of any
facts pertaining to, the Company.
Section 5.4 Brokers or Finders. Each of Acquiror and the Merger Sub
represents, as to itself and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or person is or will be entitled to any
brokers' or finders' fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement.
13
<PAGE> 17
Section 5.5 Interim Operations of the Merger Sub. The Merger Sub was formed
solely for the purpose of engaging in the transactions contemplated hereby, has
engaged in no other business activities and has conducted its operations only as
contemplated hereby.
Section 5.6 Capitalization of the Merger Sub; Interests in the Company. The
authorized capital stock of the Merger Sub consists of the Merger Sub Common
Stock. As of the close of business on March 27, 1998, 1,000 shares of the Merger
Sub Common Stock were issued and outstanding, all of which are entitled to vote,
and no shares of the Merger Sub Common Stock were held in the Merger Sub's
treasury. All the outstanding shares of the Merger Sub's capital stock are duly
authorized, validly issued, fully paid and non-assessable. Except as set forth
above, there will be, at the Effective Time, (a) no shares of capital stock or
other voting securities of the Merger Sub, (b) no securities of the Merger Sub
convertible into or exchangeable for shares of capital stock or voting
securities of the Merger Sub and (c) no options or other rights to acquire from
the Merger Sub, and no obligation of the Merger Sub to issue any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Merger Sub (the items referred to in clauses
(a), (b) and (c) being referred to collectively as the "Merger Sub Securities").
There are no outstanding obligations of the Merger Sub to repurchase, redeem or
otherwise acquire any the Merger Sub Securities. As of the date hereof, Acquiror
and the Merger Sub do not beneficially hold any shares of Common Stock.
Section 5.7 Disclosure Documents. The Offer Documents will not, at the time
the Offer Documents are filed with the SEC or are first published, sent or given
to stockholders of the Company, 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 made therein, in the light
of the circumstances under which they are made, not misleading. Notwithstanding
the foregoing, Acquiror and the Merger Sub make no representation or warranty
with respect to any information supplied by the Company or any of its
representatives in writing, expressly for inclusion in the Offer Documents,
which is contained in any of the foregoing documents or the Offer Documents. The
Offer Documents shall comply in all material respects as to form with the
requirements of the Exchange Act and the rules and regulations thereunder. None
of the information supplied or to be supplied by Acquiror for inclusion in the
Proxy Statement will, either at the time of mailing of the Proxy Statement to
shareholders of the Company, or at the time of the Special Meeting, contain any
untrue statement of a material fact or will omit to state any material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
ARTICLE VI
COVENANTS
Section 6.1 Interim Operations of the Company. The Company covenants and
agrees that the Company shall, and shall cause each of its subsidiaries to,
conduct its operations in the ordinary and usual course of business consistent
with past practice and use all reasonable efforts to preserve intact their
respective business organizations' goodwill, keep available the services of
their respective present officers and key employees, and preserve the goodwill
and business relationships with suppliers, distributors, customers and others
having business relationships with them. Without limiting the generality of the
foregoing, and except as otherwise permitted by this Agreement or as
specifically contemplated by the Company Disclosure Letter, or as required by
applicable law, rule or regulation prior to the Effective Time, without the
consent of Acquiror, which consent shall not be unreasonably withheld, the
Company will not, and will cause each of its subsidiaries not to:
(a) amend or propose to amend their respective charters or bylaws; or
split, combine or reclassify their outstanding capital stock or declare,
set aside or pay any dividend or distribution in respect of any capital
stock or issue or authorize or propose the issuance of any other securities
in respect of, in lieu of or in substitution for, shares of its capital
stock, except for cash dividends and cash distributions paid by
subsidiaries to other subsidiaries or to the Company;
14
<PAGE> 18
(b) (i) issue or authorize or propose the issuance of, sell, pledge or
dispose of, or agree to issue or authorize or propose the issuance of,
sell, pledge or dispose of, any additional shares of, or any options,
warrants or rights of any kind to acquire any shares of, their capital
stock of any class, any debt or equity securities convertible into or
exchangeable for such capital stock or any other equity related right
(including any phantom stock or SAR rights), other than any such issuance
pursuant to options, warrants, rights or convertible securities outstanding
as of the date hereof; (ii) acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity interest in or a
substantial portion of the assets of, or by any other manner, any business
or any corporation, partnership, association or other business organization
or division thereof or otherwise acquire or agree to acquire any assets in
each case which are material, individually or in the aggregate, to the
Company and its subsidiaries taken as a whole; (iii) sell (including by
sale-leaseback), lease, pledge, dispose of or encumber any assets or
interests therein, which are material, individually or in the aggregate, to
the Company and its subsidiaries taken as a whole, other than in the
ordinary course of business and consistent with past practice; (iv) incur
or become contingently liable with respect to any material indebtedness for
borrowed money or guarantee any such indebtedness or issue any debt
securities or otherwise incur any material obligation or liability
(absolute or contingent) other than short-term indebtedness in the ordinary
course of business and consistent with past practice; (v) redeem, purchase,
acquire or offer to purchase or acquire any (x) shares of its capital stock
or (y) long-term debt other than as required by governing instruments
relating thereto; (vi) other than in the ordinary course of business,
neither the Company nor any Company Subsidiary shall modify, amend or
terminate any material contract or agreement to which the Company or any
Company Subsidiary is a party or waive, release or assign any material
rights or claims; or (vii) enter into any contract, agreement, commitment
or arrangement with respect to any of the foregoing;
(c) enter into or amend any employment, severance, special pay
arrangement with respect to termination of employment or other arrangements
or agreements with any directors, officers or key employees except for (i)
normal salary increases and merit bonuses, (ii) arrangements in connection
with employee transfers or (iii) agreements with new employees, in each
case, in the ordinary course of business consistent with past practice;
(d) adopt, enter into or amend any, or become obligated under any new
bonus, profit sharing, compensation, stock option, pension, retirement,
deferred compensation, healthcare, employment or other employee benefit
plan, agreement, trust, fund or arrangement for the benefit or welfare of
any employee or retiree, except as required to comply with changes in
applicable law occurring after the date hereof; provided, however, the
Company shall not be prevented from amending the Company ESOP (as defined
in Section 6.3(c) hereof) as contemplated by Section 6.3(c) hereof;
(e) except as may be required as a result of a change in law or in
GAAP after the date hereof, change any of the accounting principles or
practices used by it;
(f) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary course of business of liabilities reflected or reserved against
in, or contemplated by, the financial statements (or the notes thereto) of
the Company incurred in the ordinary course of business consistent with
past practice;
(g) authorize, commit to or make any equipment purchases or capital
expenditures other than in the ordinary course of business and consistent
with past practice (provided, that such purchases and/or expenditures
shall, in the aggregate, be no more than $250,000) or as shown on Schedule
6.1(g); or
(h) take or agree to take any of the foregoing actions or any action
that would, or is reasonably likely to, result in any of its
representations and warranties set forth in this Agreement becoming untrue,
or in any of the conditions to the Merger set forth in Article VII not
being satisfied.
Section 6.2 Access to Information. Upon reasonable notice, the Company
shall (and shall cause each of its subsidiaries to) afford to Acquiror and its
officers, employees, accountants, counsel, financing sources and other
representatives, access, during normal business hours during the period prior to
the earlier of the
15
<PAGE> 19
Effective Time or the date of termination of this Agreement, to all its
properties, books, contracts, commitments and records and, during such period,
the Company shall (and shall cause each of the Company Subsidiaries to) furnish
promptly to Acquiror (a) a copy of each report, schedule, registration statement
and other document filed or received by it during such period pursuant to the
requirements of federal securities laws and (b) all other information concerning
its business, properties and personnel as Acquiror may reasonably request;
provided, however, that nothing herein shall require the Company or any of its
subsidiaries to disclose any information to Acquiror if such disclosure would be
in violation of applicable laws or regulations of any Governmental Entity or the
provisions of any confidentiality agreement to which the Company is a party.
Unless otherwise required by law and until the Effective Time Acquiror and its
representatives will hold any such information which is non-public in confidence
in accordance with the provisions of the Confidentiality Agreements between the
Company and Acquiror, dated as of November 19 and November 25, 1998 (the
"Confidentiality Agreements").
Section 6.3 Employee Benefit Matters.
(a) Effective as of the Effective Time and for a two-year period
thereafter, the Company and the Company Subsidiaries and successors shall
(i) provide those Persons who, immediately prior to the Effective Time,
were employees ("Company Employees") of the Company or the Company
Subsidiaries on the Closing Date with employee benefits that are
substantially similar in the aggregate as those provided to such Company
Employees pursuant to the Benefit Plans immediately prior to the Effective
Time.
(b) Following the Effective Time, the Company will continue to honor,
pursuant to the terms thereof, all Employee Agreements for the benefit of
any employees and former employees of the Company or any Company
Subsidiary, including, without limitation, those Employee Agreements set
forth in Section 6.3(b) of the Company Disclosure Letter.
(c) As of the Effective Time, the Ameriwood Industries Employee Stock
Ownership and Savings Plan and Trust Agreement (the "Company ESOP") will be
amended to provide that the Company ESOP will be frozen with respect to
participation and benefit accrual in the part of the Company ESOP that is
an employee stock ownership plan and that no further contributions will be
made to or distributions will be made from such portion of the Company
ESOP; provided, however, that immediately prior to the Effective Time, the
Company shall make a pro rata contribution to the Company ESOP in respect
of the plan year, which plan year shall be deemed to have ended at the
Effective Time, in accordance with the terms of the Company ESOP and
applicable law. The amendment to the Company ESOP will further provide that
following the Effective Time, each participant in the Company ESOP will be
entitled to direct the investment of the balance in his or her Company ESOP
account into one or more of the investment alternatives provided under the
401(k) portion of the Company ESOP (other than Shares), in accordance with
the terms of the Company ESOP and applicable law.
(d) For purposes of this Section 6.3, the term "Company Employees"
shall mean all employees of the Company and the Company Subsidiaries
immediately prior to the Effective Time, including those on disability or
leave of absence, paid or unpaid.
(e) The Company shall pay all bonuses earned for fiscal year 1997 in
accordance with the Company's past practice.
(f) In the event the Company or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its
properties and assets to any person, then, and in each such case, to the
extent necessary to effectuate the purposes of this Section 6.3, proper
provision shall be made so that the successors and assigns of Company,
assume the obligations set forth in this Section 6.3 and none of the
actions described in clauses (i) or (ii) of this Section 6.3(f) shall be
taken until such provision is made.
16
<PAGE> 20
Section 6.4 No Solicitation.
(a) The Company will not, and will cause any officers, directors,
employees and investment bankers, attorneys or other agents retained by the
Company or any of its subsidiaries not to, (i) directly or indirectly
solicit, initiate or knowingly encourage (including by way of furnishing
non-public information), or take any other action knowingly to facilitate
any inquiries or the making of any Acquisition Proposal (as hereinafter
defined), or (ii) except as permitted below, engage in negotiations or
discussions with, or furnish any information or data to any third party
relating to, or that may reasonably be expected to lead to, an Acquisition
Proposal (other than the transactions contemplated hereby). Notwithstanding
anything to the contrary contained in this Section 6.4 or in any other
provision of this Agreement, the Company, and its officers, directors,
investment bankers, attorneys or agents, may:
(i) participate in discussions or negotiations (including, as a
part thereof, making any counterproposal) with or furnish information to
any third party making an unsolicited Acquisition Proposal (a "Potential
Acquiror") if: (A) the Company Board determines in good faith, after
consultation with ABN-AMRO or another financial advisor of nationally
recognized standing, that such third party is reasonably likely to
submit an Acquisition Proposal which is a Superior Proposal (as
hereinafter defined), and (B) the Company Board determines in good
faith, based upon advice of outside legal counsel, that the failure to
participate in such discussions or negotiations or to furnish such
information is reasonably likely to be inconsistent with the Company
Board's fiduciary duties under applicable law, or
(ii) following receipt of an Acquisition Proposal, disclose to its
shareholders the Company's position contemplated by Rules 14d-9 and
14e-2 under the Exchange Act or otherwise make any other necessary
disclosure to its shareholders related to an Acquisition Proposal.
The Company agrees that any non-public information furnished to a Potential
Acquiror will be pursuant to a confidentiality agreement substantially similar
to the confidentiality provisions of the confidentiality agreement entered into
between the Company and Acquiror. In the event that the Company shall receive
any Acquisition Proposal, it shall promptly inform Acquiror in writing as to the
terms of such Acquisition Proposal, and if the Acquisition Proposal is in
writing the Company shall provide the Acquiror a true and complete copy thereof,
and will keep Acquiror reasonably informed of the status (including amendments
or proposed amendments) of any such Acquisition Proposal, except to the extent
that the Company Board determines in good faith, after consultation with its
outside legal counsel, that any such action with respect to a Superior Proposal
that by its terms expressly prohibits any disclosure of the terms of such
Superior Proposal and described in this sentence is reasonably likely to be
inconsistent with Company Board's fiduciary duties under applicable law.
(b) For purposes of this Agreement, "Acquisition Proposal" shall mean
any bona fide proposal made by a third party to acquire (i) beneficial
ownership (as defined under Rule 13(d) of the Exchange Act) of a 15% or
greater equity interest in the Company pursuant to a merger, consolidation
or other business combination, sale of shares of capital stock, tender
offer or exchange offer or similar transaction involving the Company
including, without limitation, any single or multi-step transaction or
series of related transactions which is structured in good faith to permit
such third party to acquire beneficial ownership of a 15% or greater equity
interest in the Company or (ii) all or a substantial part of the business
or assets or any equity interest in, or voting securities of, of the
Company (other than the transactions contemplated by this Agreement).
(c) The term "Superior Proposal" shall mean any Acquisition Proposal
which the Company Board, determines in good faith, after consultation with
ABN-AMRO or another financial advisor of nationally recognized standing, to
be more favorable to such party and its shareholders than the transactions
contemplated hereby.
(d) The Company shall immediately cease and cause to be terminated any
discussions or negotiations existing as of the date hereof with any parties
(other than the Acquiror and the Merger Sub)
17
<PAGE> 21
conducted heretofore with respect to any of the foregoing. The Company
agrees not to release any third party from any confidentiality or
standstill agreement to which the Company is a party.
Section 6.5 Publicity. The initial press release with respect to the
execution of this Agreement shall be a joint press release acceptable to
Acquiror and the Company. Thereafter, so long as this Agreement is in effect,
neither the Company, Acquiror nor any of their respective affiliates shall issue
or cause the publication of any press release or other announcement with respect
to the Merger, this Agreement or the other transactions contemplated hereby
without the prior consultation of the other party, except as may be required by
law or by any listing agreement with a national securities exchange.
Section 6.6 Directors' and Officers' Insurance and Indemnification.
(a) From and after the Effective Time, the Surviving Corporation shall
indemnify, defend and hold harmless any person who is now, or has been at
any time prior to the date hereof, or who becomes prior to the Effective
Time, an officer, director, employee and agent (the "Indemnified Party") of
the Company and its subsidiaries against all losses, claims, damages,
liabilities, costs and expenses (including attorney's fees and expenses),
judgments, fines, losses, and amounts paid in settlement in connection with
any actual or threatened action, suit, claim, proceeding or investigation
(each a "Claim") to the extent that any such Claim is based on, or arises
out of, (i) the fact that such person is or was a director, officer,
employee or agent of the Company or any of its subsidiaries or is or was
serving at the request of the Company or any of its subsidiaries as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, or (ii) this Agreement, or any of
the transactions contemplated hereby, in each case to the extent that any
such Claim pertains to any matter or fact arising, existing, or occurring
prior to or at the Effective Time, regardless of whether such Claim is
asserted or claimed prior to, at or after the Effective Time, to the full
extent permitted under Michigan law or the Company's Articles of
Incorporation, By-laws or indemnification agreements in effect at the date
hereof, including provisions relating to advancement of expenses incurred
in the defense of any action or suit; provided, however, that the Surviving
Corporation shall not be liable for any settlement effected without its
written consent (which consent shall not be unreasonably withheld). Without
limiting the foregoing, in the event any Indemnified Party becomes involved
in any capacity in any Claim, then from and after the Effective Time, the
Surviving Corporation shall periodically advance to such Indemnified Party
its legal and other expenses (including the cost of any investigation and
preparation incurred in connection therewith), subject to the provision by
such Indemnified Party of an undertaking to reimburse the amounts so
advanced in the event of a final non-appealable determination by a court of
competent jurisdiction that such Indemnified Party is not entitled thereto.
The Indemnified Parties as a group may retain only one law firm with
respect to each related matter except to the extent there is or is
reasonably likely to be, in the opinion of counsel to the Indemnified
Party, under applicable standards of professional conduct, a conflict on
any significant issue between positions of any two or more Indemnified
Parties.
(b) The Company agrees that all rights to indemnification and all
limitations or liability existing in favor of the Indemnified Party as
provided in the Company's Articles of Incorporation and By-laws as in
effect as of the date hereof shall continue in full force and effect,
without any amendment thereto; provided that any determination required to
be made with respect to whether an Indemnified Party's conduct complies
with the standards set forth under Michigan law, the Company's Articles of
Incorporation or By-laws or such agreements, as the case may be, shall be
made by independent legal counsel selected by the Indemnified Party and
reasonably acceptable to Company; and provided further, that nothing in
this Section 6.6 shall impair any rights or obligations of any present or
former directors or officers of the Company.
(c) In the event the Company or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its
properties and assets to any person, then, and in each such case, to the
extent necessary to effectuate the purposes of this Section 6.6, proper
provision shall be made so that the successors and assigns of the Company
assume the obligations set
18
<PAGE> 22
forth in this Section 6.6 and none of the actions described in clauses (i)
or (ii) shall be taken until such provision is made.
(d) The Surviving Corporation shall maintain the Company's existing
officers' and directors' liability insurance policy ("D&O Insurance") for a
period of not less than six years after the Effective Time; provided,
however, that in no event shall the Surviving Corporation be required to
expend in any one year an amount in excess of 150% of the last annual
premium paid by the Company for such insurance and if the annual premiums
exceed such amount, the Surviving Corporation shall be obligated to obtain
a policy with the greatest coverages available for a cost not exceeding
such amount; provided further the Surviving Corporation may substitute
therefor policies of substantially similar coverage and amounts containing
terms no less advantageous to such former directors or officers with
respect to acts or omissions occurring prior to the Effective Time or
individual coverage and provided that such substitution shall not result in
any gaps or lapses in coverage with respect to acts or omissions occurring
prior to the Effective Time; provided further, if the existing D&O
Insurance expires, is terminated or cancelled during such period, the
Surviving Corporation will use its best efforts to obtain substantially
similar D&O Insurance.
Section 6.7 Proxy Statement.
(a) If required by applicable law, the Company shall prepare as soon
as practicable, following the date of this Agreement, and shall file with
the SEC the Proxy Statement. The Company will cause the Proxy Statement to
comply as to form in all material respects with the applicable provisions
of the Exchange Act and the rules and regulations thereunder.
(b) The Proxy Statement will be mailed to the shareholders of the
Company as promptly as practicable after the effectiveness of this
Agreement. The Company shall include in the Proxy Statement the
recommendation of the Company Board that its shareholders vote in favor of
the approval of the Merger and the adoption of this Agreement; provided,
however, that the Company Board may withdraw, modify or change such
recommendation to the extent that the Company Board determines in good
faith, upon advice of outside legal counsel, that the failure to withdraw,
modify or change such recommendation is reasonably likely to be
inconsistent with the Company Board's fiduciary duties under applicable
law.
(c) (i) The information supplied by the Company for inclusion in the
Proxy Statement shall not, at the time that the Proxy Statement is mailed
to the shareholders of the Company, include an untrue statement of a
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.
(ii) The information supplied in writing by the Acquiror or the
Merger Sub for inclusion in the Proxy Statement shall not, at the time
that the Proxy Statement is mailed to the shareholders of the Company,
include an untrue statement of a 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.
(d) No amendment or supplement to the Proxy Statement will be made
without the approval of each of the Company and Acquiror, which approval
will not be unreasonably withheld or delayed.
Section 6.8 Shareholders' Meetings.
(a) As soon as practicable after the consummation of the Offer, the
Company, acting through the Company Board, shall, in accordance with
applicable law and its Articles of Incorporation, and for the purpose of
approving this Agreement and the transactions contemplated hereby, duly
call, give notice of, convene and hold a special meeting of the
shareholders of the Company.
(b) Notwithstanding the foregoing, in the event that the Merger Sub
shall acquire at least 90% of the then outstanding Shares, the parties
hereto agree, at the request of the Merger Sub, subject to Article VII, to
take all necessary and appropriate action to cause the Merger to become
effective, in
19
<PAGE> 23
accordance with Section 253 of the DGCL and Section 711 of the MBCA, as
soon as reasonably practicable after such acquisition, without a meeting of
the stockholders of the Company.
Section 6.9 Approvals and Consents; Cooperation.
(a) The parties hereto shall use all reasonable efforts, and cooperate
with each other, to obtain as promptly as practicable all governmental and
third party authorizations, approvals, consents or waivers, including,
without limitation, pursuant to the HSR Act, required in order to
consummate the transactions contemplated by this Agreement, including,
without limitation, the Merger.
(b) The Company and Acquiror shall take all actions necessary to file
as soon as practicable all notifications, filings and other documents
required to obtain all governmental authorizations, approvals, consents or
waivers, including, without limitation, under the HSR Act, and to respond
as promptly as practicable to any inquiries and requests received from the
Federal Trade Commission, the Antitrust Division of the Department of
Justice and any other Governmental Entity for additional information or
documentation in connection therewith.
(c) The Company shall give prompt notice to Acquiror of the occurrence
of any Company Material Adverse Effect, and Acquiror shall give prompt
notice to the Company of the occurrence of any Acquiror Material Adverse
Effect. Each of the Company and Acquiror shall give prompt notice to the
other of the occurrence or failure to occur of an event that would, or,
with the lapse of time would, cause any condition contained in Article VII
not to be satisfied.
Section 6.10 Further Assurances. Each of the parties hereto agrees to use
its reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated by this Agreement, including, without limitation, the Offer and the
Merger, which efforts shall include, without limitation, (a) Company, Acquiror
and the Merger Sub using their reasonable efforts to prevent any preliminary or
permanent injunction or other order by a court of competent jurisdiction or
Governmental Entity relating to consummating the transactions contemplated by
this Agreement, including, without limitation, under the antitrust laws, and, if
issued, to appeal any such injunction or order through the appellate court or
body for the relevant jurisdiction and (b) Company, Acquiror and the Merger Sub
using their reasonable efforts to satisfy any objections of, and accept any
conditions imposed by, any Governmental Entity, except where such objection or
condition would have a Company or Acquiror Material Adverse Effect. If at any
time after the Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement, the parties hereto shall take or cause
to be taken all such necessary action, including, without limitation, the
execution and delivery of such further instruments and documents as may be
reasonably requested by the other party for such purposes or otherwise to
consummate and make effective the transactions contemplated hereby.
Section 6.11 Rights Agreement. The Company shall take all necessary action
prior to the Effective Time to cause the dilution provisions of the Rights
Agreement, dated April 4, 1996, between the Company and Harris Trust and Savings
Bank (the "Company Rights Agreement") to be inapplicable to the transactions
contemplated by this Agreement, without any payment to holders of common share
purchase rights ("Rights") issued pursuant to such Company Rights Agreement.
Section 6.12 Company Board Representation; Section 14(f). (a) Promptly upon
the purchase by the Merger Sub of Shares pursuant to the Offer, and from time to
time thereafter, the Merger Sub shall be entitled to designate up to such number
of directors, rounded up to the next whole number, on the Company Board as shall
give the Merger Sub representation on the Company Board equal to the product of
the total number of directors on the Company Board (giving effect to the
directors elected pursuant to this sentence) multiplied by the percentage that
the aggregate number of Shares beneficially owned by the Merger Sub or any
affiliate of the Merger Sub following such purchase bears to the total number of
Shares then outstanding, and the Company shall, at such time, promptly take all
actions necessary to cause the Merger Sub's designees to be elected as directors
of the Company, including increasing the size of the Company Board or securing
the resignations of incumbent directors or both. At such times, the Company
shall use its best efforts to cause
20
<PAGE> 24
persons designated by the Merger Sub to constitute the same percentage as is on
the Company's Board of (i) each committee of the Company Board, (ii) each board
of directors of each Company Subsidiary and (iii) each committee of each such
board, in each case only to the extent permitted by applicable law.
Notwithstanding the foregoing, until the earlier of (i) the time the Merger Sub
acquires a majority of the then outstanding Shares on a fully diluted basis and
(ii) the Effective Time, the Company shall use its best efforts to ensure that
all the members of the Company Board and each committee of the Company Board and
such boards and committees of the Subsidiaries as of the date hereof who are not
employees of the Company shall remain members of the Company Board and of such
boards and committees; provided however, the Company shall maintain at least one
non-employee director until the Effective Time.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
to fulfill its obligations under this Section 6.12 and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers and
directors as is required under Section 14(f) and Rule 14f-1 to fulfill such
obligations. Acquiror or the Merger Sub shall supply to the Company and be
solely responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the election of designees of the Merger Sub pursuant to this
Section 6.12, prior to the Effective Time, any amendment of this Agreement or
the Articles of Incorporation or By-laws of the Company, any termination of this
Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Acquiror or the Merger
Sub or waiver of any of the Company's rights hereunder shall require the
concurrence of a majority of the directors of the Company then in office who
neither were designated by the Merger Sub nor are employees of the Company.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party's Obligations. The respective
obligation of each party to effect the Merger shall be subject to the
satisfaction (or, if permissible, waiver by the party for whose benefit such
conditions exist) at or prior to the Effective Time of the following conditions:
(a) this Agreement, the Merger and the transactions contemplated
hereby shall, if necessary, have been approved and adopted by the requisite
vote of the shareholders of the Company in accordance with applicable law
and regulatory requirements and the Company's Articles of Incorporation;
(b) any waiting period applicable to the Merger under the HSR Act
shall have expired or been terminated;
(c) no order, injunction or decree issued by any court or agency of
competent jurisdiction or other legal restraint or prohibition preventing
the consummation of the Merger or any of the other transactions
contemplated by this Agreement shall be in effect, and no statute, rule,
regulation, order, injunction or decree shall have been enacted, entered,
promulgated or enforced by any Governmental Entity which prohibits,
restricts or makes illegal the consummation of the Merger, provided,
however, that the parties shall have used reasonable efforts to prevent any
such rule, regulation, injunction, decree or other order, and to appeal as
promptly as possible any injunction, decree or other order that may be
entered;
(d) all authorizations, approvals or consents required to permit the
consummation of the Merger shall have been obtained and be in full force
and effect, except where the failure to have obtained any such
authorizations, approvals or consents would not have a Company Material
Adverse Effect; and.
(e) The Merger Sub or its permitted assignee shall have purchased all
Shares validly tendered and not withdrawn pursuant to the Offer; provided,
however, that this condition shall not be applicable to the obligations of
Acquiror or the Merger Sub if, in breach of this Agreement or the terms of
the Offer, the Merger Sub fails to purchase any Shares validly tendered and
not withdrawn pursuant to the Offer.
21
<PAGE> 25
ARTICLE VIII
TERMINATION
Section 8.1 Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the Merger contemplated
herein may be abandoned at any time prior to the Effective Time, whether before
or after stockholder approval thereof:
(a) By the mutual consent of the Company, Acquiror and the Merger Sub.
(b) By either of the Company, on the one hand, or Acquiror and the
Merger Sub, on the other hand:
(i) if the Effective Time shall not have occurred on or prior to
September 30, 1998; provided, however, that the right to terminate this
Agreement under this Section 8.1(b)(i) shall not be available to any
party whose failure to fulfill any obligation under this Agreement has
been the cause of, or resulted in, the failure of the Merger to occur on
or prior to such date;
(ii) if there shall have been issued an order, decree or ruling or
taken any other action (which order, decree, ruling or other action the
parties hereto shall use their respective best efforts to lift), in each
case permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree,
ruling or other action shall have become final and non-appealable;
provided, however, if the party seeking termination is Acquiror,
Acquiror shall have complied fully with its obligations under Section
6.9; or
(iii) if, at the Special Meeting (including any adjournment or
postponement thereof) called pursuant to Section 6.8, the requisite vote
of the shareholders of the Company for the Merger shall not have been
obtained.
(c) By the Company:
(i) upon two days prior written notice if the Company Board shall
have (A) withdrawn, or modified or changed in a manner adverse to
Acquiror its approval or recommendation of this Agreement, the Offer or
the Merger, or resolved to do any of the foregoing, and (B) (x)
determined in good faith, after consultation with ABN-AMRO or another
financial advisor of nationally recognized standing, that a third party
has submitted to the Company an Acquisition Proposal which is a Superior
Proposal, and (y) determined in good faith, upon the advice of outside
legal counsel, that the failure to take such action as set forth in the
preceding clause (A) is reasonably likely to be inconsistent with the
Company Board's fiduciary duties under applicable law;
(ii) if Acquiror or the Merger Sub (x) breaches or fails in any
material respect to perform or comply with any of its material covenants
and agreements contained herein or (y) breaches its representations and
warranties in any material respect and such breach would have a Acquiror
Material Adverse Effect, in each case such that the conditions set forth
in Section 7.1 or Section 7.2 would not be satisfied; provided, however,
that if any such breach is curable by the breaching party through the
exercise of the breaching party's best efforts and for so long as the
breaching party shall be so using its best efforts to cure such breach,
the Company may not terminate this Agreement pursuant to this Section
8.1(c)(ii); or
(iii) upon approval of the Company Board, if due to an occurrence
or circumstance that would result in a failure to satisfy any of the
conditions set forth in Annex A hereto, the Merger Sub shall have failed
to commence the Offer on or prior to five days following the date of
initial public announcement of this Agreement; provided, however, the
Company may not terminate this Agreement pursuant to Section 8.1(c)(iii)
if the Company is at such time in breach of its obligations under this
Agreement.
22
<PAGE> 26
(d) By Acquiror and the Merger Sub:
(i) if the Company (x) breaches or fails in any material respect to
perform or comply with any of its material covenants and agreements
contained herein or (y) breaches its representations and warranties in
any material respect and such breach would have a Company Material
Adverse Effect, in each case such that the conditions set forth in
Section 7.1 or Section 7.3 would not be satisfied; provided, however,
that if any such breach is curable by the Company through the exercise
of the Company's best efforts and for so long as the Company shall be so
using its best efforts to cure such breach, Acquiror may not terminate
this Agreement pursuant to this Section 8.1(d)(i);
(ii) if the Company Board shall have withdrawn, modified or changed
in a manner adverse to Acquiror its approval or recommendation of this
Agreement, the Offer or the Merger or shall have recommended an
Acquisition Proposal involving the Company or shall have executed an
agreement in principle or definitive agreement relating to an
Acquisition Proposal involving the Company or similar business
combination with a person or entity other than Acquiror or its
affiliates (or the Company Board resolves to do any of the foregoing);
or
(iii) if due to an occurrence or circumstance that would result in
a failure to satisfy any condition set forth in Annex A hereto, the
Merger Sub shall have failed to commence the Offer on or prior to five
days following the initial public announcement of this Agreement;
provided, however, Acquiror and the Merger Sub may not terminate this
Agreement pursuant to Section 8.1(d)(iii) if the Acquiror or the Merger
Sub is at such time in breach of its obligations under this Agreement.
Section 8.2 Effect of Termination.
(a) In the event of the termination of this Agreement as provided in
Section 8.1, written notice thereof shall forthwith be given to the other
party or parties specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall forthwith become null and
void, and there shall be no liability on the part of Acquiror or the
Company or their respective directors, officers, employees, shareholders,
representatives, agents or advisors other than, with respect to Acquiror
and the Company, the obligations pursuant to this Section 8.2, and the last
sentence of Section 6.2. Nothing contained in this Section 8.2 shall
relieve Acquiror or the Company from liability for willful breach of this
Agreement.
(b) If this Agreement is terminated:
(A) by either the Acquiror or the Company pursuant to Section
8.1(b)(iii) or by the Acquiror pursuant to Section 8.1(d)(i) and any
person (other than Acquiror or any of its affiliates) shall have made a
bona fide Acquisition Proposal to the Company that becomes disclosed to
the public prior to the Special Meeting, and within one year after the
effective date of such termination the Company is the subject of a Third
Party Acquisition Event (as defined below) with such person,
(B) by the Company pursuant to Section 8.1(c)(i), or
(C) by Acquiror pursuant to Section 8.1(d)(ii),
then at the time of termination with respect to (B) or (C) above or the
time of execution of a definitive agreement regarding such a Third Party
Acquisition Event with respect to (A) above, the Company shall pay to the
Acquiror a fee of $1,500,000 in cash (the "Fee") and reimburse the Acquiror
for its reasonable out-of-pocket costs incurred by Acquiror or on behalf of
Acquiror in connection with this Agreement and the transactions
contemplated hereby up to an amount not to exceed $1,500,000. The Company
shall not enter into any agreement with respect to any Third Party
Acquisition Event which does not, as a condition precedent to the execution
of such agreement, require such reimbursement of expenses and the Fee to be
paid to Acquiror upon such execution.
(c) As used herein, the term "Third Party Acquisition Event" shall
mean either of the following:
(i) the Company shall agree to, consummate, or announce its
intention to enter into any agreement relating to an Acquisition
Proposal; or
23
<PAGE> 27
(ii) any person (other than a party hereto or its affiliates) shall
have acquired beneficial ownership (as such term is defined in Rule
13d-3 under the Exchange Act) or the right to acquire beneficial
ownership of, or a new group has been formed which beneficially owns or
has the right to acquire beneficial ownership of, 15% or more of the
outstanding Common Stock.
(d) The obligations of the Company and Acquiror under this Section 8.2
shall survive any termination of this Agreement. In the event of an
occurrence pursuant to Sections 8.2(b)(A), 8.2(b)(B), or 8.2(b)(C) which
shall give rise to the payment of the Fee and expenses pursuant to Section
8.2(b), the payment of the Fee and any such expenses shall be the sole and
exclusive remedy of Acquiror.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified and supplemented in any and all respects,
whether before or after any vote of the shareholders of the Company contemplated
hereby, by written agreement of the parties hereto, by action taken by their
respective Boards of Directors, at any time prior to the Closing Date with
respect to any of the terms contained herein; provided, however, that after the
approval of this Agreement by the shareholders of the Company, no such
amendment, modification or supplement shall reduce or change the Cash
Consideration or adversely affect the rights of the Company's shareholders
hereunder without the approval of such shareholders.
Section 9.2 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any schedule, instrument
or other document delivered pursuant to this Agreement shall survive the
Effective Time or the termination of this Agreement. This Section 9.2 shall not
limit any covenant or agreement contained in this Agreement which by its terms
contemplates performance after the Effective Time or termination.
Section 9.3 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, telecopied
(which is confirmed) or sent by an overnight courier service, such as Federal
Express, to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(a) if to Acquiror or the Merger Sub, to:
Dorel Industries Inc.
4750 Boulevard des Grande Prairies
St. Leonard, Quebec H1R 1A3
Telephone No.: (514) 323-5701
Telecopy No.: (514) 323-9621
Attention: Martin Schwartz
with a copy to:
Shearman & Sterling
Commerce Court West, Suite 4405
Toronto, Ontario M5L 1E8
Telephone No.: (416) 360-8484
Telecopy No.: (416) 360-2958
Attention: Bruce Czachor, Esq.
and
24
<PAGE> 28
(b) if to the Company, to:
Ameriwood Industries
International Corporation
168 Louis Campau Promenade
Suite 400
Grand Rapids, Michigan 49503
Telephone No.: (616) 336-9400
Telecopy No.: (616) 336-9401
Attention: Charles R. Foley
with a copy to:
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606
Telephone No.: (312) 407-0700
Telecopy No.: (312) 407-0411
Attention: William R. Kunkel, Esq.
Section 9.4 Interpretation. The words "hereof", "herein" and "herewith" and
words of similar import shall, unless otherwise stated, be construed to refer to
this Agreement as a whole and not to any particular provision of this Agreement,
and article, section, paragraph, exhibit and schedule references are to the
articles, sections, paragraphs, exhibits and schedules of this Agreement unless
otherwise specified. The word "or" shall be construed to refer to "and/or."
Whenever the words "include", "includes" or "including" are used in this
Agreement they shall be deemed to be followed by the words "without limitation".
The 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. The phrase "to the best knowledge of" or any similar phrase shall mean
such facts and other information which as of the date of this Agreement are
actually known to any executive officer of the referenced party. The phrase
"made available" in this Agreement shall mean that the information referred to
has been made available if requested by the party to whom such information is to
be made available. The phrases "the date of this Agreement", "the date hereof"
and terms of similar import, unless the context otherwise requires, shall be
deemed to refer to March 27, 1998. As used in this Agreement, the term
"affiliate(s)" shall have the meaning set forth in Rule 12b-2 of the Exchange
Act. The parties have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
Section 9.5 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 9.6 Entire Agreement; Third Party Beneficiaries. This Agreement,
the Tender and Option Agreements and the Confidentiality Agreements (including
the documents and the instruments referred to herein and therein) constitute the
entire agreement and supersede all prior agreements and understandings,
including, without limitation, all representations and warranties made by the
parties in connection herewith, both written and oral, among the parties with
respect to the subject matter hereof. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended or shall confer upon any other person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement,
other than (i) Section 6.6 (which is intended to be for the benefit of the
directors and officers of the Company and Indemnified Parties, as applicable,
and may be enforced by such directors, officers and Indemnified Parties) and
(ii) Sections 3.2 and 6.3 (which are intended to be for the benefit of the
directors, officers and employees of the Company and its subsidiaries and may be
enforced by such persons).
25
<PAGE> 29
Section 9.7 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void, unenforceable or against its regulatory policy,
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.
Section 9.8 Governing Law.
(a) This Agreement shall be governed and construed in accordance with
the laws of the State of Delaware without giving effect to the principles
of conflicts of law thereof or of any other jurisdiction.
(b) Each of the parties hereto (i) consents to submit itself to the
personal jurisdiction of any Federal court located in the State of Delaware
or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated hereby, (ii) agrees that
it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and (iii) agrees that it
will not bring any action relating to this Agreement or any of the
transactions contemplated hereby in any court other than a Federal or state
court sitting in the State of Delaware.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.8.
Section 9.9 Specific Performance. Each of the parties hereto acknowledges
and agrees that in the event of any breach of this Agreement, each non-breaching
party would be irreparably and immediately harmed and could not be made whole by
monetary damages. It is accordingly agreed that the parties hereto (a) will
waive, in any action for specific performance, the defense of adequacy of a
remedy at law and (b) shall be entitled, in addition to any other remedy to
which they may be entitled at law or in equity, to compel specific performance
of this Agreement in any action instituted in a court of competent jurisdiction.
Section 9.10 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective permitted successors and assigns.
Section 9.11 Expenses. Except as set forth in Section 8.2, all costs and
expenses incurred in connection with this Agreement and the consummation of the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses, whether or not any of the transactions contemplated hereby is
consummated.
Section 9.12 Headings. Headings of the Articles and Sections of this
Agreement are for convenience of the parties only, and shall be given no
substantive or interpretative effect whatsoever.
Section 9.13 Waivers. Except as otherwise provided in this Agreement, any
failure of any of the parties to comply with any obligation, covenant, agreement
or condition herein may be waived by the party or parties entitled to the
benefits thereof only by a written instrument signed by the party granting such
waiver, but such
26
<PAGE> 30
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
IN WITNESS WHEREOF, Acquiror, the Merger Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
AMERIWOOD INDUSTRIES
INTERNATIONAL CORPORATION
By: /s/ NEIL L. DIVER
------------------------------------
Name: Neil L. Diver
Title: Chairman of the Board
DOREL INDUSTRIES INC.
By: /s/ MARTIN SCHWARTZ
------------------------------------
Name: Martin Schwartz
Title: President and Chief Executive
Officer
HORIZON ACQUISITION, INC.
By: /s/ MARTIN SCHWARTZ
------------------------------------
Name: Martin Schwartz
Title: President
27
<PAGE> 31
ANNEX A
CONDITIONS TO THE OFFER
Notwithstanding any other provision of the Offer, the Merger Sub shall not
be required to accept for payment or pay for any Shares tendered pursuant to the
Offer, and may terminate or amend the Offer and may postpone the acceptance for
payment of and payment for Shares tendered, if (i) the Minimum Condition shall
not have been satisfied, (ii) any applicable waiting period under the HSR Act
shall not have expired or been terminated prior to the expiration of the Offer,
or (iii) at any time on or after the date of this Agreement, and prior to the
acceptance for payment of Shares, any of the following conditions shall exist:
(a) there shall have been instituted or be pending any action or
proceeding before any court or governmental, administrative or regulatory
authority or agency, domestic or foreign, (i) challenging or seeking to
make illegal, materially delay or otherwise directly or indirectly restrain
or prohibit or make materially more costly the making of the Offer, the
acceptance for payment of, or payment for, any Shares by Acquiror, the
Merger Sub or any other affiliate of Acquiror or the consummation of any
other transaction contemplated hereby or thereby, or seeking to obtain
material damages in connection with any transaction contemplated hereby or
thereby; (ii) seeking to prohibit or limit materially the ownership or
operation by the Company, Acquiror or any of their subsidiaries of all or
any material portion of the business or assets of the Company, Acquiror or
any of their subsidiaries, or to compel the Company, Acquiror or any of
their subsidiaries to dispose of or hold separate all or any material
portion of the business or assets of the Company, Acquiror or any of their
subsidiaries, as a result of the transactions contemplated hereby; (iii)
seeking to impose or confirm limitations on the ability of Acquiror, the
Merger Sub or any other affiliate of Acquiror to exercise effectively full
rights of ownership of any Shares, including, without limitation, the right
to vote any Shares acquired by the Merger Sub pursuant to the Offer or
otherwise on all matters properly presented to the Company's stockholders,
including, without limitation, the approval and adoption of this Agreement
and the transactions contemplated hereby; (iv) seeking to require
divestiture by Acquiror, the Merger Sub or any other affiliate of Acquiror
of any Shares; or (v) which otherwise has an Acquiror Material Adverse
Effect;
(b) there shall have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to (i) Acquiror, the Company or any subsidiary or affiliate of
Acquiror or the Company or (ii) any transaction contemplated hereby, by any
legislative body, court, government or governmental, administrative or
regulatory authority or agency, domestic or foreign, other than the routine
application of the waiting period provisions of the HSR Act to the Offer or
the Merger, which is reasonably likely to result, directly or indirectly,
in any of the consequences referred to in clauses (i) through (v) of
paragraph (a) above;
(c) there shall have occurred any change, condition, event or
development that has a Company Material Adverse Effect, provided, however,
that no event, change or effect that primarily results from this Agreement,
the Merger, the Offer and the transactions contemplated thereby or the
announcement thereof shall be deemed to cause either individually or in the
aggregate a Company Material Adverse Effect;
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on NASDAQ for the Company
for a period in excess of 24 hours (excluding suspensions or limitations
resulting solely from physical damage or interference with such exchange
not related to market conditions), (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or Canada, (iii) any limitation (whether or not mandatory) by any
government or governmental, administrative or regulatory authority or
agency, domestic or foreign, on, or other event that, in the reasonable
judgment of the Merger Sub, might affect, the extension of credit by banks
or other lending institutions, (iv) a commencement of a war or armed
hostilities or other national or international calamity directly or
indirectly involving the United States or Canada or (v) in the case of any
of the foregoing existing on the date hereof, a material acceleration or
worsening thereof;
A-1
<PAGE> 32
(e) (i) it shall have been publicly disclosed or the Merger Sub shall
have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under the
Exchange Act) of 15% or more of the then outstanding Shares has been
acquired by any person, other than Acquiror or any of its affiliates or
(ii) the Company Board shall have withdrawn or modified in an manner
adverse to Acquiror or the Merger Sub the approval or recommendation of the
Offer, the Merger or this Agreement, or approved or recommended any
takeover proposal or any other acquisition of Shares other than the Offer
and the Merger (or resolved to do any of the foregoing);
(f) any representation or warranty of the Company in this Agreement
which is qualified as to materiality shall not be true and correct or any
such representation or warranty that is not so qualified shall not be true
and correct in any material respect, in each case as if such representation
or warranty was made as of such time on or after the date of this Agreement
(except for a representation or warranty which references a particular
date);
(g) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under this
Agreement;
(h) this Agreement shall have been terminated in accordance with its
terms; or
(i) The Merger Sub and the Company shall have agreed in writing that
the Merger Sub shall terminate the Offer or postpone the acceptance for
payment of or payment for Shares thereunder;
which, in the sole judgment of the Merger Sub in any such case, and regardless
of the circumstances (including any action or inaction by Acquiror or any of its
affiliates) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Merger Sub and
Acquiror and may be asserted by the Merger Sub or Acquiror regardless of the
circumstances giving rise to any such condition or may be waived by the Merger
Sub or Acquiror in whole or in part at any time and from time to time in their
sole discretion. The failure by Acquiror or the Merger Sub at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right; the waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances; and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
A-2
<PAGE> 33
DEFINED TERMS INDEX
The following defined terms have the meaning defined in the indicated
Section of the Agreement and Plan of Merger:
<TABLE>
<CAPTION>
DEFINED TERM SECTION
------------ -------
<S> <C>
Acquisition Proposal........................................ 6.5(a)
ABN-AMRO.................................................... 1.2
Acquiror.................................................... Preamble
Acquiror Material Adverse Effect............................ 5.1
Acquiror Agreements......................................... 5.3
Articles of Incorporation................................... 2.4(a)
Agreement................................................... Preamble
Benefit Plans............................................... 4.9(a)
Cash Consideration.......................................... 3.1(c)
Certificates................................................ 3.3(b)
Claim....................................................... 6.7(a)
Closing..................................................... 2.6
Closing Date................................................ 2.6
Code........................................................ 4.9(b)
Common Stock................................................ Preamble
Company..................................................... Preamble
Company Affiliates.......................................... 6.8
Company Agreements.......................................... 4.4
Company Balance Sheet....................................... 4.5
Company Board............................................... Preamble
Company Disclosure Letter................................... Article IV
Company Employees........................................... 6.4(a), 6.4(d)
Company Intellectual Property............................... 4.14
Company LLC(s).............................................. 4.1(c)
Company Material Adverse Effect............................. 4.1(a)
Company Option.............................................. 3.2(a)
Company Partnership(s)...................................... 4.1(c)
Company Rights Agreement.................................... 6.11
Company SEC Documents....................................... 4.5
Company Stock Plans......................................... 4.2(a)
Company Subsidiaries........................................ 4.1(b)
Company Subsidiary.......................................... 4.1(b)
Confidentiality Agreement................................... 6.2
D&O Insurance............................................... 6.8(d)
Director Shareholders....................................... Preamble
Effective Time.............................................. 2.2
Employee Agreements......................................... 4.9(a)
Environmental Claims........................................ 4.16
Environmental Laws.......................................... 4.16
ERISA....................................................... 4.9(a)
ERISA Affiliate............................................. 4.9(a)
Exchange Act................................................ 1.2
Exchange Agent.............................................. 3.3(a)
Exchange Fund............................................... 3.3(a)
Fair Market Value........................................... 3.2(b)
GAAP........................................................ 4.1(a)
Governmental Entity......................................... 4.4
</TABLE>
1
<PAGE> 34
<TABLE>
<CAPTION>
DEFINED TERM SECTION
------------ -------
<S> <C>
HSR Act..................................................... 4.4
Indemnified Party........................................... 6.7(a)
Industry.................................................... 4.1(a)
MBCA........................................................ Preamble
Merger...................................................... 2.1
Merger Sub.................................................. Preamble
Merger Sub Common Stock..................................... 3.1(a)
Merger Sub Disclosure Letter................................ Article IV
Merger Sub Securities....................................... 5.6
Minimum Condition........................................... 1.1
NASDAQ...................................................... 3.2(b)
Offer....................................................... Preamble
Offer to Purchase........................................... 1.1
Per Share Amount............................................ Preamble
Potential Acquiror.......................................... 6.5(a)(i)
Preferred Stock............................................. 4.2(a)
Proxy Statement............................................. 4.8
Rights...................................................... 6.11
SAR......................................................... 3.2(b)
Schedule 14D-1.............................................. 1.1
SEC......................................................... 1.1
Securities Act.............................................. 4.4
Significant Subsidiary...................................... 4.1(a)
Special Meeting............................................. 4.8
Superior Proposal........................................... 6.5(c)
Surviving Corporation....................................... 2.1
Tax Return.................................................. 4.12(e)
Taxes....................................................... 4.12(e)
Tender and Option Agreements................................ Preamble
Third Party Acquisition Event............................... 8.2(d)
</TABLE>
2
<PAGE> 1
EXHIBIT (c)(2)
TENDER AND OPTION AGREEMENT
TENDER AND OPTION AGREEMENT, dated as of March 27, 1998 (the "Agreement"),
by and among Dorel Industries Inc., a Quebec corporation ("Acquiror"), Horizon
Acquisition, Inc., a Delaware corporation and a wholly-owned subsidiary of
Acquiror ("Merger Sub"), and [ ] (the "Shareholder").
WHEREAS, the Shareholder is the owner of [ ] shares (the
"Shares") of Common Stock, par value $1.00 per share (the "Common Stock"), of
Ameriwood Industries International Corporation (the "Company");
WHEREAS, the Acquiror, Merger Sub and the Company have entered into an
Agreement and Plan of Merger, dated as of the date hereof (as amended from time
to time, the "Merger Agreement"), which provides, among other things, that, upon
the terms and subject to the conditions therein, Merger Sub will make a cash
tender offer (the "Offer") for all of the outstanding shares of Common Stock and
after expiration of the Offer will merge with and into the Company (the
"Merger"); and
WHEREAS, as a condition to the willingness of Acquiror and Merger Sub to
enter into the Merger Agreement, Acquiror has requested that the Shareholder
agree, and in order to induce Acquiror and Merger Sub to enter into the Merger
Agreement, the Shareholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and subject to the terms and conditions set forth herein,
the parties hereto hereby agree as follows:
1. Representations and Warranties of the Shareholder. The Shareholder
represents and warrants to the Acquiror as follows:
a. The Shareholder is the sole record and beneficial owner (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of the Shares and, there exist no liens, claims, security
interests, options, proxies, voting agreements, charges, obligations,
understandings, arrangements or other encumbrances of any nature
whatsoever, except for restrictions applicable thereto under federal and
state securities laws ("Liens"), affecting the Shares.
b. The Shares and the certificates representing the Shares are now and
at all times during the term hereof will be held by the Shareholder, or by
a nominee or custodian for the benefit of the Shareholder free and clear of
all Liens, except for the Liens described in (a) above and Liens arising
hereunder. Upon transfer to Acquiror by the Shareholder of the Shares
hereunder, Acquiror will have good and marketable title to the Shares, free
and clear of all Liens.
c. This Agreement has been duly and validly executed and delivered by
the Shareholder and, assuming due authorization, execution and delivery by
Acquiror and Merger Sub, constitutes a valid and binding agreement of the
Shareholder, enforceable against the Shareholder in accordance with its
terms, except to the extent that enforceability may be limited by
applicable bankruptcy or other laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
d. The execution and delivery of this Agreement by the Shareholder
does not, and the performance by the Shareholder of its obligations
hereunder will not, constitute a violation of, conflict with, result in a
default (or an event which, with notice or lapse of time or both, would
result in a default) under, or result in the creation of any Lien on any
Shares under, (i) any contract, commitment, agreement, partnership
agreement, understanding, arrangement or restriction of any kind to which
the Shareholder is a party or
<PAGE> 2
by which the Shareholder is bound, (ii) any judgment, writ, decree, order
or ruling applicable to the Shareholder or (iii) any law applicable to the
Shareholder.
e. To the Shareholder's knowledge, neither the execution and delivery
of this Agreement nor the performance by the Shareholder of its obligations
hereunder will require any consent, authorization or approval of, filing
with 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 Antitrust Improvements Act of 1976, as amended, and
the rules and regulations promulgated thereunder (the "HSR Act"), state
antitrust laws or the federal securities laws.
2. Representations and Warranties of Acquiror and Merger Sub. Acquiror and
Merger Sub jointly and severally represent and warrant to the Shareholder as
follows:
a. Each of Acquiror and Merger Sub is duly organized and validly
existing and in good standing under the laws of its jurisdiction of
incorporation, has the requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. This Agreement has
been duly and validly executed and delivered by each of Acquiror and Merger
Sub and constitutes the legal, valid and binding obligation of each of
Acquiror and Merger Sub, enforceable against each of Acquiror and Merger
Sub in accordance with its terms, except to the extent that enforceability
may be limited by applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting the enforcement of creditors' rights
generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
b. The execution and delivery of this Agreement by each of Acquiror
and Merger Sub does not, and the performance by each of Acquiror and Merger
Sub of its obligations hereunder will not, constitute a violation of,
conflict with, or result in a default (or an event which, with notice or
lapse of time or both, would result in a default) under, its charter or
bylaws or any contract, commitment, agreement, understanding, arrangement
or restriction of any kind to which Acquiror or Merger Sub is a party or by
which Acquiror or Merger Sub is bound or any judgment, writ, decree, order
or ruling applicable to Acquiror or Merger Sub.
c. Neither the execution and delivery of this Agreement nor the
performance by each of Acquiror and Merger Sub of its obligations hereunder
will violate any order, writ, injunction, judgment, law, decree, statute,
rule or regulation applicable to Acquiror or Merger Sub or require any
consent, authorization or approval of, filing with, or notice to, any
court, administrative agency or other governmental body or authority, other
than any required notices or filings pursuant to the HSR Act, state
antitrust laws or the federal securities laws.
3. Tender of Shares.
a. Acquiror and Merger Sub jointly and severally agree:
i. subject to the conditions of the Offer set forth in Annex A to
the Merger Agreement and the other terms and conditions of the Merger
Agreement, that Merger Sub will purchase all shares of Common Stock
tendered pursuant to the Offer as promptly as practicable following
commencement of the Offer and that Merger Sub will consummate the Merger
in accordance with the terms of the Merger Agreement;
ii. not to decrease the price per share to be paid to the Company's
shareholders in the Offer below $9.625 per share (the "Tender Offer
Price"); and
iii. to deliver, or to cause to be delivered, the Offer Documents
to the Shareholder. The provisions of Sections 3(a)(i) and 3(a)(ii)
shall survive the termination of this Agreement.
b. The Shareholder will (i) tender the Shares into the Offer promptly,
and in any event no later than the fifth business day following the
commencement of the Offer, or, if the Shareholder has not received the
Offer Documents by such time, within two business days following receipt of
such documents, and
2
<PAGE> 3
(ii) not withdraw any Shares so tendered (except in the event the Stock
Option is exercised). Upon the purchase of all the Shares pursuant to the
Offer in accordance with this Section 3, this Agreement will terminate. The
Shareholder will receive the same price per Share received by other
shareholders of the Company in the Offer with respect to Shares tendered by
it in the Offer. In the event that, notwithstanding the provisions of the
first sentence of this Section 3(b), any Shares are for any reason
withdrawn from the Offer or are not purchased pursuant to the Offer, such
Shares will remain subject to the terms of this Agreement. The Shareholder
acknowledges that Merger Sub's obligation to accept for payment and pay for
the Shares in the Offer is subject to all the terms and conditions of the
Offer. On the date the Shares are accepted for payment and purchased by
Merger Sub pursuant to the Offer, Merger Sub or Acquiror, as the case may
be, shall make payment by wire transfer or other method (as agreed by
Merger Sub and the Shareholder) to the Shareholder of the purchase price
for such Shares to an account designated by the Shareholder.
c. The Shareholder hereby agrees to permit Acquiror to publish and
disclose in the Offer Documents and, if approval of the shareholders of the
Company is required under applicable law, the Proxy Statement, its identity
and ownership of Common Stock and the nature of its commitments,
arrangements and understandings under this Agreement.
4. Option to Purchase.
a. The Shareholder hereby grants to Acquiror, subject to the terms and
conditions hereof, an irrevocable option (the "Stock Option") to purchase
the Shares at a purchase price per share of $9.625 per Share (the "Exercise
Price") in cash, in the manner set forth in this Section 4. At any time
prior to the termination of the Stock Option hereunder, Acquiror (or a
wholly owned subsidiary of Acquiror) may exercise the Stock Option, in
whole only, if on or after the date hereof:
i. any corporation, partnership, individual, trust, unincorporated
association, or other entity or "person" (as defined in Section 13(d)(3)
of the Exchange Act) other than Acquiror or any of its "affiliates" (as
defined in the Exchange Act) (a "Third Party"), will have:
A. commenced or announced an intention to commence a bona fide
tender offer or exchange offer for any shares of Common Stock, the
consummation of which would result in "beneficial ownership" (as
defined in the Exchange Act) by such Third Party (together with all
such Third Party's affiliates and "associates" (as defined in the
Exchange Act)) of 35% or more of the then outstanding voting equity
of the Company (either on a primary or a fully diluted basis);
B. acquired beneficial ownership of shares of Common Stock that,
when aggregated with any shares of Common Stock already owned by such
Third Party, its affiliates and associates, would result in the
aggregate beneficial ownership by such Third Party, its affiliates
and associates of 15% or more of the then outstanding voting equity
of the Company (either on a primary or a fully diluted basis);
provided, however, that "Third Party" for purposes of this clause (B)
does not include any corporation, partnership, person, other entity
or group that beneficially owns more than 15% of the outstanding
voting equity of the Company (either on a primary or a fully diluted
basis) as of the date hereof and that does not, after the date
hereof, increase such ownership percentage by more than an additional
1% of the outstanding voting equity of the Company (either on a
primary or a fully diluted basis);
C. acquired assets constituting 15% or more of the total assets
or earning power of the Company taken as a whole;
D. entered into an agreement with the Company that contemplates
the acquisition of (x) assets constituting 15% or more of the total
assets or earning power of the Company taken as a whole or (y)
beneficial ownership of 15% or more of the outstanding voting equity
of the Company; or
ii. any of the events described in Section 8.1(c)(i) of the Merger
Agreement that would allow the Company to terminate the Merger Agreement
has occurred (after the passage of any time
3
<PAGE> 4
periods set forth in such sections but without the necessity of the
Company having terminated the Merger Agreement).
In the event that Acquiror wishes to exercise the Stock Option,
Acquiror shall give written notice (the "Option Notice", with the date
of the Option Notice being hereinafter called the "Notice Date") to the
Shareholder specifying the place and date (not earlier than three nor
later than ten Business Days from the Notice Date) for closing such
purchase (a "Closing"). Acquiror's obligation to purchase the Shares
upon any exercise of the Stock Option and the Shareholder's obligation
to sell the Shares upon any exercise of the Stock Option are subject (at
the election of Acquiror and the Shareholder, respectively,) to the
conditions that (i) no preliminary or permanent injunction or other
order prohibiting the purchase, issuance or delivery of the Shares
issued by any Governmental Authority will be in effect and (ii) any
applicable waiting period required for the purchase of Shares under the
HSR Act will have expired or been terminated or clearance from the
appropriate agencies shares have been obtained, provided that if such
injunction or other order has become final and nonappealable, the Stock
Option shall terminate; and provided further, that if the Stock Option
is not exercisable because either of the circumstances described in the
immediately foregoing clause (i) or (ii) exist, then the Stock Option
shall be exercisable for the ten business day period commencing on the
date that the circumstances set forth in clause (i) or (ii), as
applicable, cease to exist, but in no event shall the Stock Option be
exercisable after the date set forth in Section 9(c). Acquiror's
obligation to purchase the Shares upon exercise of the Stock Option is
further subject (at Acquiror's election) to the condition that there
will have been no material breach of the representations, warranties,
covenants or agreements of the Shareholder contained in this Agreement
or of the Company contained in the Merger Agreement which breach has not
been cured within ten business days of the receipt of written notice
thereof from the Acquiror. The Shareholder's obligation to sell the
Shares upon exercise of the Stock Option and the Shareholder's
obligations under Section 7 are subject (at the Shareholder's election)
to the further conditions that there will have been no material breach
of the representations, warranties, covenants or agreements of Acquiror
or Merger Sub contained in this Agreement or contained in the Merger
Agreement, which breach has not been cured within ten business days of
the receipt of written notice thereof from the Shareholder.
b. At the Closing, (i) the Shareholder shall deliver to Acquiror the
certificate or certificates representing the Shares in proper form for
transfer upon exercise of the Stock Option in the denominations designated
by Acquiror in the Option Notice and (ii) Acquiror shall pay the aggregate
purchase price for the Shares by wire transfer of immediately available
funds to an account designated by the Shareholder in writing to Acquiror in
the amount equal to the product of the Exercise Price and the number of the
Shares.
c. In the event that Acquiror or Merger Sub pays a price higher than
$9.625 per share for Shares tendered into the Offer, the Exercise Price
shall be increased to equal such higher price.
d. In the event that Acquiror or Merger Sub exercise the Stock Option
and subsequent to such exercise either (i) Acquiror or Merger Sub pays
consideration in excess of the Exercise Price for the Common Stock pursuant
to the Merger (a "Higher Price"), or (ii) (A) a Third Party commences a
bona-fide tender offer or exchange offer for Common Stock for consideration
in excess of the Exercise Price (the "Excess Consideration"), (B) the
Company terminates the Merger Agreement in accordance with the provisions
of Section 8.1(c)(i) thereof, (C) prior to such termination, but after
receiving notice of the Company's intention to so terminate, Acquiror or
Merger Sub exercises the Stock Option and (D) Acquiror or Merger Sub
tenders the Shares it received upon the exercise of the Stock Option in
such tender offer or exchange offer and receives Excess Consideration with
respect to such Shares, then, in the case of (i) above, Acquiror or Merger
Sub shall pay to the Shareholder in cash, within five days after Acquiror
or Merger Sub pays the Higher Price to holders of Common Stock, an amount
equal to the number of Shares multiplied by the difference between the
Higher Price and the Exercise Price, and in the case of (ii) above,
Acquiror or Merger Sub shall pay to the Shareholder in cash, within five
days after Acquiror or Merger Sub receives the Excess Consideration to
holders of Common Stock, an amount
4
<PAGE> 5
equal to the number of Shares multiplied by the difference between the
Excess Consideration and the Exercise Price.
e. The Shareholder has granted the Stock Option to Acquiror in order
to induce Acquiror to enter into and consummate the transactions
contemplated by the Merger Agreement. Acquiror and Merger Sub covenant and
agree that they will perform their respective obligations under the Merger
Agreement. The provisions of this Section 4(e) are intended both for the
benefit of the Shareholder and for the benefit of the Company and may not
be modified, waived or amended without the consent of the Company.
5. Transfer of the Shares.
a. During the term of this Agreement, the Shareholder will not (i)
offer to sell, sell, pledge or otherwise dispose of or transfer any
interest in or encumber with any Lien any of the Shares, (ii) enter into
any contract, option or other agreement or understanding with respect to
any transfer of any or all of the Shares or any interest therein; (iii)
grant any proxy, power-of-attorney or other authorization or consent in or
with respect to the Shares; (iv) deposit the Shares into a voting trust or
enter into a voting agreement or arrangement with respect to the Shares; or
(v) take any other action with respect to the Shares that would in any way
restrict, limit or interfere with the performance of its obligations
hereunder.
b. The Shareholder agrees to place the following legend on any and all
certificates evidencing the Shares:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO CERTAIN RESTRICTIONS ON TRANSFER PURSUANT TO THAT CERTAIN TENDER AND
OPTION AGREEMENT, DATED AS OF MARCH 27, 1998, BY AND BETWEEN DOREL
INDUSTRIES INC., HORIZON ACQUISITION, INC. AND [ ]. ANY
TRANSFER OF SUCH SHARES OF COMMON STOCK IN VIOLATION OF THE TERMS OF
SUCH AGREEMENT SHALL BE NULL AND VOID AND OF NO EFFECT WHATSOEVER.
6. Certain Other Agreements. The Shareholder shall notify Acquiror
immediately if any proposals are received by, any information is requested from,
or any negotiations or discussions are sought to be initiated or continued with
the Shareholder or his attorneys, accountants or other agents (each of such
actions, an "Interest"), in each case in connection with any Acquisition
Proposal indicating, in connection with such notice, the name of the person
indicating such Interest and the terms and conditions of any related proposals
or offers. The Shareholder agrees to cease immediately and cause to be
terminated immediately any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to any Acquisition Proposal. In
addition, the Shareholder agrees to keep Acquiror informed, on a current basis,
of the status and terms of any Acquisition Proposal. The Shareholder furthermore
agrees not to, and will use his best efforts to ensure that his attorneys,
accountants and other agents do not, directly or indirectly: (i) initiate,
solicit or encourage, or take any action to facilitate the making of, any offer
or proposal that constitutes or is reasonably likely to lead to any Acquisition
Proposal, (ii) enter into any agreement with respect to any Acquisition Proposal
or (iii) in the event of an unsolicited written proposal in respect of an
Acquisition Proposal, engage in negotiations or discussions with, or provide any
information or data to, any person (other than Acquiror, any of its affiliates
or representatives and except for information that has been previously publicly
disseminated by the Company) relating to any Acquisition Proposal. The
obligations provided for in this Section 6 shall become effective immediately
following the execution and delivery of this Agreement by the parties hereto.
7. Voting of Shares; Grant of Irrevocable Proxy; Appointment of Proxy.
a. The Shareholder hereby agrees that, during the term of this
Agreement, at any meeting (whether annual or special and whether or not an
adjourned or postponed meeting) of the holders of Common Stock, however
called, or in connection with any written consent of the holders of Common
Stock, the Shareholder will appear at the meeting or otherwise cause the
Shares to be counted as present thereat for purposes of establishing a
quorum and vote or consent (or cause to be voted or consented) the Shares
(i) in favor of the Merger and (ii) against any action or agreement that
would impede, interfere with or
5
<PAGE> 6
prevent the Merger, including any other extraordinary corporate
transaction, such as a merger, reorganization or liquidation involving the
Company and a third party or any other proposal of a third party to acquire
the Company and (iii) if requested by Acquiror, in favor of a shareholder
resolution proposed by Acquiror in accordance with applicable provisions of
the Michigan Business Corporation Act (the "MBCA") the purpose of which is
to cause the Offer and the Merger to be consummated and which does not
relate to the election of directors.
b. The Shareholder hereby irrevocably grants to, and appoints,
Acquiror and any nominee thereof, its proxy and attorney-in-fact (with full
power of substitution) during the term of this Agreement, for and in the
name, place and stead of the Shareholder, to vote the Shares, or grant a
consent or approval in respect of the Shares, in connection with any
meeting of the shareholders of the Company (i) in favor of the Merger and
(ii) against any action or agreement that would impede, interfere with or
prevent the Merger, including any other extraordinary corporate
transaction, such as a merger, reorganization or liquidation involving the
Company and a third party or any other proposal of a third party to acquire
the Company.
c. The Shareholder represents that all proxies heretofore given in
respect of the Shares, if any, are not irrevocable, and hereby revokes all
such proxies given with respect to the Shares.
d. The Shareholder hereby affirms that the irrevocable proxy set forth
in this Section 7 is given in connection with the execution of the Merger
Agreement and that such irrevocable proxy is given to secure the
performance of the duties of the Shareholder under this Agreement. The
Shareholder hereby further affirms that the irrevocable proxy set forth in
this Section 7 is coupled with an interest and is intended to be
irrevocable in accordance with the provisions of Section 212 of the
Delaware General Corporation Law and Section 422 of the MBCA.
8. Adjustments. The number and types of securities subject to this
Agreement will be appropriately adjusted in the event of any stock dividends,
stock splits, recapitalization, combinations, exchanges of shares or the like or
any other action that would have the effect of changing the Shareholder's
ownership of the Company's capital stock.
9. Termination. Except as otherwise specifically provided herein, all
obligations under this Agreement will terminate on the earliest of (a) the date
the Merger Agreement is terminated in accordance with its terms or the date the
Offer is terminated by Acquiror or Merger Sub as a result of any failure of a
condition of the Offer; provided, however, that the provisions of Sections 4(a)
shall not terminate until sixty (60) days thereafter (or such later time as
permitted by Section 4(a)) if the Merger Agreement was terminated pursuant to
Section 8.1(c)(i) thereof, (b) the purchase of all the Shares pursuant to the
Offer in accordance with Section 3 or pursuant to the Stock Option, or (c) on
September 30, 1998. The provisions of Section 13 shall survive any termination
of this Agreement.
10. Effectiveness. This Agreement shall not be effective unless and until
the Merger Agreement shall have been approved by the Company's Board of
Directors.
11. Brokerage. Acquiror, Merger Sub and the Shareholder represent and
warrant to the other that the negotiations relevant to this Agreement have been
carried on by Acquiror and Merger Sub, on the one hand, and the Shareholder, on
the other hand, directly with the other, and that there are no claims for
finder's fees or brokerage commissions or other like payments in connection with
this Agreement or the transactions contemplated hereby. Acquiror and Merger Sub,
on the one hand, and Shareholder, on the other hand, will indemnify and hold
harmless the other from and against any and all claims or liabilities for
finder's fees or brokerage commissions or other like payments incurred by reason
of action taken by him, it or any of them, as the case may be.
12. Miscellaneous.
a. Except for the representations and warranties set forth in Section
1(a) and l(b), all representations and warranties contained herein will
terminate upon the termination of this Agreement.
6
<PAGE> 7
b. Any provisions 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 is 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 provisions 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
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.
c. This Agreement contains the entire agreement among the parties in
respect to the subject matter hereof, and supersedes all prior agreements
among the parties with respect to such matters. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified, except upon
the delivery of a written agreement executed by the parties hereto.
d. This Agreement will be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts made and
performed in that state. Each of the parties hereto acknowledges and agrees
that in the event of any breach of this Agreement, each non-breaching party
would be irreparably and immediately harmed and could not be made whole by
monetary damages. It is accordingly agreed that the parties hereto (i) will
waive, in any action for specific performance, the defense of adequacy of a
remedy at law and (ii) will be entitled, in addition to any other remedy to
which they may be entitled at law or in equity, to compel specific
performance of this Agreement in any action instituted in any state or
federal court sitting in Wilmington, Delaware. Capitalized terms used and
not otherwise defined herein shall have the meanings set forth in the
Merger Agreement.
e. The descriptive headings contained herein are for convenience and
reference only and will not affect in any way the meaning or interpretation
of this Agreement.
f. All communications or notices required or permitted by this
Agreement shall be in writing and shall be deemed to have been given at the
earlier of the date personally delivered or sent by telephonic facsimile
transmission (with a copy via regular mail) or one day after sending via
nationally recognized overnight courier or five days after deposit in the
United States mail, certified or registered mail, postage prepaid, return
receipt requested, and addressed as follows, unless and until any of such
parties notifies the others in accordance with this Section of a change of
address:
If to Shareholder to:
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
with a copy to:
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker
Suite 2100
Chicago, IL 60606
Telephone: (312) 407-0700
Telecopy: (312) 407-0411
Attention: William R. Kunkel, Esq.
If to Acquiror or Merger Sub to:
[ ]
[ ]
[ ]
7
<PAGE> 8
with a copy to:
[ ]
[ ]
[ ]
or to such other address as any party may have furnished to the other parties in
writing in accordance herewith.
g. This Agreement may be executed in any number of counterparts, each
of which will be deemed to be an original, but all of which together will
constitute one agreement.
h. This Agreement is binding upon and is solely for the benefit of the
parties hereto and their respective successors, legal representatives and
assigns. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement may be assigned by any of the parties
hereto without the prior written consent of the other parties.
i. If any term or other provision of this Agreement is determined to
be invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other terms and provisions of this Agreement will
nevertheless remain in full force and effect as long as the economic or
legal substance of the transactions contemplated hereby is not affected in
any manner adverse to any party hereto. Upon any such determination that
any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto will negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions
contemplated by this Agreement are consummated to the extent possible.
j. 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.
13. Expenses. Except as provided in Section 4 hereof, all fees and expenses
incurred by any one party hereto shall be borne by the party incurring such fees
and expenses.
14. Further Assurances; Shareholder Capacity.
a. The Shareholder shall, upon request of Acquiror or Merger Sub,
execute and deliver any additional documents and take such further actions
as may reasonably be deemed by Acquiror or Merger Sub to be necessary or
desirable to carry out the provisions hereof and to vest the power to vote
the Shares as contemplated by Section 7 hereof in Acquiror.
b. Nothing in this Agreement shall be construed to prohibit any
affiliate of the Shareholder who is a member of the Board of Directors of
the Company from taking any action solely in his capacity as a member of
the Board of Directors of the Company to the extent specifically permitted
by the Merger Agreement or as required by applicable law.
8
<PAGE> 9
IN WITNESS WHEREOF, the Acquiror, Merger Sub and the Shareholder have
caused this Agreement to be signed by their respective officers or
representatives thereunto duly authorized, all as of the date first written
above.
DOREL INDUSTRIES INC.
By:
--------------------------------------
Name:
Title:
HORIZON ACQUISITION, INC.
By:
--------------------------------------
Name:
Title:
--------------------------------------
[ ], as Shareholder
9
<PAGE> 1
EXHIBIT (c)(3)
ABN AMRO LETTERHEAD
November 25, 1997
PRIVATE AND STRICTLY CONFIDENTIAL
Mr. Martin Schwartz
President and Chief Executive Officer
Dorel Industries
4750 des Grandes Prairies
Montreal, Quebec H1R 1A3
Dear Mr. Schwartz:
In connection with your consideration of a possible transaction involving
shares of Ameriwood Industries International corporation (the "Company") in one
or a series of transactions (each, a "Transaction"), the Company and/or its
affiliates, agents, advisors or other representatives (each, a "Company
Representative") is prepared to furnish you with certain confidential and
proprietary information concerning the Company's assets and business provided
that you enter into this Agreement. As a condition to the Company furnishing to
you and your Representatives (as defined herein) the Evaluation Material (as
defined herein) that has not heretofore been made available to the public, you
agree that for a period of two (2) years from the receipt of any Evaluation
material hereunder, you will (i) treat the Evaluation Material furnished to you
by the Company, or the Company's Representatives, at any time in connection with
such transaction, in accordance with the provisions of this Agreement, and (ii)
take or abstain from taking certain other actions herein set forth. In
consideration of the opportunity to review any such information provided by or
on behalf of the Company, you agree as follows:
1. You hereby agree to treat confidentially any information furnished to
you by the Company or a Company Representative (collectively, the "Evaluation
Material"). As used herein, the term "Evaluation Material" refers to any and all
data, reports, analyses, compilations, studies, projections, forecasts, records
and all other financial, technical, commercial or other information concerning
the business and affairs of the Company (whether prepared by the Company, its
advisors or otherwise) that may be provided to you, irrespective of the form of
the communications, by or on behalf of the Company. The term "Evaluation
Material" also includes all analyses, compilations, studies or other material
prepared by you or your partners, directors, employees, agents, advisors,
representatives of your advisors and any commercial or investment banks
participating in the financing of any transaction (collectively, your
"Representatives") containing or based on in whole or in part, any information
furnished by the Company or any of its representatives. The term "Evaluation
Material" does not include information which (i) is already in your or your
Representative's possession, provided that such information is not known by you
or your Representatives to be the subject of another confidentiality agreement
with, or other obligation of secrecy to, the Company, (ii) becomes generally
available to the public other than as a result of a disclosure by you or your
Representatives in violation of this Agreement, or (iii) becomes available to
you or your Representatives from a source other than the Company or its
Representatives, provided that such sources is not known by you or the party
receiving such information to be bound by a confidentiality agreement with, or
other obligation of secrecy to, the Company which would prohibit such source
from making such information available to the party receiving the same.
2. You agree to use the Evaluation Material only for the purpose of
evaluating a Transaction and you will not use the Evaluation Material in any
other way (including buy not limited to direct or indirect disclosure to any
third parties); provided, however, that you may disclose any Evaluation Material
to your Representatives
<PAGE> 2
who need to know such information for the sole purpose of evaluating a
Transaction (provided that they shall be informed by you of the confidential
nature of such information and the prior to any such disclosure such
Representative shall agree to be bound by this Agreement). You agree to be
responsible for any breach of this Agreement by any of your Representatives. You
also agree that all communications by you and your Representatives shall be
through representatives of ABN AMRO Chicago Corporation ("AACC"). Under no
circumstances shall the Company be contacted directly.
3. If you are advised by your counsel that facts (a) disclosed in the
Evaluation Material or (b) not permitted to be disclosed pursuant to provisions
provided within this Agreement, must be disclosed in accordance with applicable
law or legal process, including disclosures necessary for you to comply with the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") and the rules
and regulations thereunder, including any disclosures required to be made in
accordance with Schedule 13(d) of the Exchange Act, such disclosures shall
contain only those disclosures which you are legally compelled to disclose and
shall be made at the latest time practicable consistent, in the opinion of your
counsel, with your obligations under the Exchange Act; and provided that any
disclosure required to be made by law or legal process shall first be disclosed
to the Company in the form proposed to be otherwise disclosed at least one
business day prior to making such disclosure and you shall cooperate with the
Company in order that the necessary disclosures may be made in a manner
minimizing any risk to the Company and its business.
4. If at any time when the Evaluation Material is in your possession or in
the possession of your Representatives such information is subpoenaed or demand
for production is made by any other form of legal process by any court,
administrative or legislative body, or any other person or entity purporting to
have authority to subpoena or demand the Evaluation Material, the person to whom
the subpoena or demand (including the delivery of a copy thereof) to the Company
(to the attention of its President and Chief Executive Officer) within a
reasonable time prior to the time when production of the Evaluation Material is
requested by subpoena or demand. In any event, the party to whom the subpoena or
demand is directed shall request the person or entity propounding the subpoena
or demand to give the Company a reasonable amount of time to object to such
production. In the event that a protective order or other remedy is not
obtained, or that the Company waives compliance with the provisions hereof, you
agree to furnish only the portion of the Evaluation Material which you are
advised by written opinion of your counsel is legally required and to use every
reasonable effort to obtain assurance that confidential treatment will be
accorded such Evaluation Material.
5. For a period of three years from the date hereof you and your affiliates
(as defined in Rule 12(b)(2) under the "Exchange Act") will not (and you and
they will not assist or encourages other to), directly or indirectly, unless
specifically authorized in writing in advance by the Company:
(i) acquire or agree, offer, seek or propose to acquire ownership
(including, but not limited to, beneficial ownership as defined in Rule
13d-3 under the Exchange Act) of any of the Company's assets or businesses
or any securities issued by the Company, or any rights or options to
acquire such ownership (including from a third party), including, but not
limited to, purchasing any such assets, businesses or securities in the
public marketplace or privately;
(ii) participate in any solicitation of proxies or become a
participant in any election contest with respect to the Company;
(iii) 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;
(iv) otherwise act, alone or in concert with others, to seek or offer
to control or influence, in any manner, the management, Board of Directors
or policies of the Company; or
(v) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the foregoing.
For a period of three years after the date hereof, unless such shall have been
specifically invited in writing by the Company, you will not, and will cause
each of your affiliates not to, directly or indirectly, seek or offer to
2
<PAGE> 3
negotiate with or make any statement or proposal to the Company, its
Representatives or any stockholder of the Company, or otherwise make any public
announcement with respect to (i) any form of business combination or transaction
involving the Company, (ii) any form of restructuring, recapitalization or
similar transaction with respect to the Company, (iii) any request to amend,
waive or terminate the provisions of this Agreement or (iv) any proposal or
other statement inconsistent with the terms of this letter Agreement.
Notwithstanding the last sentence of the previous paragraph, if (a) the Board of
Directors of the Company approves a transaction with any person (other than the
Company or any employee benefit plans of the Company), and (b) such transaction
would result in such person beneficially owning more than 50% of the outstanding
equity securities or all or substantially all of the assets of the Company, then
you shall be permitted to seek or offer to negotiate with or make a statement or
proposal to the Company or its Representatives to acquire more than 50% of the
outstanding equity securities of the Company or all or substantially all of the
assets of the Company, provided that the offer is at a price and on terms that
are financially superior to the price and terms of the transaction proposed by
such person.
6. You shall not make any public disclosure concerning the subject matter
of this Agreement or of your consideration of a Transaction, including that
Evaluation Material has been made available to you or that you are having or
have had discussions with the Company or any stockholder thereof or that the
Company or any stockholder thereof may consider a possible Transaction;
provided, however, that you may make such disclosure if you have received the
written opinion of your outside counsel addressed to you and to the Company that
such disclosure must be made by you in order that you not commit a violation of
applicable law, and you advise the Company of your obligation to make such
disclosure, and provide the Company with a copy of the opinion of counsel, the
proposed disclosure and an opportunity to discuss such disclosure with you and
your counsel as early as practicable prior to any such disclosure.
7. You acknowledge and agree that (a) the Company and its Representatives
are free to conduct the process leading up to a possible business arrangement as
the Company and its Representatives, in their sole discretion, determine
(including, without limitation, by negotiating with any prospective buyer and
entering into a preliminary or definitive agreement without prior notice to you
or any other person), (b) the Company reserves the right, in its sole
discretion, to change the procedures relating to its consideration of a business
arrangement at any time without prior notice to you or any other person, to
reject any and all proposals made by you and any of your Representatives with
regard to any business arrangement, and to terminate discussions and
negotiations with you at any time and for any reason and (c) unless and until a
written definitive agreement concerning a business arrangement has been
executed, neither the Company nor any of its Representatives will have any
liability to you with respect to any business arrangement, whether by virtue of
this Agreement, any other written or oral expression with respective to any
business arrangement or otherwise.
8. If you determine that you do not wish to proceed with a Transaction, you
will promptly advise the Company of that decision. The Company may elect at any
time in its sole discretion to terminate further access by you to Evaluation
Material, and you agree that, upon any such termination or upon our request or
upon your decision not to proceed with a Transaction, you will promptly (and in
any case within 14 days of the Company's request) return to us all copies of the
Evaluation Material and will destroy or cause to be destroyed all copies,
reproductions, summaries, analyses, and extracts thereof and all memoranda,
notes and other writings prepared by you or your Representatives based on the
Evaluation Material. No such transaction will affect your obligations hereunder
or those of your Representatives, all of which obligations shall continue in
effect. You agree not to make copies of the Evaluation Material except as
necessary to assist you in your consideration of a Transaction.
9. From and after the date of this Agreement and continuing for a period of
eighteen months thereafter, you and your Representatives agree that you shall
not, directly or indirectly, solicit to employ (whether as an employee, officer,
director, agent, consultant or independent contractor) any person who is now
employed by the Company. The term "solicit for employment" includes any
communication (written, telephone or oral) from or initiated by you or your
Representatives, or any search or other recruitment entity or person employed by
you, to any employee of the other party (except any such communication directly
in response to a written, telephonic or other contact initiated by such
employee) but does not include advertising to fill one or more
3
<PAGE> 4
positions in any newspaper of general circulation or industry publication on a
basis consistent with past practice.
10. Anything in this Agreement to the contrary notwithstanding, and without
prejudice to the generality of any provision of this Agreement, you agree that
you will not use the Evaluation Material to obtain any commercial or financial
benefit or for any purpose detrimental to the Company and its stockholders,
unless specifically authorized in writing in advance by the Company.
11. You agree that the Company may suffer immediate and irreparable harm in
the event of any breach by you or your Representatives of any of your or their
obligations under this Agreement, and accordingly, that money damages would not
be a sufficient remedy for any breach of this Agreement by you or your
Representatives, and that in addition to all other remedies available to the
Company, the Company shall be entitled to specific performance and injunctive or
other equitable relief as a remedy for any such breach, and you further agree to
waive any requirement for the securing or posting of any bond in connection with
such remedy. The prevailing party shall be entitled to recover its costs and
expenses, including reasonable attorneys' fees.
12. You hereby acknowledge that you are aware, and that you will advise
each of your Representatives who are aware of the matters which are the subject
of this Agreement, that the United States securities laws prohibit any person
who has received from an issuer material, non-public information concerning the
matters which are the subject of this letter from purchasing or selling
securities of such issuer or from communicating such information to any other
person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell such securities.
13. The Company and AACC make no representation or warranty as to the
accuracy or completeness of the Evaluation Material. Neither the Company nor any
of its Representatives shall be subject to any liability resulting from the use
of the Evaluation Material by you or your Representatives. Only those
representations and warranties that are made in a definitive agreement relating
to a Transaction, when, as, and if it is executed, and subject to such
qualifications, limitations and restrictions as may be specified in such
agreement, will have legal effect. You also acknowledge that to the extent the
Evaluation material consists of financial projections, such projections may be
based upon a number of assumptions and no assurance is given that such
assumptions are correct or that such projections will be realized. Finally, the
Company is under no duty or obligation to provide you or your Representatives
with access to any information, and nothing herein is intended to impose any
such obligation upon the Company or the Company Representatives.
14. You hereby represent that, as of the date hereof, you and your
affiliates and associates and any other person or entity with whom you are
acting in connection with in this matter or with whom you have formed a "group"
within the meaning of Section 13(d)(3) of the Exchange Act do not beneficially
own any shares of Common Stock of the Company.
15. This Agreement may be executed in one or more counterparts, each of
which shall, for all purposes, be deemed an original and all such counterparts,
taken together, shall constitute one and the same agreement, even though all of
the parties may not have executed the same counterpart of this Agreement.
16. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Michigan, without giving effect to its
conflict laws, principles or rules. This Agreement shall be binding on you and
your Representatives for a period of three years from the date hereof.
17. The use of the words "you" and "your" herein shall be deemed to include
both the individual and the entity to whom this Agreement is addressed.
18. This Agreement shall not supersede but shall be a supplement to the
letter agreement previously executed by you and ABN AMRO Chicago Corporation, on
the Company's behalf, on November 12, 1997 with respect to preliminary
discussions regarding a Transaction.
4
<PAGE> 5
If you are in agreement with the foregoing, please so indicate by signing and
returning one copy of this Agreement, which will constitute your binding
agreement with the Company with respect to the matters set forth herein.
Sincerely,
ABN AMRO CHICAGO CORPORATION
on behalf of AMERIWOOD INDUSTRIES
INTERNATIONAL CORPORATION
By: /s/M.S.A. BECK
AGREED:
DOREL INDUSTRIES
By: /s/MARTIN SCHWARTZ
dated: November 25, 1997
5
