<PAGE>
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UNITED STATES
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
WYMAN-GORDON COMPANY
(Name of Subject Company)
WGC ACQUISITION CORP.
PRECISION CASTPARTS CORP.
(Bidders)
COMMON STOCK, $1.00 PAR VALUE
(Title of Class of Securities)
983085 10 1
(CUSIP Number of Common Stock)
------------------------
WILLIAM D. LARSSON
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
PRECISION CASTPARTS CORP.
4650 SW MACADAM AVENUE, SUITE 440
PORTLAND, OREGON 97201
(503) 417-4800
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
COPY TO:
RUTH A. BEYER
STOEL RIVES LLP
900 SW FIFTH AVENUE, SUITE 2600
PORTLAND, OREGON 97204-1268
(503) 294-9332
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE*
<S> <C>
$764,459,800 $152,892
</TABLE>
* The transaction valuation assumes the purchase of 38,222,990 shares of
Common Stock of Wyman-Gordon Company at $20.00 per share in cash, which is
based on the number of shares of Common Stock represented by the Company to
be outstanding (35,538,733) as of May 17, 1999, the number of shares of
Common Stock issuable under outstanding stock options (2,599,653) and the
number of shares of Common Stock issuable pursuant to the Company's stock
purchase plan (84,604) as of May 17, 1999. The amount of the filing fee,
calculated in accordance with Rule 0-11(d) under the Securities Exchange Act
of 1934, equals 1/50 of one percent of the cash offered by the Bidder.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
<TABLE>
<S> <C>
Amount Previously Paid:......................
Form or Registration No.:....................
Filing Party:................................
Date Filed:..................................
</TABLE>
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<PAGE>
14D-1
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1. Name of reporting person
WGC Acquisition Corp. (EIN Applied For)
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2. Check the appropriate box if a member of a group
(a) / /
(b) / /
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3. SEC Use Only
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4. Source of Funds
AF
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5. Check box if disclosure of legal proceedings is required pursuant to Items
2(e) or 2(f)
/ /
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6. Citizenship or place of organization
Massachusetts
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7. Aggregate amount beneficially owned by each reporting person
None (0)
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8. Check box if the aggregate amount in row (7) excludes certain shares.
/ /
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9. Percent of class represented by amount in row (7)
None (0)
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10. Type of reporting person
CO
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2
<PAGE>
14D-1
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1. Name of reporting person
Precision Castparts Corp. (EIN 93-0460598)
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2. Check the appropriate box if a member of a group
(a) / /
(b) / /
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3. SEC Use Only
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4. Source of Funds
BK
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5. Check box if disclosure of legal proceedings is required pursuant to Items
2(e) or 2(f)
/ /
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6. Citizenship or place of organization
Oregon
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7. Aggregate amount beneficially owned by each reporting person
100 shares
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8. Check box if the aggregate amount in row (7) excludes certain shares.
/ /
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9. Percent of class represented by amount in row (7)
Less than one-tenth of 1%
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10. Type of reporting person
CO
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3
<PAGE>
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Wyman-Gordon Company, a Massachusetts
corporation, (the "Company") and the address of its principal executive offices
is 244 Worcester Street, P.O. Box 8001, North Grafton, Massachusetts 01536-8001.
(b) The class of securities to which this statement relates is the Common
Stock, $1.00 par value per share (the "Shares"), of the Company. The information
set forth in the Introductory Section and Section 1 of the Offer to Purchase
(the "Offer to Purchase") annexed hereto as Exhibit (a)(1) is incorporated
herein by reference.
(c) The information concerning the principal market in which the Shares are
traded and the high and low sales prices for the Shares in such principal market
is set forth in Section 6 ("Price Range of Shares; Cash Distributions") of the
Offer to Purchase which is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) The name, principal business and address of the principal
office of WGC Acquisition Corp., a Massachusetts corporation (the "Purchaser"),
and Precision Castparts Corp., an Oregon corporation ("PCC"), is set forth in
Section 8 ("Certain Information Concerning the Purchaser and PCC") of the Offer
to Purchase which is incorporated herein by reference. The name, citizenship,
business address, present principal occupation or employment of each director
and executive officer of Purchaser and PCC and the name, principal business and
address of any corporation or other organization in which such occupation or
employment is conducted, material occupations, positions, offices or employments
during the last five years and the name, principal business and address of any
business corporation or other organization in which such occupation, position,
office or employment was carried on, is set forth in Schedule I of the Offer to
Purchase and is incorporated herein by reference.
(e) and (f) During the last five years none of the Purchaser or PCC or, to
the best knowledge of the Purchaser and PCC, any of the persons listed in
Schedule I to the Offer to Purchase has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors). During the last five
years, none of the Purchaser or PCC or, to the best knowledge of the Purchaser
and PCC, any of the persons listed in Schedule I to the Offer to Purchase was 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, 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) To the best of Purchaser's and PCC's knowledge, there have been no
transactions with the Company required to be set forth in this Item.
(b) The information set forth in Section 10 ("Background of the Offer;
Contacts with the Company") of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 9 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not Applicable.
4
<PAGE>
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction and Section 11 ("The
Purpose of the Offer; Merger Agreement; Plans for the Company") of the Offer to
Purchase is incorporated herein by reference.
(f) and (g) The information set forth in Section 12 ("Effect of the Offer
on the Market for the Shares, NYSE 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) PCC is the beneficial owner of 100 shares of common stock of the
Company, which is less than one-tenth of 1% of the Company's outstanding common
stock.
(b) None.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 10 ("Background of
the Offer; Contacts with the Company"), Section 11 ("The Purpose of the Offer;
Merger Agreement; Plans for the Company"), Section 14 ("Certain Legal Matters")
and Section 15 ("Fees and Expenses") of the Offer to Purchase is incorporated
herein by reference. Except as set forth in the Introduction and Sections 10,
11, 14 and 15 of the Offer to Purchase, neither the Purchaser or PCC or, to the
best knowledge of the Purchaser and PCC, any of the persons listed in Schedule I
to the Offer to Purchase, has any contract, arrangement, understanding or
relationship (whether or not legally enforceable) with any other person with
respect to any securities of the Company (including, but not limited to, any
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any such securities, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss, or the giving or
withholding of proxies).
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 15 ("Fees and Expenses") of the Offer
to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The Purchaser was created to effect the Offer and the Merger, and has no
business, assets or financial statements. The consolidated financial statements
of PCC are set forth in PCC's Annual Report on Form 10-K for the fiscal year
ended March 29, 1998 and PCC's Quarterly Reports on Form 10-Q for the quarters
ended June 28, 1998, September 27, 1998 and December 27, 1998, which reports
have been filed by PCC with the Securities and Exchange Commission ("SEC") and
are incorporated herein by reference. Such reports and other information can be
inspected and copied at the public reference facilities maintained by the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the following regional
offices of the SEC: New York Regional Office, 7 World Trade Center, New York,
New York 10048; and Chicago Regional Office, 1400 Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material can be obtained
from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. In addition, the aforementioned
material can also be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005. Such material may also be
accessed through an Internet Web site maintained by the SEC at
http://www.sec.gov.
5
<PAGE>
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 11 ("The Purpose of the Offer;
Merger Agreement; Plans for the Company") of the Offer to Purchase is
incorporated herein by reference.
(b)-(d) The information set forth in the Introduction and Section 14
("Certain Legal Matters") of the Offer to Purchase is incorporated herein by
reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, to the extent not otherwise incorporated herein by reference, is
incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated May 21, 1999.
(2) Letter of Transmittal.
(3) IRS Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(4) Form of Summary Advertisement, dated May 21, 1999.
(5) Form of Notice of Guaranteed Delivery.
(6) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(7) Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and other Nominees.
(8) Press Release, dated May 17, 1999.
(b) Commitment Letter dated as of May 14, 1999 among PCC, Bank of America
National Trust and Savings Association and Banc of America Securities LLC
(formerly known as Nationsbanc Montgomery Securities LLC).
(c)(1) Agreement and Plan of Merger, dated May 17, 1999, among the
Purchaser, PCC and the Company.
(2) Confidentiality and Standstill Agreement, dated March 26, 1999,
between PCC and the Company.
(d) Not applicable.
(e) Not applicable.
(f) The Offer to Purchase and the Letter of Transmittal are incorporated
herein by reference.
6
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this Statement is true, complete and correct.
Date: May 21, 1999
WGC ACQUISITION CORP.
By /s/ William D. Larsson
------------------------------------
Name: William D. Larsson
------------------------------
Title: Vice President and Treasurer
-------------------------------
PRECISION CASTPARTS CORP.
By /s/ William D. Larsson
------------------------------------
Name: William D. Larsson
------------------------------
Title: Vice President and Chief
Financial Officer
-------------------------------
7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
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<S> <C>
(a)(1) Offer to Purchase, dated May 21, 1999.
(a)(2) Letter of Transmittal.
(a)(3) IRS Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(4) Form of Summary Advertisement, dated May 21, 1999.
(a)(5) Form of Notice of Guaranteed Delivery.
(a)(6) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(7) Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and other
Nominees.
(a)(8) Press Release, dated May 17, 1999.
(b) Commitment Letter dated as of May 14, 1999 among PCC, Bank of America National Trust and Savings
Association and Banc of America Securities LLC (formerly known as Nationsbanc Montgomery Securities
LLC).
(c)(1) Agreement and Plan of Merger, dated May 17, 1999, among the Purchaser, PCC and the Company.
(c)(2) Confidentiality and Standstill Agreement, dated March 26, 1999, between PCC and the Company.
(d) Not applicable.
(e) Not applicable.
(f) The Offer to Purchase and the Letter of Transmittal are incorporated herein by reference.
</TABLE>
8
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
WYMAN-GORDON COMPANY
AT
$20.00 NET PER SHARE
BY
WGC ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
PRECISION CASTPARTS CORP.
THE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON FRIDAY,
JUNE 18, 1999
UNLESS THE OFFER IS EXTENDED
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN SECTION
1) THAT NUMBER OF SHARES THAT WOULD REPRESENT 66 2/3 PERCENT OF ALL OUTSTANDING
SHARES (DETERMINED ON A FULLY DILUTED BASIS). SEE INTRODUCTION AND SECTION 13.
THE BOARD OF DIRECTORS OF WYMAN-GORDON COMPANY (THE "COMPANY") HAS APPROVED
THE OFFER AND THE MERGER REFERRED TO HEREIN, AND HAS DETERMINED THAT THE TERMS
OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT
THE OFFER.
------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (as defined herein) should either (A) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in the
Letter of Transmittal, have such stockholder's signature thereon guaranteed if
required by Instruction 1 to the Letter of Transmittal, and mail or deliver the
Letter of Transmittal (or such facsimile) and any other required documents to
The Bank of New York (the "Depository"), and either deliver, together with the
Letter of Transmittal, the certificates representing the 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 3 or (B) request such
stockholder's broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for such stockholder. Stockholders having Shares
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 they desire to tender Shares so registered.
If a stockholder desires to tender Shares and such stockholder's
certificates for such 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 documents to reach the Depositary prior to the Expiration Date, such
stockholder may tender such Shares by following the procedures for guaranteed
delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or to the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional copies
of this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be obtained from the Information Agent, the Dealer
Manager or from brokers, dealers, commercial banks or trust companies.
------------------------
THE DEALER MANAGER FOR THE OFFER IS:
[SCHRODER & CO. INC. LOGO]
MAY 21, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<C> <S> <C>
INTRODUCTION.................................................................................................... 3
1. TERMS OF THE OFFER; EXPIRATION DATE.................................................................. 4
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES........................................................ 5
3. PROCEDURE FOR TENDERING SHARES....................................................................... 6
4. WITHDRAWAL RIGHTS.................................................................................... 9
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.............................................................. 10
6. PRICE RANGE OF SHARES; CASH DISTRIBUTIONS............................................................ 11
7. CERTAIN INFORMATION CONCERNING THE COMPANY........................................................... 11
8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PCC................................................. 13
9. SOURCE AND AMOUNT OF FUNDS........................................................................... 14
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY................................................... 16
11. THE PURPOSE OF THE OFFER; MERGER AGREEMENT; PLANS FOR THE COMPANY.................................... 16
12. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, NYSE LISTING AND EXCHANGE ACT REGISTRATION......... 23
13. CERTAIN CONDITIONS OF THE OFFER...................................................................... 24
14. CERTAIN LEGAL MATTERS................................................................................ 25
15. FEES AND EXPENSES.................................................................................... 26
16. MISCELLANEOUS........................................................................................ 27
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER AND PCC..................................................... S-1
</TABLE>
2
<PAGE>
To the Holders of Common Stock
of Wyman-Gordon Company:
INTRODUCTION
WGC Acquisition Corp., a Massachusetts corporation (the "Purchaser"), which
is a wholly owned subsidiary of Precision Castparts Corp., an Oregon corporation
("PCC"), hereby offers to purchase all outstanding shares of Common Stock, $1.00
par value per share (collectively, the "Shares"), of Wyman-Gordon Company, a
Massachusetts corporation (the "Company"), at a purchase price of $20.00 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 with any amendments or supplements hereto or thereto,
collectively constitute the "Offer").
The purpose of the Offer is to enable PCC to acquire the entire equity
interest in the Company. The Offer is being made pursuant to an Agreement and
Plan of Merger dated as of May 17, 1999 by and among the Purchaser, PCC and the
Company (the "Merger Agreement"). The Merger Agreement provides for, among other
things, the Purchaser to commence a cash tender offer to purchase all of the
Shares of the Company for $20.00 per Share. As soon as practicable following the
consummation of the Offer, it is intended that the Purchaser will merge into the
Company (the "Merger") pursuant to the applicable provisions of the
Massachusetts General Laws ("MGL"). The purpose of the Merger is to facilitate
the acquisition of the Shares not tendered and purchased pursuant to the Offer.
Under the terms of the Merger Agreement, upon consummation of the Merger each
then outstanding Share (other than Shares owned by the Purchaser or PCC, if any)
would be converted into the right to receive an amount in cash equal to the
price per Share paid pursuant to the Offer (the "Offer Price").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer. The
Purchaser will pay all fees and expenses of The Bank of New York, which is
acting as the depositary (the "Depositary"), D.F. King & Co., Inc., which is
acting as Information Agent (the "Information Agent") and Schroder & Co. Inc.,
which is acting as the Dealer Manager (the "Dealer Manager") incurred in
connection with the Offer. See Section 15.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND THE MAKING OF THE OFFER BY THE PURCHASER, AND HAS DETERMINED THAT
THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF,
THE COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY
ACCEPT THE OFFER.
Goldman Sachs & Co. has delivered to the Board of Directors of the Company
its opinion that the consideration to be received by the holders of Shares in
the Offer and the Merger is fair to such holders from a financial point of view.
A copy of the opinion of Goldman Sachs & Co. is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9"),
which is being mailed to stockholders herewith.
THE OFFER IS CONDITIONED UPON THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN
PRIOR TO THE EXPIRATION DATE (AS DEFINED IN SECTION 1) THAT NUMBER OF SHARES
(THE "MINIMUM NUMBER OF SHARES") THAT WOULD REPRESENT 66 2/3 PERCENT OF ALL
OUTSTANDING SHARES OF THE COMPANY (ON A FULLY DILUTED BASIS) (THE "MINIMUM
CONDITION"). SUBJECT TO OBTAINING THE CONSENT OF THE COMPANY, THE PURCHASER
RESERVES THE RIGHT (SUBJECT TO THE APPLICABLE RULES AND REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION ("SEC")), WHICH IT CURRENTLY HAS NO INTENTION
OF EXERCISING, TO WAIVE OR REDUCE THE MINIMUM CONDITION AND TO ELECT TO
PURCHASE, PURSUANT TO THE OFFER, FEWER THAN THE MINIMUM NUMBER OF SHARES. SEE
SECTIONS 1 AND 13.
3
<PAGE>
Certain other conditions to the Offer are described in Section 13. Subject
to the limitations of the Merger Agreement, the Purchaser reserves the right to
waive any one or more of the conditions to the Offer. See Sections 2 and 13.
According to the Company, as of May 17, 1999, there were 35,538,733 Shares
issued and outstanding. According to the Company, there were 2,599,653 Shares
subject to outstanding options and 84,604 Shares issuable pursuant to the
Company's Employee Stock Purchase Plan as of May 17, 1999. The Merger Agreement
provides that, on the date on which the Purchaser accepts Shares pursuant to the
Offer, each option shall be canceled in exchange for a payment to the option
holder equal to the Offer Price less the exercise price of such option
multiplied by the number of shares previously subject to such option (reduced by
any applicable withholding). Based on the foregoing, and assuming that no
changes occur prior to the date of purchase pursuant to the Offer, there would
currently be 38,222,990 Shares outstanding on a fully diluted basis and the
Minimum Number of Shares would be 25,481,994. However, the actual Minimum Number
of Shares will depend upon the facts as they exist on the date of purchase.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), the Purchaser will accept for payment and pay for all Shares that
are validly tendered prior to the Expiration Date and not withdrawn as permitted
by Section 4. The term "Expiration Date" means 12:00 Midnight, Eastern time, on
June 18, 1999, unless and until the period during which the Offer is open shall
have been extended in accordance with the terms of the Merger Agreement, in
which event the term "Expiration Date" shall mean the latest time and date at
which the Offer, as so extended, will expire.
THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM CONDITION, THE
EXPIRATION OR EARLY TERMINATION OF THE APPLICABLE WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER (THE "HSR ACT") AND THE SATISFACTION OF THE OTHER
CONDITIONS SET FORTH IN SECTION 13.
If by 12:00 Midnight, Eastern time, on Friday, June 18, 1999 (or any date
and time then set as the Expiration Date), any or all of the conditions to the
Offer have not been satisfied or waived, the Purchaser reserves the right (but
shall not be obligated), subject to the applicable rules and regulations of the
SEC and subject to limitations in the Merger Agreement, to (a) terminate the
Offer and not accept for payment or pay for any Shares and return all tendered
Shares to tendering stockholders, (b) waive all the unsatisfied conditions and
accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn, (c) extend the Offer and, subject
to the right of stockholders to withdraw Shares until the Expiration Date,
retain the Shares that have been tendered during the period or periods for which
the Offer is extended or (d) amend the Offer. See Section 11. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE FOR TENDERED SHARES,
WHETHER OR NOT THE PURCHASER EXERCISES ITS RIGHT TO EXTEND THE OFFER.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer. Any extension, amendment or termination will be followed as
promptly as practicable by public announcement. In the case of an extension,
Rule 14e-1(d) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires that the announcement be issued no later than 9:00
a.m., Eastern 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. Subject to applicable law (including Rules
14d-4(c) and 14d-6(d) under the Exchange Act, which require that any material
change in the
4
<PAGE>
information published, sent or given to stockholders in connection with the
Offer be promptly disseminated to stockholders in a manner reasonably designed
to inform stockholders of such change), and without limiting the manner in which
the Purchaser may choose to make any public announcement, the Purchaser will not
have any obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service. As used in this Offer to Purchase, "business day" has the meaning set
forth in Rule 14d-1 under the Exchange Act.
If the Purchaser extends the Offer or if the Purchaser is delayed in its
acceptance for payment of or payment (whether before or after its acceptance for
payment of Shares) for Shares or it 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 stockholders
are entitled to withdrawal rights as described in Section 4. However, the
ability of the Purchaser to delay the payment for Shares that the Purchaser has
accepted for payment is limited by Rule 14e-1(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 such bidder's 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 an offer must remain open
following material changes in the terms of an offer or information concerning an
offer, other than a change in the percentage of securities sought or a change in
price, will depend upon the facts and circumstances, including the relative
materiality of the changes or information.
If, prior to the Expiration Date and subject to the limitations in the
Merger Agreement, the Purchaser should increase or decrease the percentage of
Shares being sought, or increase or decrease the consideration offered pursuant
to the Offer to holders of Shares, such increase or decrease would be applicable
to all holders whose Shares are accepted for payment pursuant to the Offer and
if, at the time notice of any increase or decrease is first published, sent or
given to holders of Shares, the Offer is scheduled to expire at any time earlier
than the tenth business day from and including the date that such notice is
first so published, sent or given, the Offer would be extended at least until
the expiration of such ten business-day period. With respect to a change in
price or a change in the percentage of securities sought, a minimum period of
ten business days is generally required to allow for adequate dissemination to
stockholders and investor response.
This Offer to Purchase and the related Letter of Transmittal is being mailed
to the record holders of Shares and will be furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the Company's stockholder list or, if applicable,
who are listed as participants in a clearing agency's security position listing
for subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment, and will pay for all Shares
validly tendered prior to the Expiration Date (and not properly withdrawn in
accordance with Section 4) promptly after the Expiration Date. See Sections 1
and 13. If any condition to the Offer specified in the Merger Agreement or in
Section 13 of the Offer to Purchase is not satisfied at the Expiration Date, the
Purchaser must either (a) waive the unsatisfied condition and accept for payment
and pay for any tendered Shares, (b) terminate the Offer and return all tendered
Shares to the tendering stockholders, or (c) further extend the Offer resulting
in an extension of the right of stockholders to withdraw tendered Shares until
the new Expiration Date.
5
<PAGE>
PCC expects to file a Notification and Report Form with respect to the Offer
under the HSR Act as soon as practicable. The initial waiting period under the
HSR Act with respect to the Offer will expire at 11:59 p.m., Eastern time, on
the 15th day after the filing date, unless early termination of the waiting
period is granted. However, the Antitrust Division of the Department of Justice
(the "Antitrust Division") or the Federal Trade Commission (the "FTC") may
extend the waiting period by requesting additional information or documentary
material from PCC or the Company. If such a request is made, such waiting period
will expire at 11:59 p.m., Eastern time, on the 10th day after substantial
compliance by PCC or the Company with such request. In addition, if PCC
withdraws its initial filing, at the request of the FTC or otherwise, and
refiles its Notification and Report Form, a new 15 day waiting period would
begin on the date of the refiling. See Section 14 hereof for additional
information concerning the HSR Act and the applicability of the antitrust laws
to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as, if
and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance for payment of such Shares pursuant to the Offer. Upon
the terms and subject to the conditions of the Offer, payment for Shares
accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payments from the Purchaser
and transmitting such payments to stockholders whose Shares have been accepted
for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE OFFER PRICE FOR
TENDERED SHARES BE PAID, REGARDLESS OF ANY DELAY IN MAKING THE PAYMENT AFTER THE
EXPIRATION DATE.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares or timely confirmation (a "Book-Entry
Confirmation") of a book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedure set forth in Section 3, (ii) the Letter of Transmittal
(or a facsimile thereof), properly completed and duly executed, with any
required signature guarantees, and (iii) any other documents required by the
Letter of Transmittal.
If any tendered Shares are not accepted for payment for any reason,
certificates evidencing unpurchased Shares will be returned, without expense, to
the tendering stockholder (or, in the case of Shares tendered by book-entry
transfer into the Depositary's account at the Book-Entry Transfer Facility
pursuant to the procedures set forth in Section 3, such Shares will be credited
to an account maintained at the Book-Entry Transfer Facility), as promptly as
practicable following the expiration or termination of the Offer.
3. PROCEDURE FOR TENDERING SHARES.
In order for a holder of Shares validly to tender Shares pursuant to the
Offer, (i) the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed, together with any required signature guarantees, or
an Agent's Message in connection with a book-entry delivery of Shares, and any
other documents required by the Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase and either the certificates evidencing tendered Shares ("Share
Certificates") must be received by the Depositary at such address or such Shares
must be tendered pursuant to the procedure for book-entry transfer described
below and a Book-Entry Confirmation (as defined below) must be received by the
Depositary, in each case prior to the Expiration Date, or (ii) the tendering
stockholder must comply with the guaranteed delivery procedure described below.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
6
<PAGE>
TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER.
SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will establish accounts with respect to
the Shares at the Book-Entry Transfer Facility for purposes of the Offer within
two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of the Book-Entry Transfer
Facility may make book-entry delivery of Shares by causing such Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at such
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer at a Book-Entry Transfer Facility,
the Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's
Message, and any other required documents must, in any case, be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase prior to the Expiration Date, or the tendering stockholder must comply
with the guaranteed delivery procedure 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."
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.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
SIGNATURE GUARANTEES. Signatures on Letters 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., or by a
bank or trust company having an office or correspondent in the United States
(each of the foregoing being referred to as an "Eligible Institution"), except
no signature guarantee is required where Shares are tendered (i) by a registered
holder of Shares who has not completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on the Letter
of Transmittal or (ii) for the account of an Eligible Institution. See
Instruction 1 of the Letter of Transmittal. If the Share Certificates 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 Share Certificates not accepted for
payment or not tendered are to be returned, to a person other than the
registered holder(s), the Share Certificates, as the case may be, must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear on such certificates,
with the signature(s) on such certificates or stock powers guaranteed as
aforesaid. See Instructions 1 and 5 of the Letter of Transmittal.
A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL (OR A FACSIMILE
THEREOF) MUST ACCOMPANY EACH DELIVERY OF SHARE CERTIFICATES TO THE DEPOSITARY.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates are not immediately
available or such stockholder cannot deliver the Share Certificates and all
other required documents to the Depositary prior to the Expiration Date, or such
7
<PAGE>
stockholder cannot complete the procedure for delivery by book-entry transfer on
a timely basis, such Shares may nevertheless be tendered, provided that all of
the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by the Purchaser, is received
by the Depositary, as provided below, on or prior to the Expiration
Date; and
(iii) the Share Certificates (or a Book-Entry Confirmation) representing all
tendered Shares, in proper form for transfer, in each case together
with the Letter of Transmittal (or a 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 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
("NYSE") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, telex, 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.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) certificates for
(or a timely Book-Entry Confirmation with respect to) such Shares, (b) 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 (c) any other documents required by the Letter
of Transmittal. Accordingly, tendering stockholders may be paid at different
times depending upon when certificates for Shares or Book-Entry Confirmations
with respect to Shares, are actually received by the Depositary.
DETERMINATION OF VALIDITY. In order for any tender of Shares to be valid,
it must be in proper form. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Purchaser, in its sole discretion, which determination
shall be final and binding on all parties. The Purchaser reserves the absolute
right to reject any and all tenders determined by it not to be in proper form or
the acceptance for payment of which may, in the opinion of its counsel, be
unlawful. The Purchaser also reserves the absolute right to waive any defect or
irregularity in any tender of Shares of any particular stockholder whether or
not similar defects or irregularities are waived in the case of other
stockholders. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived. None of the Purchaser,
PCC, the Depositary, the Information Agent, the Dealer Manager 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 determinations with regard to compliance with the
terms and conditions of the Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding.
OTHER REQUIREMENTS. By executing a Letter of Transmittal as set forth
above, the tendering stockholder irrevocably appoints designees of the Purchaser
as such stockholder's proxies, each with full power of substitution, to the full
extent of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other Shares or other securities issued or issuable in respect of such
Shares on or after May 17, 1999. Such appointment is effective when, and only to
the extent that, the Purchaser deposits the payment for such Shares with the
Depositary. Upon the effectiveness of such appointment, all prior proxies,
consents and powers of attorney given by such stockholder will be revoked, and
no subsequent proxies, consents and powers of attorney may be given (and, if
given, will not be deemed effective). The designees of the Purchaser will, with
respect to the Shares and other securities for which appointment is effective,
be empowered to exercise all voting and other rights of such stockholder in
respect of any annual, special or adjourned meeting of the
8
<PAGE>
stockholders of the Company, 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 payment for such Shares, the
Purchaser must be able to exercise full voting rights with respect to such
Shares and other securities.
A valid tender of Shares pursuant to one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer. The Purchaser's acceptance for payment of Shares
tendered pursuant to the Offer will constitute a binding agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
TO AVOID BACKUP WITHHOLDING OF FEDERAL INCOME TAX WITH RESPECT TO PAYMENT TO
CERTAIN STOCKHOLDERS OF THE OFFER PRICE FOR THE SHARES PURCHASED PURSUANT TO THE
OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S
CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH STOCKHOLDER IS NOT
SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE
FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION 10 OF THE LETTER
OF TRANSMITTAL.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, 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 by the Purchaser pursuant to the Offer,
may also be withdrawn at any time after July 19, 1999.
If the Purchaser extends the Offer, is delayed in the acceptance for payment
of Shares or is unable to purchase Shares validly tendered pursuant to the Offer
for any reason, then, without prejudice to the Purchaser's rights under the
Offer, the Depositary may nevertheless, on behalf of the Purchaser, retain
tendered Shares, and such Shares may not be withdrawn except to the extent that
tendering stockholders are entitled to withdrawal rights as described in this
Section 4. Any such delay will be by an extension of the Offer to the extent
required by law.
For a withdrawal to be effective, a written telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from that of the person who tendered such
Shares. If Share certificates to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial number shown on such certificates must be submitted to
the Depositary and the signature(s) on the notice of withdrawal must be
guaranteed by an Eligible Institution unless such Shares have been tendered for
the account of any Eligible Institution. If Shares have been tendered pursuant
to the procedure for book-entry transfer as set forth in Section 3, any notice
of withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, PCC, the Depositary, the Information Agent, the Dealer Manager or any
other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification.
Any Shares properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in Section 3.
9
<PAGE>
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following discussion summarizes the principal federal income tax
consequences under the Internal Revenue Code of 1986, as amended (the "Code"),
associated with the Offer, assuming that the Offer is consummated as
contemplated herein. This summary does not purport to be comprehensive, does not
describe all potentially relevant tax considerations and does not discuss state,
local or foreign tax laws.
The receipt of cash for Shares pursuant to the Offer or the Merger will be a
taxable transaction for federal income tax purposes under the Code (and may also
be a taxable transaction under applicable state, local, foreign and other tax
laws). Generally, for federal income tax purposes, a tendering stockholder will
recognize gain or loss for federal income tax purposes equal to the difference
between the amount of cash received pursuant to the Offer or the Merger and the
holder's adjusted tax basis for the Shares sold pursuant to the Offer or
converted in the Merger. Such gain or loss will be capital gain or loss,
assuming the Shares are held as capital assets. If the Shares are held longer
than one year, the capital gain will be long term.
The rate at which any such gain will be taxed to noncorporate shareholders
(including individuals, estates and trusts) will, as a general matter, depend
upon each shareholder's holding period in the Shares and taxable income for the
year. If a noncorporate shareholder has net capital gain (the excess of net
long-term capital gain over net short-term capital loss) for his or her taxable
year in which the gain is recognized and such shareholder's holding period for
the Shares is more than one year, either a 20 percent or a 10 percent capital
gains rate generally will apply to such gain, depending on the amount of taxable
income of such shareholder for such year. If the shareholder's holding period
for the Shares is one year or less, such gain will be taxed at the same rates as
ordinary income, currently at a maximum of 39.6 percent. Capital loss generally
is deductible only to the extent of capital gain plus $3,000. Net capital loss
in excess of $3,000 may be carried forward to subsequent taxable years.
For corporations, capital losses are allowed only to the extent of capital
gains, and net capital gain is taxed at the same rate as ordinary income.
Corporations generally may carry capital losses back up to three years and
forward up to five years.
Information reporting requirements will apply to payments for the Shares
pursuant to the Offer or Merger. Backup withholding at a rate of 31 percent will
generally apply unless a shareholder provides an accurate taxpayer
identification number and certifies that such shareholder is not subject to
backup withholding. See Instruction 10 of the Letter of Transmittal.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE WITH RESPECT TO SHARES
RECEIVED PURSUANT TO THE EXERCISE OF STOCK OPTIONS OR OTHERWISE AS COMPENSATION
OR WITH RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL TAX TREATMENT
UNDER THE CODE, SUCH AS NON-U.S. PERSONS, INSURANCE COMPANIES, TAX-EXEMPT
ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND SECURITIES DEALERS, AND MAY NOT
APPLY TO A HOLDER OF SHARES IN LIGHT OF INDIVIDUAL CIRCUMSTANCES. HOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL
OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE MERGER.
10
<PAGE>
6. PRICE RANGE OF SHARES; CASH DISTRIBUTIONS.
The Company's Common Stock is listed and traded principally on the NYSE
under the trading symbol "WYG." Prior to December 18, 1998, the Company's Common
Stock was traded on the Nasdaq Stock Market (National Market) under the symbol
"WYMN." The following table sets forth, for the quarters indicated, the high and
low sales prices as reported on the NYSE or the Nasdaq National Market System
(prior to December 18, 1998) for the Shares based on the Company's Annual Report
on Form 10-K for the year ended May 31, 1998 (the "Company's 1998 Form 10-K")
and other publicly available sources.
<TABLE>
<CAPTION>
HIGH LOW
---------- --------
<S> <C> <C>
Year Ended May 31, 1997:
First Quarter........................................................... $ 21 1/4 $ 15 3/8
Second Quarter.......................................................... 24 3/8 19 5/8
Third Quarter........................................................... 23 3/8 17 7/8
Fourth Quarter.......................................................... 23 11/16 18 1/8
Year Ended May 31, 1998:
First Quarter........................................................... $ 28 1/4 $ 23 3/8
Second Quarter.......................................................... 30 20 3/8
Third Quarter........................................................... 22 1/8 16 1/2
Fourth Quarter.......................................................... 23 1/8 19 3/4
Year Ending May 31, 1999:
First Quarter........................................................... $ 20 7/8 $ 12 7/8
Second Quarter.......................................................... 17 1/2 11 1/2
Third Quarter........................................................... 16 7 1/8
</TABLE>
On May 14, 1998, the last full trading day prior to the announcement of the
Offer, the closing sale price per share of the Company's Common Stock reported
on the NYSE was $13 1/4. On May 20, 1999, the last full trading day before the
commencement of the Offer, the closing sale price per share of the Company's
Common Stock reported on the NYSE was $19 3/16.
According to the Company's 1998 Form 10-K, the Company has not paid
dividends on the Company's Common Stock.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
The information concerning the Company contained in this Offer to Purchase,
including financial information, has been furnished by the Company or taken
from, or based upon, publicly available documents and records on file with the
SEC and other public sources. The summary information concerning the Company in
this Section 7 and elsewhere in this Offer to Purchase is derived from the
Company's 1998 Form 10-K and its Quarterly Report on Form 10-Q for the quarterly
period ended February 28, 1999. The summary information set forth below is
qualified in its entirety by reference to such documents (which may be obtained
and inspected as described below) and should be considered in conjunction with
the more comprehensive financial and other information in such documents and
other publicly available reports and documents filed by the Company with the
SEC. The Purchaser assumes no responsibility for the accuracy or completeness of
the information contained in such documents and records, or for any failure by
the Company to disclose events that may have occurred and may affect the
significance or accuracy of any such information but which are not known to the
Purchaser.
GENERAL. The Company is a Massachusetts corporation. According to the
Company's 1998 Form 10-K, the Company is a leading manufacturer of high-quality,
technologically advanced forging and investment casting components for the
commercial aviation, commercial power and defense industries.
11
<PAGE>
The Company produces metal components for applications such as jet turbine
engines, airframes and land-based and marine gas turbine engines. The Company
also produces extruded seamless thick wall pipe, made from steel and other
alloys, for use primarily in the oil and gas industry and commercial power
generation plants.
CERTAIN FINANCIAL INFORMATION. Set forth below is certain selected
consolidated financial data with respect to the Company and its subsidiaries,
which was excerpted from the Company's 1998 Form 10-K and its Quarterly Report
on Form 10-Q for the quarterly period ended February 28, 1999. More
comprehensive financial information is included in such reports (including
management's discussion and analysis of financial condition and results of
operations) and other documents filed by the Company with the SEC, and the
following financial information is qualified in its entirety by reference to
such reports and other documents and all of the financial information and notes
contained therein. Such reports and other documents may be examined and copies
thereof may be obtained in the manner set forth below.
WYMAN-GORDON COMPANY
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
FEBRUARY 28, MAY 31,
---------------------- ----------------------
<S> <C> <C> <C> <C>
1999 1998 1998 1997
---------- ---------- ---------- ----------
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenue........................................................ $ 639,716 $ 551,142 $ 752,913 $ 608,742
Cost of goods sold............................................. 547,125 463,415 637,267 511,108
Selling, general and administrative expenses................... 42,488 39,529 51,654 44,229
Net income..................................................... 17,541 23,966 33,890 50,023
</TABLE>
<TABLE>
<CAPTION>
MAY 31,
----------------------
1998 1997
FEBRUARY 28, ---------- ----------
1999
------------
(UNAUDITED)
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Working capital........................................................... $ 211,468 $ 223,764 $ 166,205
Total assets.............................................................. 571,266 551,610 454,371
Total liabilities......................................................... 359,625 346,790 289,973
Stockholders' equity...................................................... 211,641 204,820 164,398
</TABLE>
AVAILABLE INFORMATION. The Company is subject to the information filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file with the SEC periodic reports, proxy statements and other information
relating to its business, financial condition and other matters. Information as
of particular dates concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities and any material interest of such persons in transactions
with the Company is required to be disclosed in reports filed with the SEC or in
proxy statements distributed to the Company's stockholders and filed with the
SEC. Such reports, proxy statements and other information may be inspected at
the SEC's office at the public reference facilities of the SEC at 450 Fifth
Street, NW, Washington, D.C., 20549, and also should be available for inspection
at the regional offices of the SEC located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade Center, 13th
Floor, New York, New York 10048. Copies of such materials should be obtainable,
upon payment of the SEC's customary charges, by writing to the SEC's principal
office at 450 Fifth Street, NW, Washington, D.C., 20549. The SEC also maintains
a website at
12
<PAGE>
http://www.sec.gov that contains reports, proxy statements and other
information. The information also should be available at the offices of the
NYSE, 11 Wall Street, New York, New York 10005.
8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PCC.
GENERAL. The Purchaser, a Massachusetts corporation and a wholly owned
subsidiary of PCC, was recently organized to acquire the Company and has not
conducted any unrelated activities since its organization. The principal office
of the Purchaser is located at the principal office of PCC. All outstanding
shares of capital stock of the Purchaser are owned by PCC.
PCC, an Oregon corporation, is a manufacturer of complex metal components
and products. PCC is the market leader in manufacturing large, complex
structural investment castings and is the leading manufacturer of airfoil
castings used in jet aircraft engines. In addition, PCC has expanded into the
industrial gas turbine, fluid management, industrial metalworking tools and
machines, powdered metal and other metal products markets. The principal
executive offices of PCC are located at 4650 SW Macadam Avenue, Suite 440,
Portland, Oregon 97201; the telephone number is (503) 417-4800.
CERTAIN FINANCIAL INFORMATION. Set forth below is certain selected
consolidated financial information with respect to PCC and its subsidiaries
excerpted from the consolidated financial statements incorporated by reference
in PCC's Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1"), copies
of which are available for inspection at the SEC's office at 450 Fifth Street,
NW, Washington, D.C., 20549, and also should be available for inspection at the
regional offices of the SEC located at Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois, and 7 World Trade Center, 13th Floor, New York,
New York. Copies of such materials should be obtainable, upon payment of the
SEC's customary charges, by writing to the SEC's principal office at 450 Fifth
Street, NW, Washington, D.C., 20549. The SEC's website at http://www.sec.gov
should also contain a copy of the Schedule 14D-1.
PRECISION CASTPARTS CORP.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED FISCAL YEAR ENDED
------------------------ ------------------------
<S> <C> <C> <C> <C>
DEC. 27, DEC. 28, MARCH 29 MARCH 30,
1998 1997 1998 1997
------------ ---------- ------------ ----------
<CAPTION>
(UNAUDITED)
<S> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
INCOME DATA:
Net sales.................................................. $ 1,094,600 $ 961,500 $ 1,316,700 $ 972,800
Costs of goods sold........................................ 838,900 752,300 1,025,100 765,500
Selling and administrative expenses........................ 112,400 91,300 127,000 91,500
Net income................................................. 75,400 61,800 86,100 56,500
</TABLE>
<TABLE>
<CAPTION>
MARCH 29, MARCH 30,
1998 1997
DEC. 27, ---------- ----------
1998
-----------
(UNAUDITED)
<S> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Working capital.......................................................... $ 258,500 $ 246,000 $ 205,200
Total assets............................................................. 1,431,600 1,274,600 1,070,100
Total liabilities........................................................ 763,900 679,300 565,700
Shareholders' investment................................................. 667,700 595,300 504,400
</TABLE>
Except for 100 shares of common stock of the Company beneficially owned by
PCC, neither the Purchaser nor, to the best knowledge of the Purchaser and PCC,
any of the persons listed on Schedule I
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hereto or any associate of the Purchaser, including PCC, or any of the persons
so listed, beneficially owns or has a right to acquire directly or indirectly
any securities of the Company, and neither the Purchaser nor, to the best
knowledge of the Purchaser, any of the persons or entities referred to above,
including PCC, or any of the respective executive officers, directors or
subsidiaries of any of the foregoing, has effected any transactions in the
securities of the Company during the past 60 days.
Except as set forth in this Offer to Purchase, none of the Purchaser, PCC
or, to the best knowledge of the Purchaser and PCC, any of the persons listed on
Schedule I hereto has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including,
but not limited to, contracts, arrangements, understandings or relationships
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, none of the Purchaser, PCC or, to the best knowledge of the Purchaser,
any of the persons listed on Schedule I hereto, has had since January 1, 1996
any business relationships or transactions with the Company or any of its
executive officers, directors or affiliates that are required to be reported
under the rules and regulations of the SEC applicable to the Offer. Except as
set forth in this Offer to Purchase, since January 1, 1996, there have been no
contacts, negotiations or transactions between the Purchaser, PCC or, to the
best knowledge of the Purchaser, any of the persons listed in Schedule I hereto,
on the one hand, and the Company or its affiliates, on the other hand,
concerning a merger, consolidation or acquisition, a tender offer or other
acquisition of securities, an election of directors, or a sale or other transfer
of a material amount of assets.
9. SOURCE AND AMOUNT OF FUNDS.
The Purchaser estimates that the total amount of funds required to purchase
pursuant to the Offer the number of Shares that are outstanding on a fully
diluted basis and to pay fees and expenses related to the Offer will be
approximately $753 million. The Purchaser plans to obtain all funds needed for
the Offer from PCC. PCC will make an unsecured advance to the Purchaser prior to
the consummation of the Offer. PCC expects to obtain the funds needed for the
Offer from its general corporate funds and from borrowings under credit
facilities pursuant to a commitment letter, as described below.
PCC has entered into a commitment letter (the "Commitment Letter") with Bank
of America National Trust and Savings Association ("Bank of America") and Banc
of America Securities LLC (formerly known as Nationsbanc Montgomery Securities
LLC) ("BAS") pursuant to which, subject to the terms and conditions thereof,
Bank of America will provide PCC financing in an aggregate amount of up to $1.25
billion (the "Facilities"). The Commitment Letter contemplates that PCC will
utilize borrowings under the Facilities to purchase Shares pursuant to the
Offer, to refinance certain existing indebtedness of PCC and the Company and to
fund a tender offer for the Company's 8% Senior Notes due 2007.
Bank of America has committed to lend the full amount of the Facilities on
the terms and subject to the conditions set forth in the Commitment Letter, and
BAS has agreed to form a syndicate of financial institutions (the "Lenders")
reasonably acceptable to PCC and Bank of America, on the terms and subject to
the conditions set forth in the Commitment Letter.
Pursuant to the Commitment Letter, the Facilities are expected to consist
of: (i) a $400 million revolving credit facility (the "Revolving Credit
Facility"), (ii) a $550 million Tranche A term loan facility (the "Tranche A
Term Loan Facility") and (iii) a $300 million interim term loan facility (the
"Interim Term Loan Facility").
The following is a summary of the principal terms of the Facilities based on
the Commitment Letter. This summary is qualified in its entirety by reference to
the Commitment Letter, a copy of which has been filed as an exhibit to the
Schedule 14D-1 filed with the SEC in connection with the Offer.
The Commitment Letter provides that the commitments under the Commitment
Letter will terminate unless definitive documentation for the Facilities is
executed on or before July 31, 1999. Closing of the
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<PAGE>
loans pursuant to the Facilities must occur no later than nine months after PCC
files its pre-merger notification and report form under the HSR Act. The Interim
Term Loan Facility will mature 364 days from closing of the Facilities, and the
Tranche A Term Loan Facility and the Revolving Credit Facility will mature six
years from the closing of the Facilities. The Tranche A Term Loan Facility will
be subject to quarterly amortization of principal based on annual amounts to be
determined. In addition, the Tranche A Term Loan and the Interim Term Loan will
be subject to certain mandatory prepayments tied to asset sales, debt issuances,
equity offerings, securitizations, and insurance and condemnation events.
Certain of these prepayment and commitment reduction requirements will be
limited upon PCC's attainment of an investment grade rating for its senior
unsecured long-term debt.
The amounts borrowed pursuant to the Facilities will bear interest at a rate
equal to LIBOR plus the applicable margin or the Alternate Base Rate (to be
defined as the higher of (i) the Bank of America prime rate and (ii) the Federal
Funds rate plus .50%) plus the applicable margin. The applicable margin for
LIBOR and Alternate Base Rate loans will be calculated in accordance with a
pricing grid referenced to PCC's long-term, unsecured senior, non-credit
enhanced debt ratings.
The Facilities will contain representations and warranties, negative and
affirmative covenants, conditions precedent and events of default which are
customarily required for similar financings. Such covenants will include, among
others, limitations on liens and negative pledges; limitations on mergers,
consolidations and sales of assets; limitations on incurrence of debt;
limitations on investments (including loans and advances) and acquisitions
(other than the acquisition of the Company); limitations on transactions with
affiliates; and year 2000 compliance. Key financial covenants based on PCC's
consolidated financial statements include minimum net worth, maximum leverage
ratio (total debt to EBITDA) and minimum fixed charge coverage ratio.
The Facilities will be secured (equally and ratably with PCC's existing $150
million senior notes) by a first priority perfected security interest in all of
the capital stock of each of PCC's material domestic subsidiaries and 65% of the
capital stock of each of PCC's material foreign subsidiaries. The collateral
will be released upon (i) PCC's attainment of an actual or implied senior
unsecured long-term debt rating that is equal to or better than BBB- from
Standard & Poor's Corporation or Baa3 from Moody's Investors Service or (ii)
achievement by PCC of a leverage ratio of less than an amount to be determined.
Funding of the Facilities will be subject to customary closing conditions,
including, among others, the execution of satisfactory documentation, the
receipt of all necessary governmental approvals relating to the acquisition of
the Company, and no material adverse change in the business, operations or
condition (financial or otherwise) of PCC and the Company and their subsidiaries
on a combined basis.
In connection with the Facilities, PCC has agreed to pay the Lenders certain
commitment, underwriting, administrative and other fees, to reimburse the
Lenders for reasonable out-of-pocket fees and expenses whether or not the
Facilities close, and to provide certain indemnities, as is customary for
commitments such as the Facilities.
PCC anticipates that indebtedness incurred through borrowings under the
Facilities in connection with the Offer and the Merger will be repaid from a
variety of sources, which may include funds generated internally by PCC and its
subsidiaries following the Merger, funds generated by the Company, bank
financing, and the public or private sale of debt or equity securities. No
decision has been made concerning the method PCC will employ to repay such
indebtedness. Such decision will be made based on PCC's review from time to time
of the advisability of particular actions, as well as on prevailing interest
rates and financial and other conditions and such other factors as PCC may deem
appropriate. PCC expressly reserves its right to obtain financing for the
transactions through alternative sources.
THE OFFER IS NOT CONDITIONED ON THE PURCHASER OBTAINING FINANCING TO
PURCHASE SHARES PURSUANT TO THE OFFER. SEE INTRODUCTION AND SECTION 13.
15
<PAGE>
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
On January 13, 1999, PCC's financial advisor, Schroder & Co. Inc., met with
representatives of the Company to express PCC's interest in discussing the
possibility of a business combination with the Company and to request a meeting
between PCC and Company executives. On January 29, 1999, William C. McCormick,
Chairman and Chief Executive Officer of PCC, and William D. Larsson, Chief
Financial Officer of PCC, met with David P. Gruber, Chairman and Chief Executive
Officer of the Company, and a financial officer of the Company and discussed the
possibility of a business combination. PCC did not receive non-public
information with respect to the Company at that time, and no specific terms were
discussed.
On February 4, 1999, PCC sent a letter to the Company indicating PCC's
continued interest in discussing a possible business combination with the
Company and outlining general terms upon which PCC would be interested in
acquiring the Company. PCC did not receive an immediate response from the
Company, and PCC did not have further contact with the Company for several
weeks.
In February 1999, PCC was informed that the Company had engaged Goldman
Sachs & Co. to advise it with respect to strategic alternatives, including a
possible business combination. On March 26, 1999, PCC signed a Confidentiality
Agreement, and subsequently received descriptive information concerning the
Company.
On April 28, 1999, PCC received an invitation to submit a binding proposal
for the acquisition of all of the outstanding common stock of the Company
setting forth terms and conditions of the proposed purchase. On May 10, 1999,
PCC submitted an initial proposal to acquire the outstanding common stock of the
Company setting forth terms and conditions of the proposed purchase. The Company
advised PCC that proposals from other prospective purchasers were also delivered
to the Company at this time. During the next few days, the Company's legal and
financial advisors discussed terms of PCC's proposal with representatives of
PCC. On May 13, 1999, PCC submitted a revised proposal to acquire the
outstanding common stock of the Company for $20.00 per share.
The Company's Board of Directors met in the evening on May 13, 1999, and
approved PCC's revised proposal on a preliminary basis, subject to certain
clarifications. The Company's legal and financial advisors contacted PCC to
clarify and negotiate certain details of the proposed form of Agreement and Plan
of Merger, which had been submitted as part of PCC's proposal. On May 15, 1999,
the Board of Directors of the Company approved the Merger Agreement and the
Offer and resolved to recommend the Offer to the Company's stockholders.
Thereafter, PCC, the Purchaser and the Company executed the Merger Agreement,
pursuant to which the Purchaser agreed to make the Offer. The parties publicly
announced the transaction on May 17, 1999.
11. THE PURPOSE OF THE OFFER; MERGER AGREEMENT; PLANS FOR THE COMPANY.
PURPOSE
The purpose of the Offer and the Merger is to enable PCC to acquire control
of, and acquire the entire equity interest in, the Company.
MERGER AGREEMENT
Set forth below is a summary of the material provisions of the Merger
Agreement, a copy of which is filed as Exhibit (a)(1) to the Schedule 14D-1.
Such Exhibit should be available for inspection and copies should be obtained,
in the manner set forth in Section 8 of the Offer to Purchase (except that it
will not be available at the regional offices of the SEC). The following summary
is qualified in its entirety by reference to the Merger Agreement.
THE OFFER. The Merger Agreement provides that PCC will cause the Purchaser
to commence and the Purchaser will commence the Offer to purchase all of the
Shares for $20.00 per Share. The Merger
16
<PAGE>
Agreement specifies certain conditions for the Offer, including, among other
things the Minimum Condition. Pursuant to the Merger Agreement, PCC and the
Purchaser expressly reserve the right to change or waive any such condition, to
change the form or amount payable per Share in the Offer (including the Offer
Price), and to make any other changes in the terms and conditions of the Offer;
provided however, that without the prior written consent of the Company, the
Purchaser will not (i) decrease the Offer Price, (ii) change the consideration
into a form other than cash, (iii) add any conditions to the obligation of the
Purchaser to accept for payment and pay for Shares tendered pursuant to the
Offer, (iv) amend (other than to waive) the Minimum Condition or the other
conditions set forth in Section 13, or (v) reduce the maximum number of Shares
to be purchased in the Offer. If on the initial scheduled Expiration Date (the
"Initial Expiration Date") all conditions to the Offer have not been satisfied
or waived, the Purchaser may, from time to time, in its sole discretion, extend
the Expiration Date of the Offer; provided, however, that, except as set forth
below, the Expiration Date, as extended, shall be no later than the date that is
60 business days immediately following the Initial Expiration Date (the "Final
Expiration Date"); and provided further that if on the Initial Expiration Date,
all conditions to the Offer have been satisfied or waived other than the Minimum
Condition, the Purchaser will be required to extend the Expiration Date to the
date that is ten business days immediately following the Initial Expiration
Date.
Notwithstanding the foregoing, if on the Initial Expiration Date, the
applicable waiting period (and any extension thereof) under the HSR Act in
respect of the Offer has not expired or been terminated and all other conditions
to the Offer have been satisfied or waived other than the Minimum Condition and
clause (a) under Section 13 as it relates to compliance with the HSR Act or
other applicable antitrust laws, the Purchaser will be required to extend the
Expiration Date for such additional periods as may be necessary to permit the
parties to seek to obtain termination of the waiting period under the HSR Act up
to the date that is nine months after the date upon which PCC files a pre-merger
notification and report form under the HSR Act (the "HSR Expiration Date");
provided, however, that if the applicable waiting period (and any extension
thereof) under the HSR Act in respect of the Offer expires or is terminated
prior to the date that is ten business days prior to the HSR Expiration Date,
the Expiration Date will be the date which is ten business days immediately
following public disclosure of the expiration or termination of the waiting
period under the HSR Act.
THE MERGER. The Merger Agreement provides that, on the terms and subject to
the conditions set forth in the Merger Agreement and in accordance with the
relevant provisions of the MGL, as soon as practicable following the
satisfaction or waiver, if permissible, of the conditions described below under
"Conditions to the Merger," the Purchaser will be merged with and into the
Company, with the Company as the surviving corporation in the Merger (the
"Surviving Corporation"). The Merger will become effective at the time of filing
of articles of merger with the Secretary of State of the Commonwealth of
Massachusetts in accordance with the MGL (the "Effective Time"). At the
Effective Time, each Share issued and outstanding immediately prior to the
Effective Time (other than Shares owned by PCC, by the Purchaser or by any other
direct or indirect subsidiary of PCC or of the Company, or held in the treasury
of the Company, all of which will be canceled without any conversion thereof and
no payment or distribution will be made with respect thereto) will be canceled
and converted automatically into the right to receive an amount equal to the
Offer Price in cash (the "Merger Consideration") net to the holder, without any
interest thereon.
STOCKHOLDERS MEETING. The Merger Agreement provides that the Company will,
if required by applicable law, call and hold a special meeting of its
stockholders as soon as practicable following the consummation of the Offer for
the purpose of approving the Merger transaction contemplated thereby and prepare
and file with the SEC under the Exchange Act a proxy statement with respect to
the meeting of stockholders described above (the "Proxy Statement"). The Company
has agreed in the Merger Agreement to use its best efforts to respond to any
comments of the SEC or its staff and to cause the Proxy Statement to be mailed
to the Company's shareholders as promptly as practicable after responding to all
such comments to the satisfaction of the staff, and to keep PCC informed of all
its correspondence with the
17
<PAGE>
SEC with respect to the Proxy Statement. Pursuant to the Merger Agreement, the
Company, through its Board of Directors, will recommend to its stockholders that
the Merger Agreement be approved.
STOCK OPTIONS AND WARRANTS. The Merger Agreement provides that each option
and stock appreciation right (collectively, the "Options") which is outstanding
(whether or not currently exercisable) as of immediately prior to the date on
which the Purchaser accepts for payment Shares pursuant to the Offer (the
"Tender Offer Acceptance Date") and which has not been exercised or canceled
prior thereto will, on the Tender Offer Acceptance Date, be canceled and upon
the surrender and cancellation of the option agreement representing such Option,
the Purchaser will pay to the holder thereof cash in an amount equal to the
product of (i) the number of Shares provided for in such Option and (ii) the
excess, if any, of the Offer Price over the exercise price per Share provided
for in such Option, reduced by any applicable withholding.
EMPLOYEE STOCK PURCHASE PLAN. Pursuant to the Merger Agreement, the Company
has advised PCC that it has taken appropriate action to provide that (i) the
current offering period under the Company's Employee Stock Purchase Plan (the
"Stock Purchase Plan") was terminated on the execution date of the Merger
Agreement, (ii) each participant in the Stock Purchase Plan on such date was
deemed to have exercised his or her option on such date and shall acquire from
the Company (A) such number of whole shares of Company Common Stock as his or
her accumulated payroll deductions on such date will purchase at the Option
Price (as defined in the Stock Purchase Plan) (treating the last business day
prior to the execution date of the Merger Agreement as the "Exercise Date" for
all purposes of the Stock Purchase Plan) and (B) cash in the amount of any
remaining balance in such participant's account, and (iii) the Stock Purchase
Plan was terminated as of the execution date of the Merger Agreement.
SHAREHOLDER RIGHTS AGREEMENT. The Company has advised PCC that prior to
execution of the Merger Agreement, the Board of Directors of the Company amended
the Shareholder Rights Agreement, dated as of October 21, 1998, by and between
the Company and State Street Bank and Trust Company (the "Shareholder Rights
Agreement") so that neither the execution nor the delivery of the Merger
Agreement, or the transactions contemplated thereby, will trigger or otherwise
affect any rights or obligations under the Shareholder Rights Agreement, and to
terminate the Shareholder Rights Agreement upon the effectiveness of the Merger.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains
representations and warranties by the Company, relating to, among other things,
(i) the organization of the Company and its subsidiaries and other corporate
matters, (ii) the capital structure of the Company, (iii) the authorization,
execution, delivery and consummation of the transactions contemplated by the
Merger Agreement, (iv) consents and approvals, (v) documents filed by the
Company with the SEC and the accuracy of the information contained therein, (vi)
litigation, (vii) environmental matters, (viii) absence of material changes,
(ix) taxes, (x) books and records of the Company, (xi) properties, (xii)
intellectual property, (xiii) employee benefit plans, (xiv) labor matters, (xv)
year 2000 compliance, (xvi) insurance, (xvii) key customers, (xviii) product
quality and (xix) material contracts.
In addition, the Merger Agreement contains representations and warranties by
PCC, relating to, among other things, the organization and ownership of PCC and
the Purchaser, their authority to enter into the Merger Agreement and the
existence of a commitment letter for credit facilities to finance the Offer and
the Merger.
CONDUCT OF BUSINESS PENDING THE MERGER. In the Merger Agreement, the
Company has agreed that, prior to the Effective Time, except as otherwise
provided in the Merger Agreement, the Company and each of its material
subsidiaries will use its commercially reasonable best efforts to (i) carry on
their respective business in the usual, regular and ordinary course, consistent
with the requirements of law and
18
<PAGE>
past practice and (ii) preserve intact their present business organizations,
keep available the services of their present advisors, managers, officers and
employees and preserve their relationships with customers, suppliers, licensors
and others having business dealings with them and continue existing contracts as
in effect on the date of the Merger Agreement. The Company has agreed that,
without the prior written consent of PCC, neither the Company nor any of its
material subsidiaries will (i) declare, set aside or pay any dividend or other
distribution (whether in cash, stock, or property or any combination thereof) in
respect of any of its capital stock, (ii) split, combine or reclassify any of
its capital stock (iii) repurchase, redeem or otherwise acquire any of its
securities, except as contemplated by the Merger Agreement, or (iv) authorize
for issuance, issue, sell deliver or commit to issue, sell or deliver (whether
through the issuance or granting of options, warrants or commitments,
subscriptions, rights to purchase or otherwise) any stock of any class or any
other securities.
The Company has further agreed, until the effectiveness of the Merger, it
will not, without prior consent of PCC: (a) acquire, sell, lease, encumber,
transfer or dispose of any assets outside the ordinary course of business which
are material to the Company or any of its material subsidiaries, except pursuant
to obligations in effect on the execution date of the Merger Agreement; (b) (i)
incur any amount of indebtedness for borrowed money, guarantee any indebtedness,
guarantee (or become liable for) any debt of others, make any loans, advances or
capital contributions, mortgage, pledge or otherwise encumber any material
assets, create or suffer any material lien thereupon other than in the ordinary
course of business consistent with past practice, (ii) incur any short-term
indebtedness for borrowed money or (iii) issue or sell any debt securities or
warrants or rights to acquire any debt securities, except, in the case of clause
(i) or (ii) above, pursuant to credit facilities in existence on the execution
date of the Merger Agreement in accordance with the terms of such credit
facilities; (c) pay, discharge, or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than any payment, discharge or satisfaction in the ordinary
course of business consistent with past practice or as contemplated by the
Merger Agreement; (d) change any of the accounting principles used by it; (e)
enter into, adopt, amend or terminate any employee benefit plan or any
agreement, arrangement, plan or policy with one or more directors or officers;
(f) increase in any manner the compensation or fringe benefits of any director,
officer or employee or pay any benefit not required by an employee benefit plan
or arrangement as in effect on the execution date of the Merger Agreement; (g)
adopt any amendments to the Articles of Organization or Bylaws or the Company's
Shareholder Rights Agreement; (h) adopt a plan of complete or partial
liquidation or resolutions providing for or authorizing such a liquidation or
dissolution, merger, consolidation, restructuring, recapitalization or
reorganization (other than dissolution of inactive subsidiaries); (i) settle or
compromise any litigation (whether or not commenced prior to the execution date
of the Merger Agreement) other than settlements or compromises of litigation
where the amount paid (after giving effect to insurance proceeds actually
received) in settlement or compromise does not exceed $250,000; or (j) enter
into an agreement to take any of the foregoing actions.
PROHIBITION ON SOLICITATION. Pursuant to the Merger Agreement, the Company
has agreed that the Company and its officers, directors, employees,
representatives and agents will cease any discussions or negotiations that may
be ongoing with respect to an Acquisition Proposal (as defined below). Except as
explicitly permitted by the Merger Agreement, the Company will not and will not
authorize or permit any officer, director or employee of, or any investment
banker, financial advisor, attorney, accountant or other representative,
directly or indirectly, to (a) solicit, initiate, encourage or take any other
action to facilitate any inquiries or the making of any proposal that
constitutes an Acquisition Proposal, or (b) participate in any discussions or
negotiations regarding an Acquisition Proposal.
The Merger Agreement provides that, notwithstanding the foregoing, if at any
time prior to the acceptance for payment of Shares pursuant to the Offer, the
Board of Directors of the Company determines in good faith, after consultation
with counsel, that it is necessary to do so in order to comply with its
fiduciary duties to the Company's stockholders under applicable law, the Company
may, in response to an Acquisition Proposal (a) furnish non-public information
with respect to the Company to the
19
<PAGE>
person who made such Acquisition Proposal pursuant to a confidentiality
agreement on terms no more favorable to such person than the confidentiality
agreement entered into between the Company and PCC and (b) participate in
negotiations regarding such Acquisition Proposal.
The Merger Agreement provides further that the Board of Directors of the
Company will not (i) withdraw or modify in a manner adverse to PCC or the
Purchaser its approval or recommendation of the Merger Agreement, the Offer or
the Merger, (ii) approve or recommend an Acquisition Proposal to its
stockholders, or (iii) cause the Company to enter into any definitive
acquisition agreement with respect to an Acquisition Proposal, unless the Board
of Directors of the Company has determined in good faith, after consultation
with counsel, that the Acquisition Proposal is a Superior Proposal (as defined
below) and such action is necessary to comply with its fiduciary duties to the
Company's stockholders under applicable law. In the event that before the Tender
Offer Acceptance Date the Board of Directors of the Company determines in good
faith, after consultation with counsel, that it is necessary to do so in order
to comply with its fiduciary duties to the Company's stockholders under
applicable law, the Merger Agreement provides that the Board of Directors of the
Company may enter into an agreement with respect to a Superior Proposal, but
only 48 hours after PCC's receipt of written notice advising PCC that the Board
of Directors of the Company has received a Superior Proposal and that the
Company has elected to terminate the Merger Agreement.
Pursuant to the Merger Agreement, and in addition to the obligations of the
Company described above, the Company has agreed that (i) it will within 24 hours
advise PCC of its receipt of an Acquisition Proposal and the material terms and
conditions of such Acquisition Proposal, and (ii) prior to terminating the
Merger Agreement in connection with its entering into a definitive agreement
with respect to a Superior Proposal, it will pay, or cause to be paid, to PCC
the Liquidated Amount (as defined below).
The Merger Agreement does not prohibit the Company from making any
disclosure to the Company's stockholders if, in the opinion of the Board of
Directors of the Company, after consultation with counsel, failure to disclose
would be inconsistent with its fiduciary duties to the Company's stockholders
under applicable law, except that neither the Company nor its Board of Directors
nor any committee thereof may (other than as described above) withdraw or
modify, or propose to withdraw or modify, its position with respect to the Offer
or the Merger or approve or recommend, or propose to approve or recommend, an
Acquisition Proposal.
The term "Acquisition Proposal" means any proposed or actual (i)
acquisition, merger, consolidation or similar transaction involving the Company,
(ii) sale, lease or other disposition, directly or indirectly, by merger,
consolidation, share exchange or otherwise, of any assets of the Company or its
subsidiaries representing 15% or more of the consolidated assets of the Company
and its material subsidiaries, (iii) issue, sale or other disposition of
(including by way of merger, consolidation, share exchange or any similar
transaction) securities (or options, rights or warrants to purchase, or
securities convertible into such securities) representing 15% or more of the
votes associated with the outstanding securities of the Company, (iv)
transaction in which any person shall acquire beneficial ownership (as such term
is defined in Rule 13d-3 under the Exchange Act), or the right to acquire
beneficial ownership, or any "group" (as such term is defined under the Exchange
Act) shall have been formed which beneficially owns or has the right to acquire
beneficial ownership of, 15% or more of the outstanding Shares, (v)
recapitalization, restructuring, liquidation, dissolution, or other similar type
of transaction with respect to the Company or (vi) transaction which is similar
in form, substance or purpose to any of the foregoing transactions; provided,
however, that the term Acquisition Proposal shall not include the Offer, the
Merger and the transactions contemplated thereby. "Superior Proposal" means a
bona fide Acquisition Proposal to acquire two thirds or more of the Shares then
outstanding or all or substantially all of the assets of the Company and the
Company's material subsidiaries on terms which the Board of Directors of the
Company determines in its good faith judgment (after consultation with Goldman
Sachs & Co. or another financial advisor of nationally recognized reputation) to
be more favorable to the Company's stockholders than the Offer and the Merger.
20
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ACCESS. Pursuant to the Merger Agreement, from the date of the Merger
Agreement to the effectiveness of the Merger, the Company will provide, and
cause each material subsidiary to provide, to PCC and its officers, employees
and agents, complete access at all reasonable times to such officers, employees,
agents, properties, books, records and contracts, and will furnish PCC such
financial, operating and other data and information as PCC may reasonably
request.
DIRECTORS. The Merger Agreement provides that, upon the purchase of Shares
pursuant to the Offer, PCC will be entitled to designate a number of directors
(rounded up to the nearest whole number) on the Company's Board of Directors
that is equal to the product of the total number of directors on the Company's
Board multiplied by the percentage that the total votes represented by such
number of Shares in the election of directors of the Company so purchased bears
to the total votes represented by the number of Shares outstanding. The Company
has agreed to promptly, at the request of PCC, either increase the size of the
Company's Board of Directors and/or exercise its commercially reasonable best
efforts to secure the resignations of such number of its current directors as is
necessary to enable PCC's designees to be elected to the Company's Board of
Directors as provided above.
CONDITIONS TO MERGER. The respective obligations of each party to the
Merger Agreement to effect the Merger are subject to the fulfillment or waiver,
where permissible, at or prior to the closing of the transactions contemplated
by the Merger Agreement, of each of the following conditions: (a) if required by
applicable law, the Merger Agreement and the transactions contemplated thereby,
shall have been approved and adopted by the affirmative vote of the stockholders
of the Company to the extent required by the MGL and the Articles of
Organization of the Company; (b) any waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated; (c) all necessary approvals, authorizations and
consents of any governmental or regulatory entity required to consummate the
Merger shall have been obtained and remain in full force and effect, and all
waiting periods relating to such approvals, authorizations and consents shall
have expired or been terminated; (d) no preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission nor any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority shall be in effect which would make the consummation of
the Merger illegal or otherwise restrict, prevent or prohibit the consummation
of any of the transactions contemplated by the Merger Agreement; and (e) PCC,
the Purchaser or their affiliates shall have purchased Shares pursuant to the
Offer.
TERMINATION. The Merger Agreement may be terminated at any time prior to
the effective time of the Merger, whether before or after stockholder approval
thereof (a) by mutual consent of PCC, Purchaser and the Company; (b) by either
PCC, the Purchaser or the Company if (A) any governmental entity has issued an
order, decree or ruling or taken any other action which permanently restrains,
enjoins or otherwise prohibits the acceptance for payment of, or payment for,
Shares pursuant to the Offer or the Merger, or (B) without any material breach
by the terminating party of its obligations under the Merger Agreement, PCC or
the Purchaser shall not have purchased Shares pursuant to the Offer on or prior
to the expiration of the Offer in accordance with its terms; (c) by the Company
(A) in connection with entering into a definitive agreement to effect a Superior
Proposal as permitted by the Merger Agreement, provided it has complied with the
notice and payment provisions of the Merger Agreement, or (B) if PCC or the
Purchaser has breached in any material respect any of their respective
representations, warranties, covenants or other agreements contained in the
Merger Agreement, which breach cannot be or has not been cured within 15 days
after the giving of written notice to PCC or the Purchaser, except for such
breaches which are not reasonably likely to affect adversely PCC's or the
Purchaser's ability to consummate the Offer or the Merger; (d) by PCC or the
Purchaser if, prior to the purchase of Shares pursuant to the Offer, (A) the
Company has breached any representation or warranty or failed to perform any
covenant or other agreement contained in the Merger Agreement, which breach or
failure to perform would give rise to the failure of a condition set forth in
Section 13 and cannot be cured or has not been cured within 15 days after the
giving of written notice to the Company, (B) the Board of Directors of the
21
<PAGE>
Company has withdrawn, modified or changed its recommendation or approval in
respect of the Merger Agreement or the Offer in a manner adverse to PCC, (C) the
Board of Directors of the Company has recommended any proposal other than by PCC
and the Purchaser in respect of an Acquisition Proposal, or (D) the Company has
exercised a right with respect to an Acquisition Proposal and has, directly or
through its representatives, continued discussions with any third party
concerning such Acquisition Proposal for more than 20 business days after the
date of receipt of such Acquisition Proposal.
In the event of the termination of the Merger Agreement, the Merger
Agreement shall forthwith become void and have no effect, without any liability
on the part of any party hereto or its affiliates, trustees, directors, officers
or stockholders except as described under "Fees and Expenses" below; provided,
however, that nothing in the Merger Agreement will relieve any party from
liability for any fraud or willful breach of the Merger Agreement.
FEES AND EXPENSES. The Merger Agreement provides that, except as provided
in the following paragraph, all fees and expenses incurred in connection with
the Offer, the Merger, the Merger Agreement and the transactions contemplated
thereby will be paid by the party incurring such fees or expenses, whether or
not the Offer or the Merger is consummated.
Under the Merger Agreement the Company will pay, or cause to be paid, to PCC
an amount in cash equal to $25,000,000 (the "Liquidated Amount") if the Company
terminates the Merger Agreement in connection with entering into a definitive
agreement to effect an Acquisition Proposal. In addition, the Merger Agreement
provides that the Company will pay, or cause to be paid, to PCC the Liquidated
Amount if certain actions by the Company would allow PCC or the Purchaser to
terminate the Merger Agreement and within nine months thereafter the Company
enters into a definitive agreement to consummate an acquisition pursuant to an
Acquisition Proposal.
AMENDMENT. The Merger Agreement may be amended by the parties thereto by an
instrument in writing signed on behalf of each of the parties thereto at any
time before or after any approval of the Merger Agreement by the stockholders of
the Company and the Purchaser, but in any event following authorization by the
Board of Directors of the Purchaser and the Company.
OPERATIONS FOLLOWING CONSUMMATION OF THE OFFER.
Following consummation of the Offer, the Company will be a wholly owned
subsidiary of PCC, but otherwise PCC has no definitive plans to make any
material changes in the business or operations of the Company. PCC intends to
continue to operate the Company under the name Wyman-Gordon Company. Based on
its review of the operations of the Company following consummation of the Offer,
PCC may make changes to the Company's assets, capitalization, organizational
structure and management.
APPRAISAL RIGHTS.
Holders of Shares do not have appraisal rights as a result of the Offer.
However, if the Merger is consummated, holders of Shares at the effective time
of the Merger may have certain rights pursuant to the provisions of Chapter
156B, Sections 85 and 86-98 of the MGL ("Appraisal Sections") to dissent and
demand appraisal of their Shares provided the merger is accomplished with the
vote of the Company's stockholders (see the heading "Merger" under this
section). For a Merger accomplished without a vote of the Company's stockholders
(see the heading "Merger" under this section), the minority shareholders may
have certain rights to dissent and demand appraisal of their Shares under
Chapter 156B, Section 82(e) of the MGL. Under the Appraisal Sections,
stockholders who have the right to dissent in either of the two situations
described above, and who comply with the applicable statutory procedures, will
be entitled to receive a judicial determination of the fair value of their
Shares (exclusive of any element of value arising from the accomplishment or
expectation of the proposed Merger) and to receive payment of such fair value in
cash, together with a fair rate of interest, if any. Any such judicial
determination of the fair value of Shares could be based upon factors other
than, or in addition to, the price per Share to be paid in the
22
<PAGE>
Merger or the market value of the Shares. The value so determined could be more
or less than the price per Share to be paid in the Merger. The foregoing summary
of the Appraisal Sections does not purport to be complete and is qualified in
its entirety by reference to the Appraisal Sections.
GOING PRIVATE TRANSACTIONS.
The SEC has adopted Rule 13e-3 under the Exchange Act which is applicable to
certain "going private" transactions and which may under certain circumstances
be applicable to the Merger. However, Rule 13e-3 would be inapplicable if (a)
the Shares are deregistered under the Exchange Act prior to the Merger or (b)
the Merger is consummated within one year after the purchase of the Shares
pursuant to the Offer and the Merger provided for stockholders to receive cash
for their Shares in an amount at least equal to the Offer Price. If applicable,
Rule 13e-3 requires, among other things, that certain financial information
concerning the fairness of the proposed transaction and the consideration
offered to minority stockholders in such transaction to be filed with the SEC
and disclosed to stockholders prior to the consummation of the Merger.
12. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, NYSE LISTING AND
EXCHANGE ACT REGISTRATION.
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and the number of stockholders, which
could adversely affect the liquidity and market value of the remaining Shares
held by the public.
Depending upon the number of Shares acquired pursuant to the Offer and the
Shares accumulated by other parties, it is possible that the Company's Common
Stock will no longer be eligible for listing on the NYSE. In that event, the
market for the Shares could be adversely affected.
The Company's Common Stock is registered under the Exchange Act.
Registration of the Company's Common Stock may be terminated upon application of
the Company to the SEC if the Company's Common Stock is not listed on a national
securities exchange and there are fewer than 300 holders of record of the
Company's Common Stock. The Company has informed the Purchaser that there were
approximately 7,000 beneficial owners of the Company's Common Stock as of May
17, 1999. The termination of the registration of the Company's Common Stock
under the Exchange Act would render inapplicable certain provisions of the
Exchange Act, including requirements that the Company furnish stockholders with
proxy materials regarding meetings of stockholders of the Company, the reporting
and short-swing profit liability provisions under Section 16 of the Exchange Act
and the requirements of Rule 13e-3 under the Exchange Act regarding "going
private" transactions.
The Shares are currently "margin securities" under the rules of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board"). Among
other things, this status has the effect of allowing lenders to extend credit to
stockholders who wish to use the Shares as collateral. Depending upon factors
similar to those relevant to NYSE eligibility, following the Offer the Shares
might no longer constitute "margin securities" for purposes of the Federal
Reserve Board's margin regulations, in which event Shares could no longer be
used as collateral for margin loans made by brokers.
The Purchaser currently intends to cause the Company to make an application
for termination of registration of the Shares under the Exchange Act after
consummation of the Merger, and may cause such an application to be filed prior
to the consummation of the Merger if a sufficient number of Shares are purchased
pursuant to the Offer. If registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities" or eligible for
listing on the NYSE.
23
<PAGE>
13. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer or the Merger Agreement and
subject to Rule 14e-1(c) under the Exchange Act, the Purchaser shall not be
required to accept for payment or pay for any Shares and may delay the
acceptance for payment of and payment for any Shares, (A) until any applicable
waiting period (and any extension thereof) under the HSR Act in respect of the
Offer shall have expired or been terminated, (B) if there shall not have been
validly tendered to the Purchaser pursuant to the Offer and not withdrawn
immediately prior to the Expiration Date, at least that number of Shares that,
when taken as a whole with all other Shares owned or acquired by the Purchaser
(whether pursuant to the Offer or otherwise), constitutes at least the Minimum
Condition, or (C) at any time on or after the date of the Merger Agreement, and
prior to the Expiration Date, any of the following conditions exist or shall
occur or remain in effect:
(a) any Governmental Entity (as defined in the Merger Agreement) shall
have issued an order, decree or ruling or taken any other action, including
instituting any legal proceeding, (which, order, decree, ruling or other
action the parties hereto shall use their commercially reasonable best
efforts to lift), which seeks to restrain, enjoin or otherwise prohibit or
significantly delay any of the Transactions (as defined in the Merger
Agreement);
(b) (i) any of the representations and warranties of the Company set
forth in the Merger Agreement which are qualified by materiality or a
Company Material Adverse Effect (as defined in the Merger Agreement) or
words of similar effect shall not have been, or cease to be, true and
correct (except to the extent such representations and warranties expressly
relate to a specific date, in which case such representations and warranties
shall not have been true and correct as of such date) or (ii) any of the
representations and warranties of the Company set forth in the Merger
Agreement which are not so qualified shall not have been, or cease to be,
true and correct in all material respects (except to the extent such
representations and warranties expressly relate to a specific date, in which
case such representations and warranties shall not have been true and
correct in all material respects as of such date);
(c) the Company shall not have performed all obligations required to be
performed by it under the Merger Agreement, including, without limitation,
the covenants contained in Article VI or VII thereof, except where any
failure to perform would, individually or in the aggregate, not reasonably
be expected to have a Company Material Adverse Effect or materially impair
or significantly delay the ability of the Purchaser to consummate the Offer;
(d) there shall have occurred after the date of the Merger Agreement any
change or effect concerning the Company or the Company Subsidiaries (as
defined in the Merger Agreement) which has had or would reasonably be
expected to have a material adverse effect on the business, operations or
condition (financial or otherwise) of the Company and the Company
Subsidiaries taken as a whole (other than any changes that are related to or
result from the announcement or pendency of the Offer and/or the Merger,
including disruptions to the Company's business or the Company Subsidiaries'
businesses, and their respective employees, customers and suppliers);
(e) the Merger Agreement shall have been terminated in accordance with
its terms;
(f) any consent, authorization, order or approval of (or filing or
registration with) any Governmental Entity or other third party required to
be made or obtained by the Company or any of the Company Subsidiaries or
affiliates in connection with the execution, delivery and performance of the
Agreement and the consummation of the Transactions shall not have been
obtained or made, except where the failure to have obtained or made any such
consent, authorization, order, approval, filing or registration, would not
have a Company Material Adverse Effect or would not reasonably be expected
to materially impair or significantly delay the ability of the Purchaser to
consummate the Offer; or
24
<PAGE>
(g) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for securities on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq Stock Market for a period in excess of
24 hours (excluding suspension or limitations resulting solely from physical
damage or interference with such exchanges not related to market
conditions), (ii) a declaration of a general banking moratorium or any
general suspension of payments in respect of banks in the United States
(whether or not mandatory), or (iii) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof.
The foregoing conditions (i) may be asserted by PCC or the Purchaser
regardless of the circumstances (including any action or inaction by PCC or the
Purchaser or any of their respective affiliates other than a material breach of
the Merger Agreement), and (ii) are for the sole benefit of PCC, the Purchaser
and their respective affiliates. The foregoing conditions may be waived by PCC,
in whole or in part, at any time and from time to time, in the sole discretion
of PCC. The foregoing conditions are material to the Offer. The failure by PCC
or the Purchaser at any time to exercise any of the foregoing rights will not be
deemed a waiver of any right and each right will be deemed an ongoing right
which may be asserted at any time and from time to time.
Should the Offer be terminated due to the foregoing conditions, all tendered
Shares not theretofore accepted for payment will promptly be returned to the
tendering stockholders.
14. CERTAIN LEGAL MATTERS.
Except as described below, the Purchaser is not aware of any approval or
other action by any federal, state or foreign governmental or administrative
agency that would be required for the acquisition of the Shares by the Purchaser
pursuant to this Offer. Should any approval or other action be required, it is
presently contemplated that such approval or action would be sought. However,
while there is no present intent to delay the purchase of the Shares tendered
pursuant to this Offer pending the outcome of any such matter, there can be no
assurance that any such approval or other action, if needed, could be obtained
without substantial delay or conditions, or at all. The Purchaser's obligation
under the Offer to accept for payment and pay for Shares is subject to certain
conditions, including conditions relating to the legal matters discussed in this
Section 14. See Section 13.
STATE TAKEOVER LAWS. Massachusetts has enacted a business combination
statute that, in general, prohibits any business combination between a widely
held Massachusetts corporation and an interested shareholder for three years
after that person becomes an interested (i.e., 5%) shareholder unless: (a) prior
to the date that person becomes an interested shareholder, the board of
directors of the corporation approved either the transaction that made the
acquiror an interested shareholder or the proposed business combination; (b)
upon consummation of the transaction that made the acquiror an interested
shareholder, the acquiror owns at least 90 percent of the voting stock,
excluding shares held by directors, officers and employee stock plans in which
employee participants do not have the right to determine confidentially whether
shares held by the plan will be tendered; or (c) at or subsequent to the time
the acquiror becomes an interested shareholder, the board of directors of the
corporation and holders of two-thirds of the shares of voting stock not held by
the interested shareholder approves the business combination. Massachusetts has
also enacted a control share acquisition statute that provides, in general, that
shares of a widely held Massachusetts corporation acquired in a control share
acquisition (as defined in the statute) will not have voting rights unless,
among other things, voting rights for such shares are approved by a vote of the
shareholders of the corporation, not including those holding such shares.
Excluded from the definition of "control share acquisition," is, among other
things, an acquisition by merger or tender offer pursuant to a merger agreement
to which the Massachusetts corporation is a party. Massachusetts has also
enacted a take-over bid statute that imposes certain procedural requirements and
prohibitions in connection with a take-over bid (as defined in the statute).
Because the Company's Board of Directors has approved the Offer, the
prohibitions of the foregoing statutes will not apply to the Merger.
25
<PAGE>
The Purchaser and PCC do not believe any of the statutes adopted by states
in which the Company conducts business by their terms apply to the Offer, and
except as described in this Offer to Purchase, the Purchaser has not complied
with any state takeover law. Pursuant to the Merger Agreement, if any state's
takeover law should become applicable to the Offer or the Merger, the Purchaser,
PCC and the Company has agreed to use their best efforts to take such actions as
are necessary so that the transactions contemplated by the Merger Agreement may
be consummated as promptly as practicable on the terms contemplated thereby and
otherwise to minimize the effects of any such statute on such transactions.
Should any government official or third party seek to apply any state takeover
law to the Offer other than those described in this Offer to Purchase, the
Purchaser will take such action as then appears desirable and currently
anticipate that it will contest the validity or applicability of such statute in
appropriate court proceedings.
If it is asserted that one or more state takeover laws other than those
described in this Offer to Purchase apply to the Offer and it is not determined
by all appropriate courts that such act or acts do not apply or are invalid as
applied to the Offer, the Purchaser might be required to file certain
information with, or receive approvals from, the relevant state authorities. In
addition, if enjoined, the Purchaser might be unable to accept for payment any
Shares tendered pursuant to the Offer, or be delayed in consummating the Offer.
In such case, the Purchaser may not be obligated to accept for payment any
Shares tendered. See Section 13.
ANTITRUST LAWS. The Antitrust Division and the FTC frequently scrutinize
the legality under the antitrust laws of transactions such as the proposed
acquisition of the Company by the Purchaser. At any time before or after the
Purchaser's acquisition of Shares pursuant to the Offer, 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 purchase of
Shares pursuant to the Offer or the consummation of the proposed Merger or
seeking the divestiture of Shares acquired by the Purchaser or the divestiture
of substantial assets of the Company or its subsidiaries or PCC or its
subsidiaries. Private parties may also bring legal action under the antitrust
laws under certain circumstances. There can be no assurance that a challenge to
the Offer on antitrust grounds will not be made or, if such a challenge is made,
of the result thereof.
15. FEES AND EXPENSES.
Schroder & Co. Inc. is acting as Dealer Manager in connection with the
Offer. The Purchaser will pay the Dealer Manager reasonable and customary
compensation for its services in connection with the Offer. In addition, Parent
and the Purchaser have agreed to reimburse the Dealer Manager for its
out-of-pocket expenses, including the reasonable fees and expenses of its
counsel, in connection with the Offer and to indemnify the Dealer Manager and
certain related persons against certain liabilities and expenses, including
certain liabilities under the federal securities laws.
The Purchaser has retained The Bank of New York to act as Depositary and
D.F. King & Co., Inc. to serve as Information Agent in connection with the
Offer. The Purchaser will pay each of the Depositary and the Information Agent
reasonable and customary compensation for their services in connection with the
Offer, plus reimbursement for out-of-pocket expenses, and will indemnify each of
them against certain liabilities and expenses in connection therewith, including
certain liabilities under the federal securities laws.
Neither the Purchaser nor PCC will pay any fees or commissions to any broker
or dealer or other person (other than the Dealer Manager and the Information
Agent) in connection with the solicitation of tenders of Shares pursuant to the
Offer. Brokers, dealers, commercial 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.
26
<PAGE>
16. MISCELLANEOUS.
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. However, the Purchaser may, in its sole discretion, take such
action as it may deem necessary to make the Offer in any such jurisdiction and
extend the Offer to holders of Shares in such jurisdiction.
Neither the Purchaser nor PCC is aware of any jurisdiction in which the
making of the Offer or the acceptance of Shares in connection therewith would
not be in compliance with the laws of such jurisdiction. Consequently, the Offer
is currently being made to all holders of Shares. To the extent the Purchaser or
PCC becomes aware of any law that would limit the class of offers in the Offer,
the Purchaser will amend the Offer and, depending on the timing of such
amendment, if any, will extend the Offer to provide adequate dissemination of
such information to holders of Shares prior to the expiration of the Offer.
The Purchaser has filed with the SEC a Statement on Schedule 14D-1
(including exhibits) pursuant to Rule 14d-3 under the Exchange Act, furnishing
certain additional information with respect to the Offer, and may file
amendments thereto. Such Schedule 14D-1 and any amendments thereto, including
exhibits, may be examined and copies may be obtained from the principal office
of the SEC in Washington, D.C. and the NYSE in the manner set forth in Section
8.
No person has been authorized to give any information or make any
representation on behalf of the Purchaser not contained in this Offer to
Purchase or in the Letter of Transmittal and, if given or made, such information
or representation must not be relied upon as having been authorized.
May 21, 1999
WGC ACQUISITION CORP.
27
<PAGE>
SCHEDULE I
DIRECTORS AND CORPORATE OFFICERS
OF THE PURCHASER AND PCC
(Note: footnote (+) appears at end of this Schedule I)
Set forth in the table below are the names and present principal occupations
or employments, and the material occupations, positions, offices, and
employments during the past five years, for the directors and corporate officers
of WGC Acquisition Corp. and Precision Castparts Corp., and the name, principal
business and address for any corporation or other organization in which such
employment is carried on. Each person listed below is of United States
citizenship (except for Mr. Waite, who is a British citizen), and, unless
otherwise indicated, positions have been held for the past five years. Directors
are identified by an asterisk (*) and the year in which such person became a
director is indicated in parentheses.
PRECISION CASTPARTS CORP.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME AND RESIDENCE (AND PRINCIPAL BUSINESS); MATERIAL POSITIONS
OR BUSINESS ADDRESS HELD DURING PAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
William C. McCormick* (1986) ............. Chairman of PCC since October 1994; Chief Executive Officer of PCC
Precision Castparts Corp. since August 1991
4650 SW Macadam, Suite 440
Portland, OR 97201
Vernon E. Oechsle* (1996) ................ President and Chief Executive Officer of Quanex Corporation, a
Precision Castparts Corp.+ manufacturer of steel bars, aluminum shapes and steel tubes and
pipes, since 1995; formerly Chief Operating Officer of Quanex
Corporation
Peter R. Bridenbaugh* (1995) ............. Retired; through December 1997, Executive Vice President--
Precision Castparts Corp.+ Automotive, Aluminum Co. of America, an integrated producer of
aluminum and other products for the packaging, aerospace, automotive,
building and construction, and commercial and industrial markets;
from 1994-1996, Executive Vice President and Chief Technical Officer,
Aluminum Co. of America
Steven G. Rothmeier* (1994) .............. Chairman and Chief Executive Officer of Great Northern Capital, a
Precision Castparts Corp.+ private investment and merchant banking firm
Dean T. DuCray* (1996) ................... Retired; until April 1998, Vice President and Chief Financial Officer
Precision Castparts Corp.+ of York International Corporation, a manufacturer of heating, air
conditioning, ventilation and refrigeration equipment
Don R. Graber* (1995) .................... President and Chief Executive Officer of Huffy Corporation, a
Precision Castparts Corp.+ manufacturer of outdoor leisure equipment and provider of retail
services, since December 1997; from 1996 to 1997, President and Chief
Operating Officer of Huffy Corporation; previously, President of
Worldwide Household Products Group, The Black & Decker Corporation;
from 1992 to 1994, President of Black & Decker International Group
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME AND RESIDENCE (AND PRINCIPAL BUSINESS); MATERIAL POSITIONS
OR BUSINESS ADDRESS HELD DURING PAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Roy M. Marvin* (1967) .................... Retired; through May 1996, Vice President-Administration and
Precision Castparts Corp.+ Secretary of PCC
William D. Larsson ....................... Vice President and Chief Financial Officer of PCC
Precision Castparts Corp.+
Peter G. Waite ........................... Executive Vice President of PCC and President of PCC Airfoils, Inc.
Precision Castparts Corp.+
Mark Donegan ............................. Executive Vice President of PCC and President of PCC Structurals,
Precision Castparts Corp.+ Inc.
David W. Norris .......................... Executive Vice President of PCC and President of PCC Flow
Precision Castparts Corp.+ Technologies, Inc. since 1996; from 1991-1996, President of Keystone
Controls (North America) Division of Keystone International, Inc.
Gregory M. Delaney ....................... Executive Vice President of PCC and President of PCC Specialty
Precision Castparts Corp.+ Products, Inc. since 1998; from 1997-1998, President of Wygand
Industrial Division of Emerson Electric Company; from 1996-1997,
Executive Vice President of Sales, Marketing and Engineering, Wygand
Industrial Division of Emerson Electric Company; from 1995-1996, Vice
President of Marketing, Refrigerator Division of Copeland
Corporation, a subsidiary of Emerson Electric Company
James A. Johnson ......................... Treasurer of PCC
Precision Castparts Corp.+
Shawn R. Hagel ........................... Corporate Controller of PCC since 1997; from 1995-1997, Manager of
Precision Castparts Corp.+ Financial Reporting of PCC; from 1993-1995, Manager, Deloitte &
Touche LLP
Mark R. Roskopf .......................... Director of Taxes of PCC since 1999; from 1997-1999, Director of
Precision Castparts Corp.+ International Tax, Case Corporation; from 1993-1997, Manager of Tax
Reporting, Case Corporation
</TABLE>
WGC ACQUISITION CORP.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME AND RESIDENCE (AND PRINCIPAL BUSINESS); MATERIAL POSITIONS
OR BUSINESS ADDRESS HELD DURING PAST FIVE YEARS
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
William C. McCormick* .................... Chairman of PCC since October 1994; Chief Executive Officer of PCC
WGC Acquisition Corp. since August 1991; Chief Executive Officer of the Purchaser
4650 SW Macadam, Suite 440 Portland, OR
97201
William D. Larsson* ...................... Vice President and Chief Financial Officer of PCC; Vice President and
WGC Acquisition Corp.+ Treasurer of the Purchaser
</TABLE>
- ------------------------
+ The principal business and address of the corporation or other organization
for which the listed individual's principal occupation is conducted is set
forth at the first place at which the name of such corporation or other
organization appears in this SCHEDULE I.
S-2
<PAGE>
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE TRANSMISSION: BY HAND OR OVERNIGHT
TENDER & EXCHANGE DEPARTMENT (FOR ELIGIBLE INSTITUTIONS COURIER:
THE BANK OF NEW YORK ONLY) TENDER & EXCHANGE DEPARTMENT
PO BOX 11248 (212) 815-6213 101 BARCLAY STREET
CHURCH STREET STATION FOR INFORMATION TELEPHONE: RECEIVE AND DELIVER WINDOW
NEW YORK, NEW YORK (800) 507-9357 NEW YORK, NEW YORK 10286
10286-1248
</TABLE>
DELIVERY OF THE LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TO A NUMBER OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
Questions or requests for assistance may be directed to the Dealer Manager
or the Information Agent at their respective addresses and telephone numbers set
forth below. Additional copies of this Offer to Purchase, the Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent and the Dealer Manager as set forth below, and will be
furnished promptly at the Purchaser's expense. Stockholders may also contact
their brokers, dealers, commercial banks or trust companies or other nominees
for assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 769-4414
THE DEALER MANAGER FOR THE OFFER IS:
SCHRODER & CO. INC.
The Equitable Center
787 Seventh Avenue
New York, New York 10019-6016
(212) 492-6000 (Call Collect)
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
WYMAN-GORDON COMPANY
PURSUANT TO THE OFFER TO PURCHASE DATED MAY 21, 1999
BY
WGC ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
PRECISION CASTPARTS CORP.
---------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, EASTERN TIME, ON FRIDAY, JUNE 18, 1999
UNLESS THE OFFER IS EXTENDED
THE DEPOSITARY FOR THE OFFER IS:
The Bank of New York
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE: BY HAND OR OVERNIGHT COURIER:
Tender & Exchange Department (For Eligible Institutions Only) Tender & Exchange Department
PO Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station For Information Telephone Receive and Deliver Window
New York, New York 10286-1248 (800) 507-9357 New York, New York 10286
</TABLE>
Your bank or broker can assist you in completing this Letter of Transmittal.
The instructions enclosed with this Letter of Transmittal must be followed and
should be read carefully. Questions and requests for additional copies of the
Offer to Purchase (as defined below) and this Letter of Transmittal may be
directed to the Information Agent as indicated in Instruction 8.
Delivery of this Letter of Transmittal to an address other than as set forth
above, or transmission of instructions via facsimile transmission or telex
number other than as set forth above, will not constitute valid delivery.
This Letter of Transmittal is to be completed by stockholders if
certificates for Shares (as defined below) are to be forwarded herewith or if
tenders of Shares are to be made by book-entry transfer into the account of The
Bank of New York as Depositary (the "Depositary") at The Depository Trust
Company (the "Book-Entry Transfer Facility") pursuant to the procedures set
forth in Section 3 of the Offer to Purchase. Stockholders who tender Shares by
book-entry transfer are referred to herein as "Book-Entry Stockholders." Holders
of Shares whose certificates for such Shares (the "Share Certificates") are not
immediately available or who cannot deliver their Share Certificates and all
other required documents to the Depositary prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase), or who cannot complete the
procedure for book-entry transfer on a timely basis, must tender their Shares
according to the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
--------------------------------------------------------------------------------------------------
NAME(S) & ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) AND SHARE(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS TENDERED (ATTACH ADDITIONAL
NAME(S) APPEAR(S) ON CERTIFICATE(S)) SIGNED LIST IF NECESSARY)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHARE TOTAL NUMBER NUMBER
CERTIFICATE(S) OF SHARES OF SHARES
NUMBER(S)* REPRESENTED BY TENDERED**
CERTIFICATE(S)*
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
TOTAL SHARES
<CAPTION>
- ----------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, all Shares represented by certificates delivered
to the Depositary will be deemed to have been tendered. See Instruction 4.
<PAGE>
/ / CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO THE
ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER
FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution ______________________________________________
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s) ____________________________________________
Window Ticket Number (if any) ______________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution which Guaranteed Delivery ______________________________
If delivered by book-entry transfer:
Book-Entry Transfer Facility Account Number: _______________________________
Transaction Code Number: ___________________________________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
2
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to WGC Acquisition Corp., a Massachusetts
corporation, (the "Purchaser"), the above-described shares of common stock,
$1.00 par value (the "Shares"), of Wyman-Gordon Company, a Massachusetts
corporation (the "Company"), at a purchase price of $20.00 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated May 21, 1999 and any amendments or supplements thereto
(the "Offer to Purchase"), and in this Letter of Transmittal (which together
constitute the "Offer"), receipt of which is hereby acknowledged. The
undersigned understands that the Purchaser reserves the right, with the written
consent of the Company, to transfer or assign, in whole or from time to time in
part, the right to purchase all or any portion of the Shares tendered pursuant
to the Offer.
Subject to, and effective upon, acceptance for payment for the Shares
tendered herewith in accordance with the terms and conditions of the Offer, the
undersigned hereby sells, assigns and transfers to, or upon the order of, the
Purchaser all right, title and interest in and to all of the Shares that are
being tendered hereby and any and all noncash dividends, distributions
(including additional Shares) or rights declared, paid or issued with respect to
the tendered Shares on or after May 17, 1999 and payable or distributable to the
undersigned on a date prior to the transfer to the name of the Purchaser or a
nominee or transferee of the Purchaser on the Company's stock transfer records
of the Shares tendered herewith (a "Distribution"). The undersigned hereby
appoints the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares (and any Distribution) with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest) to (a) deliver such Share Certificates (as defined
herein) (and any Distribution) or transfer ownership of such Shares (and any
Distribution) on the account books maintained by the Book-Entry Transfer
Facility, together in either case with appropriate evidence of transfer and
authenticity, to the Depositary for the account of the Purchaser, (b) present
such Shares (and any Distribution) for transfer on the books of the Company, and
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares (and any Distribution), all in accordance with the terms and
subject to the conditions of the Offer.
The undersigned irrevocably appoints designees of the Purchaser as such
stockholder's proxy, each with full power of substitution to the full extent of
such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
Distribution. Such appointment will be effective when, and only to the extent
that, the Purchaser accepts such Shares for payment. Upon such acceptance for
payment, all prior proxies given by such stockholder with respect to such Shares
(and, if applicable, such other shares and securities) will be revoked without
further action, and no subsequent proxies may be given nor any subsequent
written consents executed (and if given or executed, will not be deemed
effective). The designees of the Purchaser will be empowered to exercise all
voting and other rights of such stockholder as they in their sole discretion may
deem proper at any annual or special meeting of the Company's stockholders or
any adjournment or postponement thereof, by written consent in lieu of any such
meeting or otherwise. The Purchaser reserves the right to require that, in order
for Shares to be deemed validly tendered, immediately upon the Purchaser's
payment for such Shares, the Purchaser must be able to exercise full voting
rights with respect to such Shares.
The undersigned hereby represents and warrants that (a) the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any Distribution) and (b) when the Shares are accepted for
payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title to such Shares (and any Distribution), free and clear of all
liens, restrictions, charges and encumbrances, and the same will not be subject
to any adverse claim. The undersigned, upon request, will execute and deliver
any additional documents deemed by the Depositary or the Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby (and any Distribution). In addition, the undersigned
shall promptly remit and transfer to the Depositary for the account of the
Purchaser any and all Distributions in respect of the Shares tendered hereby,
accompanied by appropriate documentation of transfer, and pending such
remittance or appropriate assurance thereof, the Purchaser will be, subject to
applicable law, entitled to all rights and privileges as owner of such
Distribution and 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 herein conferred or agreed to be conferred shall not be
affected by and shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, executors, administrators, successors and assigns of
the undersigned.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment by the
3
<PAGE>
Purchaser pursuant to the Offer, may also be withdrawn at any time after July
19, 1999. See Section 4 of the Offer to Purchase.
The undersigned understands that tenders of Shares pursuant to any of the
procedures described in Section 3 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 set forth in the
Offer, including the undersigned's representations that the undersigned owns the
Shares being tendered.
Unless otherwise indicated herein under "Special Payment Instructions,"
please mail the check for the purchase price and/or issue or return any
certificate(s) for Shares not tendered or not accepted for payment (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing under "Description of Shares Tendered." In the event that
both the Special Delivery Instructions and Special Payment Instructions are
completed, please issue the check for the purchase price and/or issue or return
any certificate(s) for Shares not tendered or accepted for payment in the name
of, and deliver such check and/or such certificate to, the person or persons so
indicated.
The undersigned recognizes that the Purchaser has no obligation, pursuant to
the Special Payment Instructions, to transfer any Shares from the name(s) 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
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be issued in the name of someone other than the
undersigned
Issue / / check / / certificate(s) to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(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
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be mailed to someone other than the undersigned,
or to the undersigned at an address other than that shown above.
Issue / / check / / certificate(s) to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
- -----------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
AND COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN
____________________________________________________________________________
____________________________________________________________________________
(SIGNATURE(S) OF HOLDER(S))
Dated: _______________________________________________________________, 1999
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
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 a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or another acting in a fiduciary
or representative capacity, please set forth full title and see Instruction
5.)
Name(s) ____________________________________________________________________
____________________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity (full title) ______________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _____________________________________________
Tax Identification or Social Security No. __________________________________
COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature _______________________________________________________
Name _______________________________________________________________________
(PLEASE TYPE OR PRINT)
Title ______________________________________________________________________
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
Dated: _______________________________________________________________, 1999
- --------------------------------------------------------------------------------
5
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder(s) of Shares (which term, for purposes of this document, shall
include any participant in the Book-Entry Transfer Facility whose name appears
on a security position listing as the owner of Share(s)), unless such holder has
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" included herein or (ii) if such Shares
are tendered for the account of a firm which is a member of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc. or by a commercial bank or trust company having an office or
correspondent in the United States (each of the foregoing being referred to as
an "Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be completed either if certificates are to be forwarded
herewith or if tenders are to be made pursuant to the procedure for tender by
book-entry transfer set forth in Section 3 of the Offer to Purchase. Share
Certificates, or timely confirmation (a "Book-Entry Confirmation") of a
book-entry transfer of such Shares into the Depositary's account at the
Book-Entry Transfer Facility, as well as this Letter of Transmittal (or a
facsimile hereof), properly completed and duly executed, with any required
signature guarantees and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth herein prior to the Expiration Date. Stockholders whose Share Certificates
are not immediately available, or who cannot deliver their Share Certificates
and all other required documents to the Depositary prior to the Expiration Date,
or who cannot complete the procedure for delivery by book-entry transfer on a
timely basis, may tender their Shares by properly completing and duly executing
a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure
set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i)
such tender must be made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form made available by the Purchaser (with any required signature guarantees)
must be received by the Depositary prior to the Expiration Date; and (iii) the
Share Certificates (or a Book-Entry Confirmation) representing all tendered
Shares, in proper form for transfer, in each case together with the Letter of
Transmittal (or a facsimile hereof), properly completed and duly executed, with
any required signature guarantees and any other documents required by this
Letter of Transmittal, must be received by the Depositary within three New York
Stock Exchange trading days after the date of execution of such Notice of
Guaranteed Delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. 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 stockholders, by execution of
this Letter of Transmittal (or a facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space herein is inadequate, the certificate
numbers and/or the number of Shares should be listed on a separate signed
schedule attached hereto.
4. PARTIAL TENDERS. (NOT APPLICABLE TO BOOK-ENTRY-STOCKHOLDERS.) If fewer
than all the Shares evidenced by any Share 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 cases, new Share Certificates for
the Shares that were evidenced by your old Share Certificates, but were not
tendered by you, will be sent to you, unless otherwise provided in the
appropriate box on this Letter of Transmittal, as soon as practicable after the
purchase of Shares pursuant to the Offer. All Shares represented by Share
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 without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
6
<PAGE>
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, attorney-in-fact, officer of a corporation
or another acting in a fiduciary or representative capacity, such person should
so indicate when signing, and proper evidence satisfactory to the Purchaser of
such person's authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment of the purchase price for
Shares is to be made to or certificates for Shares not tendered or purchased are
to be issued in the name of a person other than the registered holder(s).
Signatures on such certificates or stock powers must then be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, the certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the certificate(s).
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. STOCK TRANSFER TAXES. Except as provided in this Instruction 6, the
Purchaser will pay any stock transfer taxes with respect to the transfer and
sale of the purchased Shares pursuant to the Offer. If, however, payment of the
purchase price is to be made to, or (in the circumstances permitted hereby and
if applicable) if certificates for Shares not tendered or purchased are to be
registered in the name of, any person other than the registered holder, 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 stock transfer taxes
(whether imposed on the registered holder or such person) payable on account of
the transfer to such person will be deducted from the purchase price if
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
not submitted. Except as provided in this Instruction 6, it will not be
necessary for transfer tax stamps to be affixed to the certificate(s) listed in
this Letter of Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares not tendered or not accepted for
payment are to be issued or returned to, a person other than the signer of this
Letter of Transmittal, or if a check and/or such certificates are to be mailed
to a person other than the signer of this Letter of Transmittal or to an address
other than that shown in this Letter of Transmittal, the appropriate boxes on
this Letter of Transmittal should be completed.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests for
assistance may be directed to the Information Agent at the address and telephone
numbers set forth below. Additional copies of the Offer to Purchase, this Letter
of Transmittal and the Notice of Guaranteed Delivery may also be obtained from
the Information Agent or brokers, dealers, commercial banks or trust companies.
9. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by the
Purchaser in whole or in part at any time and from time to time in its sole
discretion. See Section 13 of the Offer to Purchase.
10. SUBSTITUTE FORM W-9. The tendering stockholder generally is required
to provide the Depositary with a correct Taxpayer Identification Number ("TIN"),
generally the stockholder's social security or federal employer identification
number, on Substitute Form W-9 contained herein. Failure to provide the
information on the form may subject the tendering stockholder to 31% federal
income tax withholding on the payment of the purchase price for Shares. The box
in Part I of the Substitute Form W-9 may be checked if the stockholder has not
been issued a TIN and has applied for a number or intends to apply for a number
in the near future. If the box in Part I is checked and the Depositary is not
provided with a TIN within 60 days, the Depositary will thereafter withhold 31%
of any purchase price payment made for Shares before a TIN is provided to the
Depositary.
IMPORTANT TAX INFORMATION
Under federal income tax law, a tendering stockholder whose tendered shares
are accepted for purchase generally is required by law to provide the Depositary
(as payer) with such stockholder's correct TIN on Substitute Form W-9 contained
herein. If such stockholder is an individual, the TIN is such stockholder's
social security number. If the Depositary is not provided with the correct TIN,
the stockholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to any stockholder with respect to
Shares pursuant to the Offer may be subject to backup withholding.
7
<PAGE>
Certain stockholders (including, among others, corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign person to qualify as an exempt recipient,
that stockholder must submit a statement, signed under penalties of perjury,
attesting to that individual's exempt status. Such statements can be obtained
from the Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions. Other
exempt holders should furnish their TIN on Substitute W-9, write "Exempt" in
Part II of that form, and sign and date the Substitute Form W-9.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments of the purchase price for Shares,
each tendering stockholder generally is required to notify the Depositary of his
or her correct TIN by completing the Substitute Form W-9 contained herein,
certifying that the TIN provided on Substitute Form W-9 is correct (or that such
stockholder is awaiting a TIN).
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares. 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.
IMPORTANT: IF A SHAREHOLDER DESIRES TO ACCEPT THE OFFER, THIS LETTER OF
TRANSMITTAL (OR A FACSIMILE HEREOF), TOGETHER WITH CERTIFICATES OR CONFIRMATION
OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS, OR THE NOTICE OF
GUARANTEED DELIVERY, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION
DATE.
[SUBSTITUTE FORM W-9 FOLLOWS]
8
<PAGE>
PAYER'S NAME: THE BANK OF NEW YORK, AS DEPOSITARY AGENT
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------------
SUBSTITUTE PART I -- Taxpayer Identification Number (TIN)
FORM W-9 Please enter your correct number in the appropriate box below. NOTE:
Department of the If the account is more than one name, see the chart on the enclosed
Treasury, form, Guidelines for Certification of Taxpayer Identification Number
Internal Revenue Service on Substitute Form W-9, for guidance on which number to enter.
Payer's Request for Social Security Number Or Employer Identification Number
Taxpayer Identification -------------------- ----------------------------
Number and Certification If you do not have a TIN, see the instructions "How to Get a TIN" and
check the box below.
TIN Applied For / /
- --------------------------------------------------------------------------------------------------
PART II -- For Payees Exempt from Backup Withholding (see Guidelines
for Certification of Taxpayer Identification Number on Substitute Form
W-9)
- --------------------------------------------------------------------------------------------------
PART III CERTIFICATION -- Under 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: (a) I am exempt from backup withholding, or
(b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to
backup withholding as a result of a failure to report all interest and dividends, or (c) IRS
has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS. You must cross out Item (2) above if you have been notified by IRS
that you are currently subject to backup withholding because you have failed to report all
interest and dividends on your tax return.
Name
(Please Print) (if multiple holders or you have changed your name, see Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9.)
Signature ------------------------------------------------------------- Date
- -------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF
ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
9
<PAGE>
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 769-4414
THE DEALER MANAGER FOR THE OFFER IS:
SCHRODER & CO., INC.
The Equitable Center
787 Seventh Avenue
New York, New York 10019-6016
(212) 492-6000 (Call Collect)
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER NAME AND TAXPAYER 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.
You must enter your TIN in the appropriate box. If you are a resident alien
and you do not have and are not eligible to get an SSN, your TIN is your IRS
individual taxpayer identification number (ITIN). Enter it in the social
security number box. If you do not have an ITIN, see HOW TO GET A TIN below.
If you are a sole proprietor and you have an EIN, you may enter either your
SSN or EIN. However, using your EIN may result in unnecessary notices to the
requester.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
<C> <S> <C>
GIVE THE NAME AND
SOCIAL SECURITY
FOR THIS TYPE OF RECORD HOLDER NUMBER OF--
<CAPTION>
- -----------------------------------------------------------------------
<C> <S> <C>
1. Individual The individual (1)
2. Two or more individuals (joint The actual owner of the
account) account or, if combined funds,
the first individual on the
account (2)
3. Custodian account of a minor The minor (3)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-trustee (2)
trust (grantor) is also
trustee
b. So-called trust account The actual owner (2)
that is not a legal or
valid trust under state law
5. Sole proprietorship The owner (4)
- -----------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------
GIVE THE NAME AND EMPLOYER
FOR THIS TYPE OF RECORD HOLDER IDENTIFICATION NUMBER OF--
- -----------------------------------------------------------------------
<C> <S> <C>
6. Sole Proprietorship The owner (4)
7. A valid trust, estate, or Legal entity (5)
pension trust
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational, or
other tax-exempt organization
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. 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) If you have changed your last name, for instance due to marriage, without
notifying the Social Security Administration, enter your first name, the
last name shown on your social security card, and your new last name.
(2) List above the signature line and circle the name of the person whose number
you furnish. Note: If the first payee or a joint account furnishes the payer
with a certificate of foreign status, the payer is required to withhold
unless each other joint payee furnishes either a certificate of foreign
status or a Substitute Form W-9.
(3) List minor's name and furnish the minor's social security number.
(4) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use your social security number or
employer identification number.
(5) List the name of the legal trust, estate, or pension trust. (Do not furnish
the TIN of the personal representative or trustee unless the legal entity
itself is not designated in the account title).
NOTE: If no name above the signature line is listed when more than one name
appears in the registration, the number will be considered to be that of
the first name appearing in the registration.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
(Section references are to the Internal Revenue Code.)
PURPOSE OF FORM.--A person who is required to file an information return with
the IRS must get your correct Taxpayer Identification Number ("TIN") to report,
for example, income paid to you, real estate transactions, mortgage interest you
paid, the acquisition or abandonment of secured property, cancellation of debt,
or contributions you made to an IRA. Use Form W-9 to give your correct TIN to
the requester (the person requesting your TIN) and, when applicable, (1) to
certify the TIN you are giving is correct (or you are waiting for a number to be
issued), (2) to certify you are not subject to backup withholding, or (3) to
claim exemption from backup withholding if you are an exempt payee.
NOTE: If a requester gives you a form other than a W-9 to request your TIN, you
must use the requester's form if it is substantially similar to Form W-9.
WHAT IS BACKUP WITHHOLDING?--Persons making certain payments to you must
withhold and pay to the IRS 31% of such payments under certain conditions. This
is called "backup withholding." Payments that could be subject to backup
withholding include interest, dividends, broker and barter exchange
transactions, rents, royalties, nonemployee pay, and certain payments from
fishing boat operators. Real estate transactions are not subject to backup
withholding.
If you give the requester your correct TIN, make the proper certifications,
and report all your taxable interest and dividends on your tax return, payments
you receive will not be subject to backup withholding. Payments you receive WILL
be subject to backup withholding if:
1. You do not furnish your TIN to the requester, or
2. The IRS tells the requester that you furnished an incorrect TIN, or
3. The IRS tells you that you are subject to backup withholding because you
did not report all your interest and dividends on your tax return (for
reportable interest and dividends only), or
4. You do not certify to the requester that you are not subject to backup
withholding under 3 above (for reportable interest and dividend accounts opened
after 1983 only), or
5. You do not certify your TIN.
Certain payees and payments are exempt from backup withholding and
information reporting. See below.
HOW TO GET A TIN: If you do not have a TIN, apply for one immediately. To apply
for an SSN, get Form SS-5 from your local Social Security Administration office.
Get Form W-7 to apply for an ITIN or Form SS-4 to apply for an EIN. You can get
Forms W-7 and SS-4 from the IRS by calling 1-800-TAX-FORM (1-800-829-3676).
If you do not have a TIN, check the box titled "Applied For" in the space
for the TIN, sign and date the form, and give it to the requester. Generally,
you will then have 60 days to get a TIN and give it to the requester. If the
requester does not receive your TIN within 60 days, backup withholding, if
applicable, will begin and continue until you furnish your TIN.
NOTE: CHECKING THE BOX TITLED "APPLIED FOR" ON THE FORM MEANS THAT YOU HAVE
ALREADY APPLIED FOR A TIN OR THAT YOU INTEND TO APPLY FOR ONE SOON.
As soon as you receive your TIN, complete another Form W-9, include your
TIN, sign and date the form, and give it to the requester.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Individuals (including sole proprietors) are NOT exempt from backup withholding.
Corporations are exempt from backup withholding for certain payments, such as
interest and dividends.
If you are exempt from backup withholding, you should still complete this
form to avoid possible erroneous backup withholding. Enter your correct TIN in
Part I, write "Exempt" in Part II, and sign and date the form. If you are a
nonresident alien or a foreign entity not subject to backup withholding, give
the requester a completed FORM W-8, Certificate of Foreign Status.
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 the payee listed in item (9). For broker
transactions, payees listed in (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). However, a corporation (other than certain hospitals or extended care
facilities) 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 and patronage dividends.
(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) if the account
satisfies the requirements of section 401(f)(2). (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, the District of Columbia 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 that generally are exempt from
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
- Payments of patronage dividends not paid in money.
- Payments made by certain foreign organizations.
- Section 404(k) payments made by an ESOP.
Payments of interest that generally are exempt from 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 TIN to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid to you.
Payments that are not subject to information reporting also are not subject to
backup withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045,
6049, 6050A, and 6050N, and their regulations.
PRIVACY ACT NOTICE.--Section 6109 requires you to give your correct TIN to
persons who must file information returns with the IRS to report interest,
dividends, and certain other income paid to you, mortgage interest you paid, the
acquisition or abandonment of secured property, cancellation of debt, or
contributions you made to an IRA. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. The IRS may also
provide this information to the Department of Justice for civil and criminal
litigation and to cities, states, and the District of Columbia to carry out
their tax laws.
You must provide your TIN whether or not you are required to file a tax
return. Payers must generally withhold 31% of taxable interest, dividend, and
certain other payments to a payee who does not give a TIN to a payer. Certain
penalties may also apply.
PENALTIES
(1) FAILURE TO FURNISH TIN.--If you fail to furnish your TIN to a requester, 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 that results in no 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.
(4) MISUSE OF TINS.--If the requester discloses or uses TINs in violation of
Federal law, the requester may be subject to civil and criminal penalties.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
<PAGE>
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN
OFFER TO SELL SHARES. THE OFFER IS BEING MADE SOLELY BY THE OFFER TO
PURCHASE DATED MAY 21, 1999 AND THE RELATED LETTER OF TRANSMITTAL, AND ANY
AMENDMENTS AND SUPPLEMENTS THERETO, AND IS NOT BEING MADE TO, NOR WILL
TENDERS BE ACCEPTED FROM OR ON BEHALF OF, HOLDERS OF SHARES TENDERING IN ANY
JURISDICTION IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD
NOT BE IN COMPLIANCE WITH THE SECURITIES, BLUE SKY OR OTHER LAWS OF SUCH
JURISDICTIONS.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
WYMAN-GORDON COMPANY
AT
$20.00 NET PER SHARE
BY
WGC ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
PRECISION CASTPARTS CORP.
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS
WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON FRIDAY, JUNE 18, 1999 UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
WGC Acquisition Corp., a Massachusetts corporation (the "Purchaser"),
which is a wholly owned subsidiary of Precision Castparts Corp., an Oregon
corporation ("PCC"), is offering to purchase all of the outstanding shares of
Common Stock, $1.00 par value (the "Shares"), of Wyman-Gordon Company, a
Massachusetts corporation (the "Company"), at a purchase price of $20.00 per
Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated May 21, 1999 (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 IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS
<PAGE>
DEFINED BELOW), THAT NUMBER OF SHARES THAT WOULD REPRESENT 66 2/3 PERCENT OF
ALL OUTSTANDING SHARES DETERMINED ON A FULLY DILUTED BASIS ON THE DATE OF
PURCHASE. CERTAIN OTHER CONDITIONS TO THE OFFER ARE DESCRIBED IN SECTION 13
OF THE OFFER TO PURCHASE.
The Offer is being made pursuant to an Agreement and Plan of Merger
dated May 17, 1999 (the "Merger Agreement") by and among PCC, the Purchaser
and the Company pursuant to which, after the expiration of the Offer and the
satisfaction of the conditions contained in the Merger Agreement, the
Purchaser will be merged into the Company (the "Merger") and each outstanding
Share, other than Shares held by the Purchaser, PCC or any other subsidiary
of PCC and Shares held by stockholders who perfect any available appraisal
rights under Massachusetts law, would be converted into the right to receive
an amount in cash equal to the price per Share paid pursuant to the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT AND THE MAKING OF THE OFFER BY THE PURCHASER, AND HAS
DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE OFFER.
The term "Expiration Date" means 12:00 Midnight, Eastern time, on
Friday, June 18, 1999, unless and until the period during which the Offer is
open shall have been extended in accordance with the terms of the Merger
Agreement, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended, shall expire.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not withdrawn
as, if and when the Purchaser gives oral or written notice to The Bank of New
York, which is acting as the depositary (the "Depositary"), of the
Purchaser's acceptance for payment of such Shares pursuant to the Offer.
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 therefore with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payments from the
Purchaser and transmitting such payments to stockholders whose Shares have
been accepted for payment. Under no circumstances will interest on the
purchase price for tendered Shares be paid, regardless of any delay in making
the payment after the Expiration Date.
In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates representing such Shares (the "Share
Certificates"), or timely confirmation (a "Book-Entry Confirmation") of a
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in Section 3 of the Offer to Purchase, (ii) the Letter
of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees, and (iii) any other
documents required by the Letter of Transmittal.
If by 12:00 Midnight Eastern time, on June 18, 1999 (or any date and
time then set as the Expiration Date), any or all of the conditions to the
Offer have not been satisfied or waived, the
2
<PAGE>
Purchaser reserves the right (but shall not be obligated), subject to the
applicable rules and regulations of the Securities and Exchange Commission
("Commission") and subject to the limitations in the Merger Agreement, to (a)
terminate the Offer and not accept for payment or pay for any Shares and
return all tendered Shares to tendering stockholders, (b) waive all the
unsatisfied conditions and accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn, (c)
extend the Offer and, subject to the right of stockholders to withdraw Shares
until the Expiration Date, retain the Shares that have been tendered during
the period or periods for which the Offer is extended or (d) subject to the
limitations in the Merger Agreement, amend the Offer. See Section 11 of the
Offer to Purchase. Under no circumstances will interest be paid on the
purchase price for tendered Shares, whether or not the Purchaser exercises
its right to extend the Offer. Any extension, amendment or termination will
be followed as promptly as practicable by public announcement thereof, such
announcement to be no later than 9:00 a.m., Eastern time, on the next
business day after the previously scheduled Expiration Date of the Offer.
Except as described below and in Section 4 of the Offer to Purchase,
tenders of Shares made pursuant to the Offer are irrevocable. Shares
tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after July 19, 1999.
For withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary
at one of its addresses set forth on the back cover of the Offer to Purchase.
Any notice of withdrawal must specify the name of the person who tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name
of the registered holder, if different from that of the person who tendered
such Shares. If Share Certificates to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the physical release
of such Certificates, the serial number shown on such Certificates must be
submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in Section 3 of the
Offer to Purchase) unless such Shares have been tendered for the account of
any Eligible Institution. If Shares have been tendered pursuant to the
procedure for Book-Entry Transfer as set forth in Section 3 of the Offer to
Purchase, any notice of withdrawal must specify the name and number of the
account of the Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with the Book-Entry Transfer Facility's
procedures. All questions as to the form and validity (including the time of
receipt) of any notice of withdrawal will be determined by the Purchaser, in
its sole discretion, whose determination will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided the Purchaser with the Company's stockholder
list and security position listings for the purpose of disseminating the
Offer to holders of the Shares. The Offer to Purchase and the related Letter
of Transmittal are being mailed to the record holders of Shares whose names
appear on the Company's stockholder list and will be furnished to brokers,
dealers, commercial banks, trust companies and similar persons whose names,
or the names of whose nominees, appear on the stockholder list or, if
applicable, who are listed as participants in a
3
<PAGE>
clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH HOLDERS OF SHARES SHOULD READ BEFORE MAKING ANY
DECISION WITH RESPECT TO THE OFFER.
Questions and requests for copies of the Offer to Purchase and the
related Letter of Transmittal and all other tender offer materials may be
directed to the Information Agent as set forth below, and copies will be
furnished promptly at the Purchaser's expense. The Purchaser will not pay
any fees or commissions to any broker or dealer or any other person (other
than the Information Agent and the Dealer Manager) for soliciting tenders of
Shares pursuant to the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 769-4414
THE DEALER MANAGER FOR THE OFFER IS:
SCHRODER & CO., INC.
The Equitable Center
787 Seventh Avenue
New York, New York 10019-6016
(212) 492-6000 (Call Collect)
May 21, 1999
4
<PAGE>
NOTICE OF GUARANTEED DELIVERY
TO
TENDER SHARES OF COMMON STOCK
OF
WYMAN-GORDON COMPANY
AS SET FORTH IN SECTION 3 OF THE OFFER TO PURCHASE (AS DEFINED BELOW), THIS
INSTRUMENT OR ONE SUBSTANTIALLY EQUIVALENT HERETO MUST BE USED TO ACCEPT THE
OFFER (AS DEFINED BELOW) IF CERTIFICATES FOR SHARES (AS DEFINED BELOW) ARE NOT
IMMEDIATELY AVAILABLE OR THE CERTIFICATES FOR SHARES AND ALL OTHER REQUIRED
DOCUMENTS CANNOT BE DELIVERED TO THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN SECTION 1 OF THE OFFER TO PURCHASE) OR IF THE PROCEDURE FOR DELIVERY
BY BOOK-ENTRY TRANSFER CANNOT BE COMPLETED ON A TIMELY BASIS. THIS INSTRUMENT
MAY BE DELIVERED BY HAND OR TRANSMITTED BY TELEGRAM, TELEX, FACSIMILE
TRANSMISSION OR MAIL TO THE DEPOSITARY.
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
BY MAIL: FACSIMILE: BY HAND OR OVERNIGHT COURIER:
TENDER & EXCHANGE DEPARTMENT (FOR ELIGIBLE INSTITUTIONS TENDER & EXCHANGE DEPARTMENT
PO BOX 11248 ONLY) 101 BARCLAY STREET
CHURCH STREET STATION (212) 815-6213 RECEIVER AND DELIVER WINDOW
NEW YORK, NEW YORK 10286-1248 FOR INFORMATION TELEPHONE NEW YORK, NEW YORK 10286
(800) 507-9357
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OR TELEX NUMBER OTHER
THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE VALID DELIVERY.
Ladies and Gentlemen:
The undersigned hereby tenders to WGC Acquisition Corp., a Massachusetts
corporation (the "Purchaser"), upon the terms and subject to the conditions set
forth in the Offer to Purchase dated May 21, 1999 (the "Offer to Purchase") and
in the related Letter of Transmittal (which together constitute the "Offer"),
receipt of which is hereby acknowledged, the number of shares of common stock,
$1.00 par value (the "Shares"), indicated below of Wyman-Gordon Company, a
Massachusetts corporation, pursuant to the guaranteed delivery procedure set
forth in Section 3 of the Offer to Purchase.
<TABLE>
<S> <C>
Signature(s) Address (escrows)
- ---------------------------------- ----------------------------
Name(s)
- ----------------------------------- -----------------------------------
Zip Code
- ----------------------------------- Area Code and Tel. No(s).
Please Type or Print ---------------------
Number of Shares (Check one if Shares will be
- ---------------------------- tendered by book- entry transfer)
Certificate Nos. (If Available) / / The Depository Trust Company
- -----------------------------------
- -----------------------------------
Dated
- -----------------------------------
</TABLE>
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a member of a registered national securities
exchange or of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company having an office or correspondent in the United
States, guarantees delivery to the Depositary of either the certificates
evidencing all tendered Shares, in proper form for transfer, or delivery of
Shares pursuant to the procedure for book-entry transfer into the Depositary's
account at The Depository Trust Company (the "Book-Entry Transfer Facility"), in
either case together with the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees and
any other required documents, all within three (3) New York Stock Exchange
trading days after the date hereof.
<TABLE>
<S> <C>
- ----------------------------------- -----------------------------------
Name of Firm Authorized Signature
Name
- ----------------------------------- -----------------------------------
Address Please Type or Print
Title
- ----------------------------------- -----------------------------------
Zip Code Dated
Area Code and Tel. No. -----------------------------------
-----------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS FORM--CERTIFICATES ARE TO
BE DELIVERED WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
WYMAN-GORDON COMPANY
AT
$20.00 NET PER SHARE
BY
WGC ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
PRECISION CASTPARTS CORP.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON FRIDAY, JUNE 18, 1999 UNLESS THE OFFER IS EXTENDED.
May 21, 1999
To: Brokers, Dealers, Commercial Banks,
Trust, Companies and Other Nominees:
We have been appointed by WGC Acquisition Corp. (the "Purchaser"), a
Massachusetts corporation and a wholly-owned subsidiary of Precision Castparts
Corp., an Oregon corporation ("PCC"), to act as Dealer Manager in connection
with the Purchaser's offer to purchase for cash all of the outstanding shares of
Common Stock, $1.00 par value (the "Shares"), of Wyman-Gordon Company, a
Massachusetts corporation (the "Company"), for $20.00 per share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated May 21, 1999 (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
whose accounts you hold Shares in your name or in the name of your nominee.
Enclosed for your information and for forwarding to your clients are copies
of the following documents:
1. The Offer to Purchase dated May 21, 1999;
2. The Letter of Transmittal to be used in accepting the Offer.
Facsimile copies of the Letter of Transmittal may be used to accept the
Offer;
3. A printed form of letter which may be sent to your clients for whose
account you hold Shares in your name or in the name of your nominee, with
space provided for obtaining such client's instructions with regard to the
Offer;
4. A Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available or if the procedure
for book-entry transfer cannot be completed on a timely basis;
5. Letter from Wyman-Gordon Company with attached Schedule 14D-9
(without exhibits);
6. Guidelines of the Internal Revenue Service for certification of
Taxpayer Identification Number on Substitute Form W-9; and
7. Return envelope addressed to The Bank of New York.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON FRIDAY, JUNE 18, 1999 UNLESS THE
OFFER IS EXTENDED.
<PAGE>
Please note the following:
1. The tender price is $20.00 per Share, net to you in cash.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the Offer at
least 66 2/3 percent of the outstanding Shares (on a fully diluted basis).
4. The Board of Directors of the Company has approved the Offer and the
Merger (as defined in the Offer to Purchase) and determined that the Offer
and the Merger are fair to and in the best interests of the stockholders of
the Company and recommends that the stockholders of the Company accept the
Offer.
5. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON FRIDAY, JUNE 18, 1999, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, (1) a duly executed and properly
completed Letter of Transmittal, and, if necessary, any other required documents
should be sent to the Depositary and (2) either certificates representing the
tendered Shares should be delivered to the Depositary, or such Shares should be
tendered by book-entry transfer into the Depositary's account at one of the
book-entry transfer facilities (as defined in the Offer to Purchase), all in
accordance with the instructions set forth in the Letter of Transmittal and the
Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents to the Depositary prior
to the expiration of the Offer or to comply with the book-entry transfer
procedures on a timely basis, a tender may be effected by following the
guaranteed delivery procedures specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person (other than the Dealer Manager, the Depositary and the
Information Agent as described in the Offer to Purchase) for soliciting tenders
of Shares pursuant to the Offer. You will be reimbursed by the Purchaser for
customary mailing expenses incurred by you in forwarding any of the enclosed
materials to your clients. The Purchaser will pay or cause to be paid any stock
transfer taxes payable on the sale and transfer of Shares to it or its order,
except as otherwise provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
the Information Agent or the Dealer Manager at their respective addresses and
telephone numbers as set forth on the back cover page of the Offer to Purchase.
Additional copies of the above documents may be obtained from the
Information Agent or the Dealer Manager, at their respective addresses and
telephone numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
SCHRODER & CO. INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY PERSON THE AGENT OF THE PURCHASER, PCC, THE COMPANY OR THE DEPOSITARY, OR
AS AGENT OF ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON
TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO, OR USE ANY
DOCUMENT IN CONNECTION WITH, THE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN
THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL AND THE DOCUMENTS INCLUDED
HEREWITH.
2
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
WYMAN-GORDON COMPANY
AT
$20.00 NET PER SHARE
BY
WGC ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
PRECISION CASTPARTS CORP.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON FRIDAY, JUNE 18, 1999 UNLESS THE OFFER IS EXTENDED.
May 21, 1999
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated May 21, 1999
(the "Offer to Purchase") and the related Letter of Transmittal relating to an
offer by WGC Acquisition Corp., a Massachusetts corporation ("Purchaser"), and a
wholly owned subsidiary of Precision Castparts Corp., an Oregon corporation
("PCC"), to purchase all of the outstanding shares of Common Stock, $1.00 par
value (the "Shares"), of Wyman-Gordon Company, a Massachusetts corporation (the
"Company"), at a purchase price of $20.00 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase
and in the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer").
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR
YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares held by us for your account, pursuant to
the terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $20.00 per Share, net to you in cash.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the Offer at
least 66 2/3 percent of the outstanding Shares (on a fully diluted basis).
4. The Board of Directors of the Company has approved the Offer and the
Merger (as defined in the Offer to Purchase) and has determined that the
terms of the Offer and the Merger are fair to, and in the best interests of,
the stockholders and recommends that stockholders of the Company accept the
Offer.
5. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME,
ON FRIDAY, JUNE 18, 1999, UNLESS THE OFFER IS EXTENDED.
The Offer is not being made to, nor will tenders be accepted from, or on
behalf of, holders of Shares residing in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the laws of such
jurisdiction.
If you wish to have us tender any or all of the Shares held by us for your
account, please instruct us by completing, executing and returning to us the
instruction form contained in this letter. If you authorize us to tender your
Shares, all such Shares will be tendered unless otherwise specified in such
instruction form. Your instruction should be forwarded to us in ample time to
permit us to submit a tender on your behalf prior to the expiration of the
Offer.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
ALL OF THE OUTSTANDING SHARES OF
COMMON STOCK
OF
WYMAN-GORDON COMPANY
The undersigned acknowledge(s) receipt of your letter enclosing the Offer to
Purchase dated May 21, 1999 (the "Offer to Purchase") and the related Letter of
Transmittal pursuant to an offer by WGC Acquisition Corp., a Massachusetts
corporation, to purchase all of the outstanding shares of Common Stock, $1.00
par value (the "Shares"), of Wyman-Gordon Company, a Massachusetts corporation.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares which are held by you for the
account of the undersigned), upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal
furnished to the undersigned.
<TABLE>
<S> <C>
Number of Shares SIGN HERE
to be Tendered: shares -------------------------------------------
- ------------------------ Signature(s)
-------------------------------------------
-------------------------------------------
Please print name(s)
-------------------------------------------
-------------------------------------------
Address
-------------------------------------------
Area Code & Telephone Number
-------------------------------------------
Tax Identification or Social Security
Number(s)
</TABLE>
2
<PAGE>
PRECISION CASTPARTS CORP. AND WYMAN-GORDON REACH AGREEMENT ON THE SALE OF
WYMAN-GORDON TO PRECISION CASTPARTS FOR $20 PER SHARE
PORTLAND, Oregon, and GRAFTON, Massachusetts - May 17, 1999 - Precision
Castparts Corp. (NYSE:PCP) and Wyman-Gordon Company (NYSE:WYG) today
announced that Precision Castparts Corp. has agreed to acquire 100 percent of
the outstanding shares of Wyman-Gordon in a cash transaction valued at
approximately $825 million, including the assumption of $104 million of net
debt.
Through a wholly owned subsidiary, Precision Castparts Corp. (PCC) will
commence a cash tender offer on or before May 21, 1999, to purchase all
outstanding shares of Wyman-Gordon common stock for $20 per share. Following
completion of the tender offer, Wyman-Gordon will become a wholly owned
subsidiary of PCC through a cash merger at the same price. The tender offer
will be conditioned upon the tender of at least two-thirds of the outstanding
shares of Wyman-Gordon and certain other conditions, including compliance
with the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976.
PCC is the market leader in manufacturing both large, complex structural
investment castings and airfoil castings used in jet aircraft engines, and
has gained market share both in industrial gas turbine (IGT) and structural
airframe castings in recent years. Wyman-Gordon is a market leader in
high-quality, technologically advanced forgings and castings for the
aerospace, energy, and industrial markets. PCC's acquisition of
Wyman-Gordon, headquartered in Grafton, Massachusetts, creates a company that
will be a key supplier of both castings and forgings for aircraft engine
components. In addition, the acquisition will strengthen PCC's position in
structural airframe, IGT, energy, and other industrial markets.
PCC reported record sales of $1,471.9 million for the fiscal year ended March
28, 1999, with record net income of $103.3 million, or $4.22 per share
(diluted). Wyman-Gordon's sales for fiscal 1998 were a record $752.9
million, with net income of $33.9 million, or $0.91 per share (diluted).
"This strategic acquisition builds on PCC's traditional strengths in the
aerospace industry," said William C. McCormick, chairman and chief executive
officer of Precision Castparts Corp. "In addition, over the past five years,
PCC has been growing through non-aerospace acquisitions in fluid management,
industrial metalworking tools and machines, pulp and paper, advanced
metalforming technologies, tungsten carbide, and other metal products
markets, as well as through the development of our core capabilities for the
IGT and airframe markets. The acquisition of Wyman-Gordon will accelerate
our expansion into these markets and enable us to heighten our reputation as
a high-quality, cost-effective supplier.
"In addition to generating increased sales and establishing an even better
aftermarket position, we expect to realize significant synergies over time,"
McCormick continued. "The transaction should be slightly dilutive to PCC's
earnings in the first year, with generous opportunities for accretion in
subsequent years, as the company realizes the full effect of the synergies."
David P. Gruber, chairman and chief executive officer of Wyman-Gordon,
stated, "The board of directors of Wyman-Gordon believes that PCC's offer
represents an excellent opportunity for our shareholders. The board and
management have sought to produce superior returns for our shareholders, and,
with this agreement, we believe that we have achieved our goal. We are
excited about joining forces with PCC, as the combination of our respective
businesses should result in a stronger entity that will be able to capitalize
on opportunities that we could not realize on our own. The combination of
PCC and Wyman-Gordon will create the world's premier, high-technology, metals
application company."
The boards of both companies have approved the merger agreement and the
tender offer. In addition, PCC plans to tender for the 8.0 percent senior
notes of Wyman-Gordon. The entire transaction will be financed at closing by
a fully underwritten credit facility.
The Wyman-Gordon businesses will initially be operated as a separate PCC
business and will report to William McCormick. PCC will continue to use the
Wyman-Gordon name in connection with the forging business.
<PAGE>
Schroder & Co. Inc. is serving as financial advisor to Precision Castparts
Corp., and Goldman, Sachs & Co. is serving as financial advisor to
Wyman-Gordon.
Precision Castparts Corp. is a worldwide manufacturer of complex metal
components and products. Wyman-Gordon Company is a leader in forgings,
investment castings, and composite structures.
Part of this news release contains forward-looking statements that involve
risks and uncertainties; actual results could differ materially from those
projected in the forward-looking statements. The risks and uncertainties are
detailed from time to time in the Precision Castparts Corp. and Wyman-Gordon
Company reports filed with the Securities and Exchange Commission, including
but not limited to both companies' 1998 annual reports and Form 10-Ks.
Contacts: Dwight Weber, Precision Castparts Corp. - 503-417-4855
David Gruber, Wyman-Gordon Company - 508-839-4441
<PAGE>
[BANK OF AMERICA LOGO]
May 14, 1999
William D. Larsson
Chief Financial Officer
Precision Castparts Corp.
4650 S.W. Macadam Avenue, Suite 440
Portland, OR 97201-4254
Re: $1,250,000,000 SENIOR SECURED CREDIT FACILITIES
Dear Bill:
Precision Castparts Corp. (the "Borrower") has advised Bank of America National
Trust and Savings Association ("Bank of America") and NationsBanc Montgomery
Securities LLC ("NMS") that the Borrower intends to acquire (the "Transaction")
all of the outstanding capital stock of Wyman Gordon Company (the "Acquired
Company"). You have advised us that up to $1,250,000,000 in senior debt
financing will be required in order to effect the Transaction, to refinance the
Borrower's existing revolving credit and term loan facilities, to pay the
related costs and expenses and to provide funds for ongoing general corporate
purposes after completion of the Transaction, and that no external financing
other than the financing described herein will be required in connection with
the Transaction other than the proceeds of the Securitization (as defined
below). References herein to the "Transaction" shall include the financing
described herein, the refinancing of existing debt and all other transactions
related to the Transaction.
In connection with the foregoing, Bank of America is pleased to offer to be the
sole and exclusive administrative agent (in such capacity, the "Administrative
Agent") for $1,250,000,000 Senior Secured Credit Facilities (the "Senior Secured
Credit Facilities") to the Borrower, and Bank of America is pleased to offer its
commitment to lend all $1,250,000,000 of the Senior Secured Credit Facilities,
upon and subject to the terms and conditions of this letter and the Summary of
Terms and Conditions attached hereto (the "Summary of Terms"). The
$1,250,000,000 Senior Secured Credit Facilities shall consist of a $400,000,000
Revolving Credit Facility, a $550,000,000 Tranche A Term Loan Facility, and a
$300,000,000 Interim Term Loan Facility. NMS is pleased to advise you of its
willingness, as sole and exclusive Lead Arranger and Book Manager for the Senior
Secured Credit Facilities, to form a syndicate of financial institutions (the
"Lenders") reasonably acceptable to you for the Senior Secured Credit
Facilities.
Bank of America will act as sole and exclusive Administrative Agent for the
Senior Secured Credit Facilities and NMS will act as sole and exclusive Lead
Arranger and Book Manager for the Senior Secured Credit Facilities. No
additional agents, co-agents or arrangers will be appointed and no other titles
will be awarded for the Senior Secured Credit Facilities without our prior
written approval in connection herewith.
NMS intends to commence syndication efforts promptly, and you agree to actively
assist, and to use your best efforts to cause the Acquired Company to assist,
NMS in achieving a syndication of the Senior Secured Credit Facilities that is
satisfactory to it. Such assistance by you and, if available, the Acquired
Company shall include (a) your providing and causing your advisors to provide us
and the other Lenders upon request with all information reasonably deemed
necessary by us to complete syndication, including, but not limited to,
information and evaluations prepared by the Borrower and the Acquired Company
and their advisors, or
<PAGE>
Precision Castparts Corp.
May 14, 1999
Page 2
on their behalf, relating to the Transaction; (b) assistance in the
preparation of an Offering Memorandum to be used in connection with the
syndication; (c) your using commercially reasonable efforts to ensure that
the syndication efforts benefit materially from your existing lending
relationships; and (d) otherwise assisting us in our syndication efforts,
including by making senior management and advisors of the Borrower and its
subsidiaries, and using your best efforts to make senior management and
advisors of the Acquired Company and its subsidiaries, available from time to
time to attend and make presentations regarding the business and prospects of
the Borrower and the Acquired Company and their subsidiaries, as appropriate,
at one or more meetings of prospective Lenders.
It is understood and agreed that Bank of America and NMS will manage and control
all aspects of the syndication, including decisions as to the selection of
proposed Lenders and any titles offered to proposed Lenders, when commitments
will be accepted and the final allocations of the commitments among the Lenders.
It is understood that no Lender participating in the Senior Secured Credit
Facilities will receive compensation from you in order to obtain its commitment,
except on the terms contained herein and in the Summary of Terms. It is
understood and agreed that the amount and distribution of the fees among the
Lenders will be at our sole discretion and that any syndication prior to the
execution of the definitive documentation for the Senior Secured Credit
Facilities will reduce the commitment of Bank of America.
The commitment of Bank of America hereunder and the agreement of NMS to provide
the services described herein are subject to the agreement in the preceding
paragraph and the satisfaction of each of the following conditions precedent in
a manner acceptable to us in our reasonable judgment: (a) each of the terms and
conditions set forth herein and in the Summary of Terms; (b) the absence of a
material breach of any representation, warranty or agreement of the Borrower set
forth herein; (c) execution by the Borrower, the Acquired Company and/or other
appropriate parties of a definite merger agreement and other related
documentation for the Transaction (collectively, the "Transaction Documents"),
which Transaction Documents shall be in form and substance reasonably
satisfactory to us; (d) our satisfaction that prior to and during the
syndication of the Senior Secured Credit Facilities there shall be no competing
offering, placement or arrangement of any debt securities or bank financing by
or on behalf of the Borrower or the Acquired Company (except as described in
this letter); (e) the negotiation, execution and delivery of definitive
documentation for the Senior Secured Credit Facilities consistent with the
Summary of Terms and otherwise satisfactory to us; (f) since December 31, 1998
for the Borrower and since February 28, 1999 for the Acquired Company, no
change, occurrence or development that could, in our reasonable judgment, have a
material adverse effect on the business, operations or condition (financial or
otherwise) of the Borrower and the Acquired Company on a combined basis, in each
case together with its subsidiaries taken as a whole, shall have occurred or
become known to us; and (g) our not becoming aware after the date hereof of any
information or other matter which in our reasonable judgment is inconsistent in
a material and adverse manner with any information or other matter prepared by
the Acquired Company and disclosed to us prior to the date hereof (in which case
we may, in our reasonable judgment, suggest alternative financing amounts or
structures that ensure adequate protection for the Lenders or terminate this
letter and any commitment or undertaking hereunder). With reference to clause
(d) above, we understand and agree that after closing of the Senior Secured
Credit Facilities the Borrower may authorize the syndication or placement of a
receivables securitization facility of up to $150,000,000, subject to the
prepayment requirements set forth in the Summary of Terms.
You hereby represent, warrant and covenant that (a) all information, other
than the Projections (defined below), which has been or is hereafter made
available to us or the Lenders by you or any of your representatives in
connection with the transactions contemplated hereby (the "Information") is
and will be complete and correct in all material respects and does not and
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained therein not
misleading, and (b) all financial projections concerning the Borrower and the
Acquired Company and their respective subsidiaries that have been or are
hereafter made available to us or the Lenders by you or any of your
representatives (the "Projections") have been or will be prepared in good
faith based upon assumptions you believe to be reasonable. You agree to
furnish us with such Information and Projections as we may
<PAGE>
Precision Castparts Corp.
May 14, 1999
Page 3
reasonably request and to supplement the Information and the Projections from
time to time until the closing date for the Senior Secured Credit Facilities
so that the representation, warranty and covenant in the preceding sentence
is correct on such closing date. You understand that in arranging and
syndicating the Senior Secured Credit Facilities, Bank of America and NMS
will be using and relying on the Information and the Projections without
independent verification thereof.
By acceptance of this offer, you agree to pay all reasonable out-of-pocket fees
and expenses (including reasonable attorneys' fees and expenses, the allocated
cost of internal counsel and due diligence expenses) incurred before or after
the date hereof by us in connection with the Senior Secured Credit Facilities,
the syndication thereof and the other transactions contemplated hereby.
You agree to indemnify and hold harmless Bank of America, NMS, each Lender and
each of their affiliates and their directors, officers, employees, advisors and
agents (each, an "Indemnified Party") from and against (and will reimburse each
Indemnified Party as the same are incurred) any and all losses, claims, damages,
liabilities, and expenses (including, without limitation, the reasonable fees
and expenses of counsel and the allocated cost of internal counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
involving any demand made upon or claim asserted against an Indemnified Party
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (a) the Transaction and any of
the other transactions contemplated thereby, or (b) the Senior Secured Credit
Facilities, or any use made or proposed to be made with the proceeds thereof,
unless and only to the extent that, as to any Indemnified Party, it shall be
determined in a final, nonappealable judgment by a court of competent
jurisdiction or pursuant to an award in binding arbitration that such losses,
claims, damages, liabilities or expenses resulted primarily from the gross
negligence or willful misconduct of such Indemnified Party or from materially
misleading information relating to the Indemnified Party and provided by such
Indemnified Party. No Indemnified Party shall be liable for any damages arising
from the use by others of Information or other materials obtained through
internet, Intralinks or other similar information transmission systems in
connection with the Senior Secured Credit Facilities other than any such damages
determined in a final, nonappealable judgment by a court of competent
jurisdiction or pursuant to an award in binding arbitration to have resulted
primarily from the gross negligence or willful misconduct of such Indemnified
Party. In the case of any investigation, litigation or proceeding to which the
indemnity in this paragraph applies, such indemnity shall be effective whether
or not such investigation, litigation or proceeding is brought by you, your
shareholders or creditors or an Indemnified Party and whether or not the
Transaction is consummated. You agree that no Indemnified Party shall have any
liability to you or your subsidiaries or affiliates or to your or their
respective security holders or creditors for any indirect or consequential
damages arising out of, related to or in connection with the Transaction or any
of the financings.
The terms of this letter, the Summary of Terms and the letter concerning fees
and certain other matters among you and us (the "Fee Letter") are confidential
and, except for disclosure on a confidential basis to your accountants,
attorneys and other professional advisors retained by you in connection with the
Senior Secured Credit Facilities or as may be required by law, may not be
disclosed in whole or in part to any other person or entity (including the
Acquired Company) without our prior written consent; provided that, after your
acceptance of this letter and the Fee Letter, we specifically consent to the
disclosure of this letter and the Summary of Terms (but NOT the Fee Letter) to
the Acquired Company and its stockholders and their respective attorneys,
financial advisors, and accountants in connection with the Transaction, in any
filing with the Securities and Exchange Commission or any other federal or state
regulatory body in connection with the Transaction to the extent required by
law, in a press release and other disclosure to the extent necessary to comply
with applicable securities laws. Notwithstanding any such disclosure to any
other person or entity, this letter sets forth the understanding among the
parties hereto and may not be relied upon by any other person or entity (other
than the Indemnified Parties).
<PAGE>
Precision Castparts Corp.
May 14, 1999
Page 4
The provisions of the immediately preceding three paragraphs shall remain in
full force and effect regardless of whether any definitive documentation for the
Senior Secured Credit Facilities shall be executed and notwithstanding the
termination of this letter or any commitment or undertaking hereunder.
This letter and the Fee Letter shall be governed by laws of the State of
California. Each of us hereby irrevocably waives all right to trial by jury in
any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this letter, the Summary of Terms, the
transactions contemplated hereby and thereby or the actions of Bank of America
and NMS in the negotiation, performance or enforcement hereof.
This letter, together with the Summary of Terms and the Fee Letter, are the only
agreements that have been entered into among us with respect to the Senior
Secured Credit Facilities and set forth the entire understanding of the parties
with respect thereto. This letter may be modified or amended only by the written
agreement of all of us. This letter is not assignable by you without our prior
written consent and is intended to be solely for the benefit of the parties
hereto and the Indemnified Parties.
This offer will expire at 5:00 p.m. PDT time on May 17, 1999 unless you execute
this letter and the Fee Letter and return them to us prior to that time (which
may be by facsimile transmission), whereupon this letter and the Fee Letter
(each of which may be signed in one or more counterparts) shall become binding
agreements. Thereafter, this undertaking and commitment will expire on the
earliest to occur of (a) the closing of the Transaction without the use of the
Senior Secured Credit Facilities and (b) July 31, 1999, unless definitive
documentation for the Senior Secured Credit Facilities is executed and delivered
prior to such date. This letter supercedes all prior signed and unsigned
versions hereof.
We are pleased to have the opportunity to work with you in connection with this
important financing.
Very truly yours,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
By: /s/ Michael J. Dasher
---------------------------------
Title: Managing Director
NATIONSBANC MONTGOMERY SECURITIES LLC
By: /s/ William M. Lau
---------------------------------
Title: Managing Director
<PAGE>
Precision Castparts Corp.
May 14, 1999
Page 5
Accepted and Agreed to
as of May 15, 1999:
PRECISION CASTPARTS CORP.
By: /s/ William D. Larsson
----------------------------
Title: Vice President and Chief
Financial Officer
<PAGE>
Confidential PRECISION CASTPARTS CORP.
- -------------------------------------------------------------------------------
SUMMARY OF TERMS AND CONDITIONS
PRECISION CASTPARTS CORP.
$1,250,000,000 SENIOR SECURED CREDIT FACILITIES
<TABLE>
<S> <C>
BORROWER: Precision Castparts Corp. (the "Borrower"), which will acquire by tender
offer and merger (the "Transaction") all of the outstanding stock of
Wyman-Gordon Company (the "Acquired Company").
ADMINISTRATIVE AGENT: Bank of America National Trust and Savings Association ("Bank of America").
SOLE LEAD ARRANGER AND
SOLE BOOK MANAGER: NationsBanc Montgomery Securities LLC ("NMS").
LENDERS: A syndicate of financial institutions (including Bank of America) arranged
by NMS, which institutions shall be acceptable to the Borrower and the
Administrative Agent (collectively, the "Lenders").
SENIOR SECURED
CREDIT FACILITIES: An aggregate principal amount of up to $1,250,000,000 will be available
upon the terms and conditions hereinafter set forth:
REVOLVING CREDIT FACILITY: $400,000,000 revolving credit facility with a
sublimit in an amount to be determined for issuing letters of credit.
TRANCHE A TERM LOAN FACILITY: $550,000,000 term loan facility.
INTERIM TERM LOAN FACILITY: $300,000,000 term loan facility.
PURPOSE: The proceeds of the Senior Secured Credit Facilities shall be used: (i) to
refinance the outstanding principal amount of, accrued interest on and
premium, if any, on existing indebtedness of the Acquired Company; (ii) to
pay the cash portion, including transaction fees, of the Transaction;
(iii) to refinance the Borrower's existing revolving and term credit
facilities; and (iv) to provide for working capital and other general
corporate purposes, including permitted acquisitions, of the Borrower and
its subsidiaries.
INTEREST RATES: As set forth in Addendum I.
FEES/EXPENSES: As set forth in Addendum I and the Fee Letter.
MATURITY: The Revolving Credit Facility shall terminate and all amounts outstanding
shall be due and payable in full six years from Closing.
The Tranche A Term Loan Facility shall be subject to repayment according to
the Scheduled Amortization (as defined below), with the final payment of all
amounts outstanding being due and payable in full six years from
Closing.
The Interim Term Loan Facility shall terminate and all amounts shall be due
and payable 364 days from Closing.
- -------------------------------------------------------------------------------
Page 1
<PAGE>
SIGNING AND CLOSING: The date of execution of definitive loan documents ("Signing") shall occur
on or before July 31, 1999. The date of satisfaction of conditions
precedent therein ("Closing") shall occur on or before the date nine
months after the HSR filing to be made by the Borrower in connection with
the Transaction (which is expected to occur approximately one week
following the signing of the Merger Agreement referred to below).
AVAILABILITY/SCHEDULED
AMORTIZATION: REVOLVING CREDIT FACILITY: Loans under the Revolving Credit Facility may
be made, and letters of credit may be issued, in each case subject to
availability.
TRANCHE A TERM LOAN FACILITY: Loans made under the Tranche A Term Facility
will be available in multiple borrowings during an availability period and
will be subject to quarterly amortization of principal, based upon annual
amounts to be determined (the "Scheduled Amortization").
INTERIM TERM LOAN FACILITY: Loans made under the Interim Term Loan Facility
shall be available in multiple borrowings during an availability period.
MANDATORY PREPAYMENTS
AND COMMITMENT
REDUCTIONS: Usual and customary for a transaction of this type, including but not
limited to: asset sales, debt issuances, equity offerings (unless the
Borrower has achieved an investment grade rating), securitizations, and
insurance and condemnation events. Prepayments shall be applied to the
Interim Term Loan Facility until paid in full, except that the proceeds of
the proposed Securitization shall be applied to the Tranche A Term Loan
Facility. The Borrower will be considered to have an investment grade
rating if its senior unsecured long-term debt ratings as issued by Standard
and Poor's Corporation and Moody's Investors Services (after giving effect
to the Transaction) are at least BBB- and Baa3, respectively.
COLLATERAL: Concurrently with the Transaction, the Administrative Agent (on behalf of,
and for the equal and ratable benefit of, the Lenders, and the holders
(the "Holders") of the securities outstanding under the Borrower's
Indenture dated as of December 17, 1997 and any senior notes to be issued
by the Borrower after Closing) shall receive a first priority perfected
security interest in all of the capital stock of each Material Subsidiary.
If any Material Subsidiary is a non-U.S. subsidiary, such security interest
shall be limited to 65% of the capital stock of each such non-U.S. subsidiary.
"Material Subsidiary" means any subsidiary (direct or indirect) of the Borrower
constituting 10% or more of total consolidated assets or 10% or more of total
consolidated revenues.
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<PAGE>
COLLATERAL RELEASE: The collateral shall be released upon (i) the attainment of an actual or
implied senior unsecured long-term debt rating that is equal to or better
than BBB- from S&P or Baa3 from Moody's or (ii) achievement of a ratio of
total debt to EBITDA of less than an amount to be determined.
CONDITIONS PRECEDENT: Usual and customary for a transaction of this type, including but not
limited to satisfactory results in all material respects from the
following:
(i) The negotiation, execution and delivery of definitive documentation for
the Senior Secured Credit Facilities satisfactory to NMS, the Administrative
Agent and Bank
of America.
(ii) The Agreement and Plan of Merger among the Borrower, an acquisition
subsidiary and the Acquired Company ("Merger Agreement") substantially
in the form provided by Goldman Sachs under cover of letter dated
April 29, 1999 (provided, however, that Section 4.5 thereof shall
accurately reflect this commitment) shall have been duly executed by
the parties thereto. The purchase of Shares (as defined in the Merger
Agreement) of the Acquired Company pursuant to the Merger Agreement
shall have been consummated in accordance with the terms thereof and in
compliance with applicable law and regulatory approvals. The Merger
Agreement shall not be altered, amended or otherwise changed or
supplemented or any material condition therein waived, without the
prior written consent of the Administrative Agent.
(iii) The corporate capital and ownership structure (including articles of
incorporation and by-laws), shareholders agreements and management of
the Borrower and its subsidiaries (after giving effect to the
Transaction), shall be satisfactory to the Administrative Agent.
(iv) The Administrative Agent shall have received and approved a pro forma
balance sheet of and projections for the Borrower and its subsidiaries
as of and commencing at Closing giving effect to the Transaction and
the transactions contemplated hereby and reflecting estimated purchase
price accounting adjustments, and such other information relating to
the Transaction as the Administrative Agent may require.
(v) Since December 31, 1998 for the Borrower and February 28, 1999 for the
Acquired Company, no change, occurrence or development that could, in
the Administrative Agent's reasonable judgment, have a material adverse
effect on the business, operations or condition (financial or otherwise)
of the Borrower and the Acquired Company on a combined basis, in each
case together with its subsidiaries taken as a whole, shall have occurred
or become known to the Administrative Agent. The Administrative Agent
shall not have become aware after the date hereof of any information or
other matter which in its reasonable judgment is inconsistent in a material
and adverse manner with any
information or
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Page 3
<PAGE>
other matter prepared by the Acquired Company and
disclosed to the Administrative Agent prior to the date hereof.
(vi) The Administrative Agent shall have received (a) satisfactory
opinions of counsel to the Borrower (which shall cover, among other
things, authority, legality, validity, binding effect and
enforceability of the documents for the Senior Secured Credit
Facilities) and local counsel and such corporate resolutions,
certificates and other documents as the Administrative Agent shall
reasonably require and (b) satisfactory evidence that the
Administrative Agent (on behalf of the Lenders and the Holders)
holds a perfected, first priority lien in all of the Collateral for
the Senior Secured Credit Facilities, subject to no other liens except
for permitted liens to be determined.
(vii) Receipt of all governmental, shareholder and third party consents
(including Hart-Scott Rodino clearance) and approvals necessary or,
in the opinion of the Administrative Agent, desirable in connection
with the purchase of the Acquired Company and the related financings
and other transactions contemplated hereby and expiration of all
applicable waiting periods without any action being taken by any
authority that could restrain, prevent or impose any material adverse
conditions on the Transaction or such other transactions or that could
seek or threaten any of the foregoing, and no law or regulation shall
be applicable which in the judgment of the Administrative Agent could
have such effect.
(viii) The Borrower and its subsidiaries (including the Acquired Company)
shall be in compliance with all existing material financial
obligations (after giving effect to the Transaction).
(ix) The Administrative Agent shall be satisfied that the amount of committed
financing available to the Borrower shall be sufficient to meet the
ongoing financing needs of the Borrower and its subsidiaries after giving
effect to the Transaction and there shall be no less than an amount to be
determined of availability under the Revolving Credit Facility at Closing
after giving effect to the Transaction and all borrowings of an amount to
be determined under the Revolving Credit Facility on such date.
(x) Cancellation and repayment of the Borrower's existing revolving credit
facility and term loan.
(xi) The Administrative Agent, NMS, and Bank of America shall have received
all fees and expenses required to be paid on or before Closing.
REPRESENTATIONS
AND WARRANTIES: Usual and customary for financings of this type, including, but not limited to,
the following: (i) corporate existence and status; (ii) corporate power and
authority/enforceability; (iii) no violation of law or contracts or organizational
documents; (iv) no material litigation;
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<PAGE>
(v) correctness of specified financial statements and other information
and no material adverse change; (vi) no required governmental or third
party approvals; (vii) use of proceeds/compliance with margin regulations;
(viii) status under Investment Company Act; (ix) ERISA matters; (x)
environmental matters; (xi) payment of taxes; (xii) accuracy of disclosure;
(xiii) Year 2000 preparedness; (xiv) consummation of the Transaction; and
(xv) perfection and first priority of security interests in favor of Lenders
and Holders (on an equal and ratable basis) in the Collateral.
COVENANTS: Usual and customary for financings of this type generally and for this
transaction in particular, including, but not limited to, the following:
(i) delivery of financial statements and other reports; (ii) delivery of
compliance certificates; (iii) delivery of notices of default, material
litigation and material governmental and environmental proceedings;
(iv) compliance with laws (including environmental laws and ERISA matters)
and material contractual obligations; (v) payment of taxes; (vi)
maintenance of insurance; (vii) limitation on liens and negative pledges;
(viii) limitation on mergers, consolidations and sales of assets; (ix)
limitation on incurrence of additional indebtedness; (x) limitation on
investments (including loans and advances) and acquisitions; (xi)
limitation on transactions with affiliates; and (xii) Year 2000 compliance.
Financial covenants which are usual and customary for transactions of this
type, which include (but are not limited to) the following:
- Minimum Net Worth,
- Maximum Ratio of Total Debt to EBITDA,
- Minimum Fixed Charge Coverage Ratio.
EVENTS OF DEFAULT: Usual and customary for financings of this type generally and for this
transaction in particular, including, but not limited to, the following:
(i) nonpayment of principal, interest, fees or other amounts, (ii)
violation of covenants, (iii) inaccuracy of representations and
warranties, (iv) cross-default to other material agreements and
indebtedness, (v) bankruptcy and other insolvency events, (vi) material
judgments, (vii) ERISA matters, (viii) actual or asserted invalidity of
any loan documentation or security interests, or (ix) change of control.
ASSIGNMENTS AND
PARTICIPATIONS: Lenders will be permitted to make assignments in acceptable minimum
amounts to other financial institutions approved by the Borrower (so long
as no event of default under the Senior Secured Credit Facilities or
incipient default has occurred and is continuing) and the Administrative
Agent, which approval shall not be unreasonably withheld. Lenders will be
permitted to sell participations with voting rights limited to significant
matters such as changes in amount, rate and maturity date and releases of
the Collateral. An assignment fee of $3,500 shall be payable by the
Lender to the Administrative Agent upon the effectiveness of any such
assignment
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<PAGE>
(including, but not limited to, an assignment by a Lender to
another Lender).
WAIVERS AND AMENDMENTS: Amendments and waivers of the provisions of the loan agreement and other
definitive credit documentation will require the approval of Lenders
holding loans and commitments representing more than 50% of the aggregate
amount of loans and commitments under the Senior Secured Credit
Facilities, except that (i) the consent of all of the Lenders affected
thereby shall be required with respect to (a) increases in the commitment
of such Lenders, (b) reductions of principal, interest, or fees, (c)
extensions of scheduled maturities or times for payment, and (d) releases
of all or substantially all of the Collateral.
INDEMNIFICATION: The Borrower shall indemnify the Administrative Agent, NMS and the Lenders
and their respective affiliates (each an "Indemnified Party") from and
against all losses, liabilities, claims, damages or expenses involving any
demand made upon or claim asserted against an Indemnified Party arising
out of or relating to the Transaction, the Senior Secured Credit
Facilities, the Borrower's use of loan proceeds or the commitments,
including, but not limited to, reasonable attorneys' fees (including the
allocated cost of internal counsel) and settlement costs. This
indemnification shall survive and continue for the benefit of the
indemnitees at all times after the Borrower's acceptance of the Lenders'
commitments for the Senior Secured Credit Facilities, notwithstanding any
failure of the Senior Secured Credit Facilities to close.
GOVERNING LAW: State of New York.
</TABLE>
THIS SUMMARY OF TERMS AND CONDITIONS (THE "TERM SHEET") IS NOT MEANT TO BE,
NOR SHALL IT BE CONSTRUED AS, AN ATTEMPT TO DESCRIBE ALL TERMS AND CONDITIONS
THAT WOULD PERTAIN TO THE SENIOR SECURED CREDIT FACILITIES, NOR DO ITS TERMS
SUGGEST THE SPECIFIC PHRASING OF DOCUMENTATION CLAUSES. INSTEAD, IT IS
INTENDED TO OUTLINE CERTAIN BASIC POINTS OF BUSINESS UNDERSTANDING AROUND
WHICH THE SENIOR SECURED CREDIT FACILITIES COULD BE STRUCTURED AND IS SUBJECT
TO REVIEW OF LEGAL AND TAX ISSUES. THIS TERM SHEET SUPERCEDES ALL PRIOR
VERSIONS THEREOF.
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<PAGE>
ADDENDUM I
FEES AND EXPENSES
<TABLE>
<S> <C>
COMMITMENT
FEE: The Borrower will pay a fee (the "Commitment Fee"), determined in
accordance with the pricing grid attached hereto, on the unused portion
of each Lender's share of the Senior Secured Credit Facilities. The
Commitment Fee is payable quarterly in arrears commencing upon Signing.
INTEREST RATES: The Interim Term Facility, Revolving Credit Facility and the Tranche A
Term Facility shall bear interest at a rate equal to LIBOR plus the
Applicable Margin or the Alternate Base Rate (to be defined as the higher
of (i) the Bank of America prime rate and (ii) the Federal Funds rate plus
.50%) plus the Applicable Margin; provided, that if during the 180 day
period following the Closing, any breakage costs, charges or fees are
incurred with respect to LIBOR loans on account of the syndication of the
Senior Secured Credit Facilities, the Borrower shall immediately reimburse
the Administrative Agent for any such costs, charges or fees. Such right
of reimbursement shall be in addition to and not in limitation of
customary cost and yield protections. The Applicable Margin in each case
shall be determined in accordance with the pricing grid.
The Borrower may select interest periods of 1, 2, 3 or 6 months for
LIBOR loans, subject to availability. Interest shall be payable at the end
of the selected interest period, but no less frequently than quarterly.
A default rate shall apply on all loans in the event of default under
the Senior Secured Credit Facilities at a rate per annum of 2% above the
applicable interest rate.
PERFORMANCE PRICING: The Commitment Fee and the Applicable Margin, for any fiscal quarter,
shall be the applicable rate per annum as set forth in the pricing grid.
CALCULATION OF
INTEREST AND FEES: Other than calculations in respect of interest at the Alternate
Base Rate (which shall be made on the basis of actual number of days elapsed
in a 365/366 day year), all calculations of interest and fees
shall be made on the basis of actual number of days elapsed in a 360 day
year.
COST AND YIELD PROTECTION: Customary for transactions and facilities of this type, including, without
limitation, in respect of breakage or redeployment costs incurred in
connection with prepayments, changes in capital adequacy and capital
requirements or their interpretation, illegality, unavailability, reserves
without proration or offset and payments free and clear of withholding or
other taxes.
LETTER OF CREDIT FEES: Letter of credit fees (to be determined) are due quarterly in arrears to
be shared proportionately by the Lenders, except for certain fees to be
retained by the issuing bank.
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<PAGE>
EXPENSES: The Borrower will pay all reasonable costs and expenses associated with
the preparation, due diligence, administration, syndication and enforcement
of all documentation executed in connection with the Senior Secured Credit
Facilities, including, without limitation, the legal fees of counsel to the
Administrative Agent and NMS (including the allocated cost of internal
counsel), regardless of whether or not the Senior Secured Credit Facilities
are closed. The Borrower will also pay the expenses of each Lender in
connection with the enforcement of any loan documentation
for the Senior Secured Credit Facilities.
</TABLE>
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<PAGE>
PRICING GRID
PRICING GRID: The Commitment Fee and the Applicable Margin, shall be, at any
time, the applicable rate per annum as set forth in the table below opposite
the long term unsecured senior, non-credit enhanced debt ratings of the
Borrower by Standard & Poor's Ratings Group and Moody's Investors Service Inc.
For six months, the initial Applicable Margin shall be no lower than 1.50%
and the initial Commitment Fee shall be no lower than .375%, assuming the
Borrower's senior unsecured long-term debt ratings as issued by Standard and
Poor's Corporation and Moody's Investors Services are BB+ and Ba1,
respectively.
If the Company receives BBB and Baa2 ratings, a utilization fee of .125% will
be added if outstandings for the Facilities, including the Revolving Credit
Facility and the Term Loan Facility, exceed 33%.
In the event of a split rating of more than one level, the lower of rating
will apply.
<TABLE>
<CAPTION>
Applicable Margin
Debt Applicable Margin for Alternate Base
Rating Commitment Fee for LIBOR Loans Rate Loans
------ -------------- --------------- ----------
<S> <C> <C> <C>
GREATER THAN OR
EQUAL TO BBB and Baa2 .25% .75% 0%
BBB- and Baa3 .25% 1.00% 0%
BBB- and Ba1 or BB+ and Baa3 .30% 1.25% .25%
BB+ and Ba1 .375% 1.50% .50%
BB and Ba2 .375% 1.75% .75%
LESS THAN BB and Ba2 .50% 2.00% 1.00%
</TABLE>
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<PAGE>
----------------------------------------------------------------------
----------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
AMONG
PRECISION CASTPARTS CORP.,
WGC ACQUISITION CORP.
AND
WYMAN-GORDON COMPANY
Dated as of May 17, 1999
----------------------------------------------------------------------
----------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
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----
<S> <C> <C>
ARTICLE I THE OFFER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 The Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Company Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3 Board Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.4 Company Stock Options and Related Matters. . . . . . . . . . . . . . . . . 5
1.5 Employee Stock Purchase Plan . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.4 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.5 Stockholders' Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.6 Merger Without Meeting of Stockholders . . . . . . . . . . . . . . . . . . 8
2.7 Conversion of Securities . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.8 Taking of Necessary Action; Further Action . . . . . . . . . . . . . . . . 8
ARTICLE III PAYMENT FOR SHARES; DISSENTING SHARES. . . . . . . . . . . . . . . . . . . 9
3.1 Payment for Shares of Company Common Stock . . . . . . . . . . . . . . . . 9
3.2 Appraisal Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION SUB . . . . . . 11
4.1 Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Authorization; Validity of Agreement; Necessary Action. . . . . . . . . . 12
4.3 Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . 12
4.4 Information in Proxy Statement. . . . . . . . . . . . . . . . . . . . . . 12
4.5 Required Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . 13
5.1 Existence; Good Standing; Authority; Compliance With Law. . . . . . . . . 13
5.2 Authorization, Validity and Effect of Agreements. . . . . . . . . . . . . 14
5.3 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.4 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.5 Other Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.6 No Violation; Consents. . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.7 SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.8 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.9 Absence of Certain Changes. . . . . . . . . . . . . . . . . . . . . . . . 18
(i)
<PAGE>
<CAPTION>
PAGE
----
<S> <C> <C>
5.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.11 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.12 Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.13 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.14 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.15 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.16 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.17 No Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.18 Opinion of Financial Advisor. . . . . . . . . . . . . . . . . . . . . . . 25
5.19 Year 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.20 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.21 Key Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.22 Product Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.23 Material Contracts and Agreements . . . . . . . . . . . . . . . . . . . . 26
5.24 Definition of the Company's Knowledge . . . . . . . . . . . . . . . . . . 26
ARTICLE VI CONDUCT OF BUSINESS PENDING THE MERGER. . . . . . . . . . . . . . . . . . 26
6.1 Conduct of Business by the Company. . . . . . . . . . . . . . . . . . . . 26
ARTICLE VII ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.1 Other Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.2 Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.3 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.4 No Solicitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.5 Officers' and Directors' Indemnification. . . . . . . . . . . . . . . . . 31
7.6 Access to Information; Confidentiality. . . . . . . . . . . . . . . . . . 32
7.7 Financial and Other Statements. . . . . . . . . . . . . . . . . . . . . . 33
7.8 Public Announcements. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.9 Employee Benefit Arrangements . . . . . . . . . . . . . . . . . . . . . . 33
7.10 Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.11 Status of Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VIII CONDITIONS TO THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . 35
8.1 Conditions to the Obligations of Each Party to Effect the Merger. . . . . 35
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . 36
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.4 Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE X GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(ii)
<PAGE>
<CAPTION>
PAGE
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<S> <C> <C>
10.2 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.3 Non-Survival of Representations, Warranties, Covenants and
Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.4 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.5 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.6 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.7 Choice of Law/Consent to Jurisdiction . . . . . . . . . . . . . . . . . . 41
10.8 No Agreement Until Executed . . . . . . . . . . . . . . . . . . . . . . . 41
ANNEX A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
</TABLE>
(iii)
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (the "AGREEMENT"), dated as of May 17, 1999,
by and among Precision Castparts Corp., an Oregon corporation ("PARENT"), WGC
Acquisition Corp., a Massachusetts corporation and a wholly-owned subsidiary of
Parent ("ACQUISITION SUB"), and Wyman-Gordon Company, a Massachusetts
corporation (the "COMPANY").
RECITALS
WHEREAS, the Board of Directors of each of Parent, Acquisition Sub and the
Company has approved, and deems it advisable and in the best interests of its
respective stockholders to consummate, the acquisition of the Company by Parent
upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, Parent, Acquisition Sub and the Company hereby agree as follows:
ARTICLE I
THE OFFER
1.1 THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with its terms and none of the events or conditions specified in
ANNEX A hereto shall have occurred or shall exist, Acquisition Sub shall, as
soon as practicable after the date hereof, (but in no event later than the fifth
business day following the public announcement of the Offer (treating the
business day on which such public announcement occurs as the first business
day)), commence (within the meaning of Rule 14d-2 under the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (the "EXCHANGE
ACT")) an offer to purchase (as such offer to purchase may be amended in
accordance with the terms of this Agreement, the "OFFER") all of the issued and
outstanding shares ("SHARES") of common stock, par value $1.00 per share, of the
Company (the "COMPANY COMMON STOCK") at a price of not less than $20.00 per
Share, net to the seller in cash (less applicable withholding taxes, if any)
(such price, or such other price per Share as may be paid in the Offer, being
referred to herein as the "OFFER PRICE"). After the commencement of the Offer,
the Offer and the obligation of Acquisition Sub to accept for payment and pay
for Shares tendered pursuant to the Offer shall be subject only to the
conditions set forth in ANNEX A hereto and the condition (the "MINIMUM
CONDITION") that there be validly tendered and not withdrawn prior to the
expiration of the Offer at least two-thirds of the Shares on a fully diluted
basis (the "MINIMUM PERCENTAGE"). Parent and Acquisition Sub expressly reserve
the right to waive any condition set forth in ANNEX A, to change the form or
amount payable per Share in the Offer (including the Offer Price) and to make
any other changes in the terms and conditions of the Offer;
<PAGE>
provided, however, that without the prior written consent of the Company,
Parent shall not amend, or permit to be amended, the Offer to (i) decrease
the Offer Price, (ii) change the consideration into a form other than cash,
(iii) add any conditions to the obligation of Acquisition Sub to accept for
payment and pay for Shares tendered pursuant to the Offer, (iv) amend (other
than to waive) the Minimum Condition or the other conditions set forth in
ANNEX A, or (v) reduce the maximum number of Shares to be purchased in the
Offer. If on the initial scheduled expiration date of the Offer (the
"INITIAL EXPIRATION DATE"), which shall be 20 business days after the date
the Offer is commenced, all conditions to the Offer shall not have been
satisfied or waived, Acquisition Sub may, from time to time, in its sole
discretion, extend the expiration date of the Offer (the "EXPIRATION DATE");
provided, however, that, except as set forth below, the Expiration Date, as
extended, shall be no later than the date that is 60 business days
immediately following the Initial Expiration Date (the "FINAL EXPIRATION
DATE"); and provided further that if on the Initial Expiration Date, all
conditions to the Offer shall have been satisfied or waived other than the
Minimum Condition, Acquisition Sub shall be required to extend the Expiration
Date to the date that is ten business days immediately following the Initial
Expiration Date. Notwithstanding the foregoing, if on the Initial Expiration
Date, the applicable waiting period (and any extension thereof) under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR ACT") in
respect of the Offer shall not have expired or been terminated and all other
conditions to the Offer shall have been satisfied or waived other than the
Minimum Condition and clause (a) of ANNEX A as it relates to compliance with
the HSR Act or other applicable antitrust laws, Acquisition Sub shall be
required to extend the Expiration Date for such additional periods as may be
necessary to permit the parties to seek to obtain termination of the waiting
period under the HSR Act in accordance with Section 7.1 below up to the date
that is nine months after the date upon which Parent files a pre-merger
notification and report form under the HSR Act (the "HSR EXPIRATION DATE");
provided, however, that if the applicable waiting period (and any extension
thereof) under the HSR Act in respect of the Offer expires or is terminated
prior to the date that is ten business days prior to the HSR Expiration Date,
the Expiration Date shall be the date which is ten business days immediately
following public disclosure of the expiration or termination of the waiting
period under the HSR Act. Acquisition Sub shall, on the terms and subject to
the prior satisfaction or waiver of the conditions of the Offer, accept for
payment and pay for Shares tendered as soon as it is legally permitted to do
so under this Agreement and applicable law. The Offer shall be made by means
of an offer to purchase (the "OFFER TO PURCHASE") containing the terms set
forth in this Agreement, the Minimum Percentage and the conditions set forth
in ANNEX A hereto.
(b) As soon as practicable after the date the Offer is commenced,
Parent and Acquisition Sub shall file or cause to be filed with the Securities
and Exchange Commission (the "COMMISSION") a Tender Offer Statement on Schedule
14D-1 (together with all amendments or supplements thereto, the "SCHEDULE
14D-1"), which shall include as an exhibit or incorporate by reference, the
Offer to Purchase (or portions thereof) and forms of the related letter of
transmittal and summary advertisement (such Schedule 14D-1, the Offer to
Purchase and related documents, together with all amendments or supplements
thereto, are collectively referred to herein as the "OFFER DOCUMENTS"). The
Offer Documents shall comply in all material respects with the provisions of
applicable federal securities laws and, on the date filed with the Commission
and on the date first published, sent or given to the Company's
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stockholders, shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading, except that no representation is made
by Parent or Acquisition Sub with respect to information furnished by the
Company for inclusion in the Offer Documents. The information supplied in
writing by the Company for inclusion in the Offer Documents and by Parent or
Acquisition Sub for inclusion in the Schedule 14D-9 (as hereinafter defined)
shall not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. Parent, Acquisition Sub and the Company each agrees
promptly to amend or supplement any information provided by it for use in the
Offer Documents if and to the extent that such information shall have become
false or misleading in any material respect or as otherwise required by
applicable federal securities laws, and Parent and Acquisition Sub each
further agrees to take all steps necessary to cause the Offer Documents, as
so amended or supplemented, to be filed with the Commission and disseminated
to the 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 a reasonable opportunity to review and comment upon the Offer Documents
and all amendments and supplements thereto prior to the filing thereof with
the Commission or the dissemination thereof to the holders of Shares.
1.2 COMPANY ACTIONS.
(a) The Company hereby approves of and consents to the Offer and
represents and warrants that the Board of Directors of the Company (the "COMPANY
BOARD"), at a meeting duly called and held, has unanimously (i) determined that
this Agreement and the transactions contemplated hereby, including the Offer and
the Merger (as hereinafter defined) taken together, are fair to and in the best
interests of the Company and its stockholders, (ii) approved this Agreement and
the transactions contemplated hereby, including, without limitation, the Merger
and the Offer (collectively, the "TRANSACTIONS"), and such approval constitutes
approval of the Transactions for purposes of Chapter 110F of the Massachusetts
General Laws, as amended (the "MGL"), and Article 6(c)2 of the Restated Articles
of Organization of the Company (the "ARTICLES OF ORGANIZATION") and (iii) voted
to recommend that the stockholders of the Company accept the Offer, tender their
Shares thereunder to Acquisition Sub and, if required by applicable law, approve
and adopt this Agreement and the Merger, subject to the Company's rights under
Section 7.4 hereof.
(b) Concurrently with the commencement of the Offer and the filing by
or on behalf of Parent and Acquisition Sub of the Schedule 14D-1, the Company
shall file with the Commission and disseminate to the holders of Shares a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments or supplements thereto, the "SCHEDULE 14D-9"), containing (among
other things) the recommendation referred to in clause (iii) of Section 1.2(a)
hereof, subject to the Company's rights under Section 7.4 hereof. The Schedule
14D-9 shall comply in all material respects with the provisions of applicable
federal securities laws and, on the date filed with the Commission and on the
date first published, sent or given to the Company's stockholders, shall not
contain any untrue statement of a material
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fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information furnished
by Parent or Acquisition Sub for inclusion in the Schedule 14D-9. The
Company, Parent and Acquisition Sub each agrees promptly to correct, amend or
supplement any information provided by it for use in the Schedule 14D-9 if
and to the extent that such information shall have become false or misleading
in any material respect or as otherwise required by applicable federal
securities laws, and the Company further agrees to take all steps necessary
to cause the Schedule 14D-9, as so amended or supplemented, to be filed with
the Commission and disseminated to the holders of Shares, in each case as and
to the extent required by applicable federal securities laws. Parent,
Acquisition Sub and their counsel shall be given a reasonable opportunity to
review and comment upon the Schedule 14D-9 and all amendments and supplements
thereto prior to the filing thereof with the Commission or the dissemination
thereof to the holders of Shares.
(c) In connection with the Offer, the Company shall promptly furnish
Parent and Acquisition Sub with a list of the names and addresses of all record
holders of Shares and security position listings of Shares, each as of a recent
date, and shall promptly furnish Parent and Acquisition Sub with such additional
information, including updated lists of the stockholders of the Company, lists
of the holders of the Company's outstanding stock options, mailing labels,
security position listings and such other assistance and information as Parent
or Acquisition 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, each of Parent and Acquisition Sub shall use the information
described in the preceding sentence only in connection with the Offer, and if
this Agreement is terminated in accordance with its terms, each of them shall,
upon the Company's request, deliver to the Company all such information and any
copies or extracts thereof then in its possession or under its control.
1.3 BOARD REPRESENTATION. Promptly upon the purchase of Shares pursuant
to the Offer, Parent shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Company Board as is equal to the
product of (a) the total number of directors on the Company Board (after giving
effect to the directors designated by Parent pursuant to this sentence) and (b)
the percentage that the total votes represented by such number of Shares in the
election of directors of the Company so purchased bears to the total votes
represented by the number of Shares outstanding. In furtherance thereof, the
Company shall, upon request by Parent, promptly increase the size of the Company
Board and/or exercise its commercially reasonable best efforts to secure the
resignations of such number of its directors as is necessary to enable Parent's
designees to be elected to the Company Board and shall take all actions to cause
Parent's designees to be so elected to the Company Board. At such time, the
Company shall also cause persons designated by Parent to constitute at least the
same percentage (rounded up to the next whole number) as is on the Company Board
of (i) each committee of the Company Board, (ii) each board of directors (or
similar body) of each Subsidiary (as defined in Section 10.2 hereof) of the
Company (each, a "COMPANY SUBSIDIARY") and (iii) each committee (or similar
body) of each such board. The Company
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shall take, at its expense, all action required pursuant to Section 14(f) and
Rule 14f-1 of the Exchange Act in order to fulfill its obligations under this
Section 1.3 and shall include in the Schedule 14D-9 to its stockholders such
information with respect to the Company and its officers and directors as is
required by such Section 14(f) and Rule 14f-1 in order to fulfill its
obligations under this Section 1.3. Parent will supply to the Company in
writing and be solely responsible for any information with respect to itself
and its nominees, officers, directors and affiliates required by such Section
14(f) and Rule 14f-1. The provisions of this Section 1.3 are in addition to
and shall not limit any rights which Acquisition Sub, Parent or any of their
affiliates may have as a holder or beneficial owner of Shares as a matter of
law with respect to the election of directors or otherwise. In the event
that Parent's designees are elected to the Company Board, until the Effective
Time (as hereinafter defined), the Company Board shall have at least two
directors who are directors on the date hereof (the "INDEPENDENT DIRECTORS");
provided that, in such event, if the number of Independent Directors shall be
reduced below two for any reason whatsoever, the remaining Independent
Director shall be entitled to designate the person to fill such vacancy who
shall be deemed to be an Independent Director for purposes of this Agreement
or, if no Independent Director then remains, the other directors shall
designate two persons to fill such vacancies who shall not be stockholders,
affiliates or associates of Parent or Acquisition Sub and such persons shall
be deemed to be Independent Directors for purposes of this Agreement.
Notwithstanding anything in this Agreement to the contrary, in the event that
Parent's designees are elected to the Company Board, after the acceptance for
payment of Shares pursuant to the Offer and prior to the Effective Time, the
affirmative vote of a majority of the Independent Directors shall be required
in addition to any other applicable requirement to (a) amend this Agreement
in any material respect in a manner adverse to any stockholder of the Company
or any intended third-party beneficiary of this Agreement, (b) terminate this
Agreement by the Company, (c) exercise or waive any of the Company's material
rights, benefits or remedies hereunder, or (d) extend the time for
performance of Parent's or Acquisition Sub's respective obligations hereunder.
1.4 COMPANY STOCK OPTIONS AND RELATED MATTERS.
(a) Each option and stock appreciation right (collectively, the
"OPTIONS") granted under the Company Stock Option Plans (as hereinafter
defined), which is outstanding (whether or not currently exercisable) as of
immediately prior to the date on which Acquisition Sub accepts for payment
Shares pursuant to the Offer (the "ACCEPTANCE DATE") and which has not been
exercised or canceled prior thereto shall, on the Acceptance Date, be canceled
and upon the surrender and cancellation of the option agreement representing
such Option, Acquisition Sub shall pay to the holder thereof cash in an amount
equal to the product of (i) the number of Shares provided for in such Option and
(ii) the excess, if any, of the Offer Price over the exercise price per Share
provided for in such Option, which cash payment shall be treated as compensation
and shall be net of any applicable federal or state withholding tax. The
Company shall take all actions necessary to ensure that (i) all Options, to the
extent not exercised prior to the Acceptance Date, shall terminate and be
canceled as of the Acceptance Date and thereafter be of no further force or
effect, (ii) no Options are granted after the date of this Agreement, and
(iii) as of the Acceptance Date, the Company Stock Option Plans and all Options
issued thereunder shall terminate.
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(b) Except as set forth in Section 1.5 or as may be otherwise agreed
to by Parent or Acquisition Sub and the Company, the Company Stock Option Plans
shall terminate as of the Acceptance Date and the provisions in any other plan,
program or arrangement providing for the issuance or grant of any other interest
in respect of the capital stock of the Company or any of the Company
Subsidiaries shall be of no further force and effect and shall be deemed to be
deleted as of the Acceptance Date and no holder of an Option or any participant
in any Company Stock Option Plan or any other plans, programs or arrangements
shall have any right thereunder to acquire any equity securities of the Company,
the Surviving Corporation (as hereinafter defined) or any Subsidiary thereof.
1.5 EMPLOYEE STOCK PURCHASE PLAN. The Company has taken appropriate
action to provide that (i) the current offering period under the Company's
Employee Stock Purchase Plan (the "STOCK PURCHASE PLAN") shall be terminated as
of the date hereof, (ii) each participant in the Stock Purchase Plan on the date
hereof shall be deemed to have exercised his or her Option (as defined in the
Stock Purchase Plan) on such date and shall acquire from the Company (A) such
number of whole shares of Company Common Stock as his or her accumulated payroll
deductions on such date will purchase at the Option Price (as defined in the
Stock Purchase Plan) (treating the last business day prior to the date hereof as
the "Exercise Date" for all purposes of the Stock Purchase Plan) and (B) cash in
the amount of any remaining balance in such participant's account, and (iii) the
Stock Purchase Plan shall be terminated effective as of the date hereof.
ARTICLE II
THE MERGER
2.1 THE MERGER. Subject to the terms and conditions of this Agreement, at
the Effective Time, the Company and Acquisition Sub shall consummate a merger
(the "MERGER") pursuant to which (a) Acquisition Sub shall be merged with and
into the Company and the separate corporate existence of Acquisition Sub shall
thereupon cease, (b) the Company shall be the successor or surviving corporation
in the Merger (sometimes referred to herein as the "SURVIVING CORPORATION") and
shall continue to be governed by the laws of the Commonwealth of Massachusetts,
and (c) the separate corporate existence of the Company with all its rights,
privileges, immunities, powers and franchises shall continue unaffected by the
Merger. The Articles of Organization, as in effect immediately prior to the
Effective Time, shall be the Articles of Organization of the Surviving
Corporation until thereafter amended as provided by law and such Articles of
Organization, and Bylaws of the Company (the "BYLAWS"), as in effect immediately
prior to the Effective Time, shall be the Bylaws of the Surviving Corporation
until thereafter amended as provided by law, by such Articles of Organization or
by such Bylaws. The Merger shall have the effects specified in the MGL.
2.2 EFFECTIVE TIME. As promptly as practicable after all of the
conditions set forth in Article VIII shall have been satisfied or, if
permissible, waived by the party entitled to the benefit of the same, the
Company shall duly execute and file articles of merger (the "ARTICLES
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OF MERGER") with the Secretary of State of the Commonwealth of Massachusetts
in accordance with the MGL. The Merger shall become effective at such time
as the Articles of Merger, accompanied by payment of the filing fee (as
provided in Chapter 156B, Section 114 of the MGL), have been examined by and
received the endorsed approval of the Secretary of State of the Commonwealth
of Massachusetts (the "EFFECTIVE TIME").
2.3 CLOSING. The closing of the Merger (the "CLOSING") shall take
place at such time and 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 VIII hereof (the "CLOSING DATE"), at
the offices of Goodwin, Procter & Hoar LLP, Exchange Place, Boston,
Massachusetts 02109, unless another date or place is agreed to by the parties
hereto.
2.4 DIRECTORS AND OFFICERS. The directors and officers of Acquisition Sub
immediately prior to the Effective Time shall, immediately after the Effective
Time, be the directors and officers of the Surviving Corporation, each to hold
office in accordance with the Articles of Organization and Bylaws of the
Surviving Corporation.
2.5 STOCKHOLDERS' MEETING. If required by applicable law in order to
consummate the Merger, the Company, acting through the Company Board, shall, in
accordance with applicable law:
(a) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "SPECIAL MEETING") as promptly as practicable following
the acceptance for payment and purchase of Shares by Acquisition Sub pursuant to
the Offer for the purpose of considering and taking action upon the approval of
the Merger and the adoption of this Agreement;
(b) prepare as promptly as practicable following the execution of
this Agreement, and file with the Commission as promptly as practicable
following the Expiration Date, a preliminary proxy or information statement
relating to the Merger and this Agreement and use its commercially reasonable
best efforts to obtain and furnish the information required to be included by
the Commission in the Proxy Statement (as hereinafter defined) and, after
consultation with Parent, to respond promptly to any comments made by the
Commission with respect to the preliminary proxy or information statement and
cause a definitive proxy or information statement, including any amendment or
supplement thereto (the "PROXY STATEMENT"), to be mailed to its stockholders,
provided that no amendment or supplement to the Proxy Statement will be made by
the Company without the consultation and approval of Parent and its counsel
(which shall not be unreasonably withheld), and to obtain the necessary
approvals of the Merger and this Agreement by its stockholders; and
(c) include in the Proxy Statement the recommendation of the Company
Board that stockholders of the Company vote in favor of the approval of the
Merger and the adoption of this Agreement.
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2.6 MERGER WITHOUT MEETING OF STOCKHOLDERS. Notwithstanding any provision
in this Agreement to the contrary, in the event that Acquisition Sub shall
acquire at least 90% of the outstanding shares of each class of capital stock of
the Company, pursuant to the Offer or otherwise, the parties hereto shall, at
the request of Parent and subject to Article VIII hereof, take all necessary and
appropriate action to cause the merger of the Company with and into Acquisition
Sub to become effective as soon as practicable after such acquisition, without a
meeting of stockholders of the Company, in accordance with Chapter 156B, Section
82 of the MGL.
2.7 CONVERSION OF SECURITIES. At the Effective Time, by virtue of the
Merger and without any further action on the part of Parent, Acquisition Sub,
the Company or the holders of any Shares:
(a) Each issued and outstanding Share held by the Company as a
treasury Share or held by any direct or indirect Company Subsidiary and each
issued and outstanding Share owned by Parent, Acquisition Sub or any other
direct or indirect Subsidiary of Parent (a "PARENT SUBSIDIARY") immediately
prior to the Effective Time, shall be canceled and retired and cease to exist
without any conversion thereof and no payment or distribution shall be made with
respect thereto;
(b) Each Share issued and outstanding immediately prior to the
Effective Time, other than (i) those Shares referred to in Section 2.7(a) and
(ii) Dissenting Shares (as hereinafter defined), shall be canceled and shall be
converted automatically into and represent the right to receive the kind and
amount of consideration (without interest) equal to the kind and amount of
consideration paid per Share pursuant to the Offer (the "MERGER CONSIDERATION"),
payable (without interest) to the holder of such Share upon surrender, in the
manner provided in Section 3.1, of the Certificate (as hereinafter defined) that
formerly evidenced such Share. All of the Certificates evidencing Shares, by
virtue of the Merger and without any action on the part of the stockholders of
the Company or the Company, shall be deemed to be no longer outstanding, shall
not be transferable on the books of the Surviving Corporation, and shall
represent solely the right to receive the amount set forth in this Section
2.7(b); and
(c) Each share of common stock, par value $.01 per share, of
Acquisition Sub issued and outstanding immediately prior to the Effective Time
shall be converted into one validly issued, fully paid and non-assessable share
of common stock, par value $1.00 per share, of the Surviving Corporation,
certificates for which shall be issued to the stockholders of Acquisition Sub on
a pro rata basis in accordance with their respective shares of Acquisition Sub
upon surrender to the Surviving Corporation of such stockholders' certificates
formerly representing such shares of Acquisition Sub.
2.8 TAKING OF NECESSARY ACTION; FURTHER ACTION. Each of Parent,
Acquisition Sub and the Company shall use its commercially reasonable best
efforts to take all such action as may be necessary or appropriate in order to
effectuate the Merger under the MGL as promptly as practicable following the
purchase of shares pursuant to the Offer. If at any time after the
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Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges,
powers and franchises of both of the Company and Acquisition Sub, the
officers of such corporations are fully authorized in the name of their
corporation or otherwise to take, and shall take, all such lawful and
necessary action.
ARTICLE III
PAYMENT FOR SHARES; DISSENTING SHARES
3.1 PAYMENT FOR SHARES OF COMPANY COMMON STOCK.
(a) Prior to the Effective Time, Parent shall designate a bank or
trust company to act as agent for the holders of the Shares in connection with
the Merger (the "PAYING AGENT") for purposes of effecting the exchange of
certificates for the Merger Consideration which, prior to the Effective Time,
represented Shares entitled to receive the Merger Consideration pursuant to
Section 2.7(b).
(b) From time to time before or after the Effective Time, as
necessary, Parent or Acquisition Sub shall deposit in trust with the Paying
Agent cash in an aggregate amount equal to the product of (i) the number of
Shares issued and outstanding immediately prior to the Effective Time (other
than shares owned by, or issuable upon conversion of other securities to, the
Company, Parent, Acquisition Sub or any direct or indirect Parent Subsidiary or
Company Subsidiary and Shares known immediately prior to the Effective Time to
be Dissenting Shares) (as hereinafter defined) and (ii) the Merger Consideration
(such aggregate amount being hereinafter referred to as the "PAYMENT FUND").
The Paying Agent shall, pursuant to irrevocable instructions, make the payments
referred to in Section 2.7(b) out of the Payment Fund.
(c) Promptly after the Effective Time, the Surviving Corporation
shall cause the Paying Agent to mail to each person who was a record holder of
an outstanding certificate or certificates which immediately prior to the
Effective Time represented Shares (the "CERTIFICATES"), whose Shares were
converted pursuant to Section 2.7(b) into the right to receive the Merger
Consideration, a letter of transmittal (which shall specify that delivery shall
be effected and risk of loss and title to Certificates shall pass, only upon
proper delivery of the Certificates to the Paying Agent and shall be in such
form and have such other provisions as Parent and the Surviving Corporation may
reasonably specify) and instructions for its use in surrendering Certificates in
exchange for payment of the Merger Consideration. Upon the surrender to the
Paying Agent of such a Certificate, together with such duly executed letter of
transmittal and any other required documents, the holder thereof shall be paid,
without interest thereon, the Merger Consideration to which such holder is
entitled hereunder, and such Certificate shall forthwith be canceled. Until so
surrendered, each such Certificate shall, after the Effective Time, represent
solely the right to receive the Merger Consideration into which the Shares such
Certificate theretofore represented shall have been converted pursuant to
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Section 2.7(b), and the holder thereof shall not be entitled to be paid any cash
to which such holder otherwise would be entitled. In case any payment pursuant
to this Section 3.1 is to be made to a holder other than the registered holder
of a surrendered Certificate, it shall be a condition of such payment that the
Certificate so surrendered shall be properly endorsed or otherwise in proper
form for transfer and that the person requesting such exchange shall pay to the
Paying Agent any transfer or other taxes required by reason of the payment of
such cash to a person other than the registered holder of the Certificate
surrendered, or that such person shall establish to the satisfaction of the
Paying Agent that such tax has been paid or is not applicable.
(d) Promptly following the date which is twelve months after the
Effective Time, the Paying Agent shall return to the Surviving Corporation all
cash, certificates and other instruments in its possession that constitute any
portion of the Payment Fund (including, without limitation, all interest and
other income received by the Paying Agent in respect of all funds made available
to it), and the Paying Agent's duties shall terminate. Thereafter, each holder
of a Certificate shall be entitled to look to the Surviving Corporation (subject
to applicable abandoned property, escheat and similar laws) only as a general
creditor thereof with respect to any Merger Consideration, without interest,
that may be payable upon due surrender of the Certificate or Certificates held
by them. Notwithstanding the foregoing, neither the Paying Agent nor any party
hereto shall be liable to a holder of Certificates that prior to the Effective
Time evidenced Shares for any Merger Consideration delivered pursuant hereto to
a public official pursuant to applicable abandoned property, escheat or other
similar laws.
(e) At the Effective Time, the Company Common Stock transfer books
shall be closed and no transfer of Shares shall be made thereafter. If, after
the Effective Time, Certificates are presented to the Surviving Corporation or
the Paying Agent, they shall be canceled and exchanged for the Merger
Consideration as provided in Section 2.7(b), subject to applicable law in the
case of Dissenting Shares.
(f) 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 Parent or
the Surviving Corporation, upon the posting by such person of a bond in such
amount as Parent or the Surviving Corporation may reasonably direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Paying Agent will issue in exchange for such lost, stolen or destroyed
Certificate, the cash representing the Merger Consideration deliverable in
respect thereof pursuant to this Agreement.
3.2 APPRAISAL RIGHTS.
(a) Notwithstanding anything in this Agreement to the contrary, any
Shares which are issued and outstanding immediately prior to the Effective Time
and which are held by stockholders of the Company who have filed with the
Company, before the taking of the vote of the stockholders of the Company to
approve this Agreement, written objections to such
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approval stating their intention to demand payment for such Shares, and who
have not voted such Shares in favor of the adoption of this Agreement
("DISSENTING SHARES") will not be converted as described in Section 2.7
hereof, but will thereafter constitute only the right to receive payment of
the fair value of such Shares in accordance with the applicable provisions of
Chapter 156B of the MGL (the "APPRAISAL RIGHTS PROVISIONS"); provided,
however, that all Shares held by stockholders who shall have failed to
perfect or who effectively shall have withdrawn or lost their rights to
appraisal of such Shares under the Appraisal Rights Provisions shall
thereupon be deemed to have been canceled and retired and to have been
converted, as of the Effective Time, into the right to receive the Merger
Consideration, without interest, in the manner provided in Section 2.7.
Persons who have perfected statutory rights with respect to Dissenting Shares
as aforesaid will not be paid by the Surviving Corporation as provided in
this Agreement and will have only such rights as are provided by the
Appraisal Rights Provisions with respect to such Dissenting Shares.
Notwithstanding anything in this Agreement to the contrary, if Acquisition
Sub abandons or is finally enjoined or prevented from carrying out, or the
stockholders rescind their adoption of, this Agreement, the right of each
holder of Dissenting Shares to receive the fair value of such Dissenting
Shares in accordance with the Appraisal Rights Provisions will terminate,
effective as of the time of such abandonment, injunction, prevention or
rescission.
(b) Each dissenting stockholder who becomes entitled under the MGL to
payment for Dissenting Shares shall receive payment therefor after the Effective
Time from the Surviving Corporation (but only after the amount thereof shall
have been agreed upon or finally determined pursuant to the MGL) and such
Dissenting Shares shall thereupon be canceled.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND ACQUISITION SUB
Parent and Acquisition Sub jointly and severally hereby represent and
warrant to the Company as follows:
4.1 ORGANIZATION. Except as set forth in Section 4.1 of the schedule
attached to this Agreement setting forth exceptions to Parent's and Acquisition
Sub's representations and warranties set forth herein, each of Parent and
Acquisition 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 corporate authority necessary 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 and authority would not reasonably be expected to have a Parent
Material Adverse Effect (as defined below). "PARENT MATERIAL ADVERSE EFFECT"
means any change or effect that has or would reasonably be expected to have a
material adverse effect on the business, results of operations or financial
condition of Parent and its Subsidiaries (the "PARENT SUBSIDIARIES") taken as a
whole.
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4.2 AUTHORIZATION; VALIDITY OF AGREEMENT; NECESSARY ACTION. Except as set
forth in Section 4.2 of the schedule attached to this Agreement setting forth
exceptions to Parent's and Acquisition Sub's representations and warranties set
forth herein, (i) each of Parent and Acquisition Sub has full corporate power
and authority to execute and deliver this Agreement and to consummate the
Transactions; (ii) the execution, delivery and performance by Parent and
Acquisition Sub of this Agreement and the consummation of the Transactions have
been duly authorized by the Board of Directors of Parent (the "PARENT BOARD")
and the Board of Directors of Acquisition Sub (the "ACQUISITION SUB BOARD") and
by Parent as the sole stockholder of Acquisition Sub, and no other corporate
action on the part of Parent and Acquisition Sub is necessary to authorize the
execution and delivery by Parent and Acquisition Sub of this Agreement and the
consummation of the Transactions; and (iii) this Agreement has been duly
executed and delivered by Parent and Acquisition Sub and, assuming due and valid
authorization, execution and delivery hereof by the Company, is a valid and
binding obligation of each of Parent and Acquisition Sub, as the case may be,
enforceable against each of them in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity.
4.3 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set forth in Section
4.3 of the schedule attached to this Agreement setting forth exceptions to
Parent's and Acquisition Sub's representations and warranties set forth herein
and except for filings, permits, authorizations, consents and approvals as may
be required under, and other applicable requirements of, the Exchange Act, the
HSR Act, and state securities or state "Blue Sky" laws, none of the execution,
delivery or performance of this Agreement by Parent or Acquisition Sub, the
consummation by Parent or Acquisition Sub of the Transactions or compliance by
Parent or Acquisition Sub with any of the provisions hereof will (i) conflict
with or result in any breach of any provision of the respective articles of
incorporation or organization or bylaws of Parent or Acquisition Sub, (ii)
require any filing with, or permit, authorization, consent or approval of, any
state, federal or foreign government or governmental authority or by any United
States, state or foreign court of competent jurisdiction (a "GOVERNMENTAL
ENTITY"), (iii) 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 Parent or any of
the Parent Subsidiaries listed in Section 4.3 of the Schedule attached to this
Agreement (the "MATERIAL PARENT SUBSIDIARIES") is a party or by which any of
them or any of their respective properties or assets may be bound, or (iv)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent, any of the Material Parent Subsidiaries or any of their
properties or assets, excluding from the foregoing clauses (ii), (iii) and (iv)
such violations, breaches or defaults which would not, individually or in the
aggregate, have a Parent Material Adverse Effect.
4.4 INFORMATION IN PROXY STATEMENT. None of the information supplied by
Parent or Acquisition Sub specifically for inclusion or incorporation by
reference in the Proxy Statement will, as of the date mailed to the Company's
stockholders and except as supplemented by Parent to reflect changes in
information so supplied at the time of any meeting of the
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Company's stockholders to be held in connection with the Merger, will 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.
4.5 REQUIRED FINANCING. Parent has a commitment for credit facilities in
place which, if funded, either alone or with cash presently on hand, (i) will
provide sufficient funds to enable Acquisition Sub to purchase and pay for the
Shares pursuant to the Offer and the Merger in accordance with the terms of this
Agreement and to consummate the Transactions and (ii) will cause Parent or
Acquisition Sub to have on the Initial Expiration Date and the Expiration Date,
and at the Effective Time, sufficient funds to purchase and pay for the Shares
pursuant to the Offer and the Merger, respectively, in accordance with the terms
of this Agreement. Neither Parent nor Acquisition Sub has any reason to believe
that any condition to such commitment cannot or will not be satisfied prior to
the Initial Expiration Date. Parent has provided to the Company a true,
complete and correct copy of the commitment letter, including any exhibits,
schedules or amendments thereto (collectively, the "Commitment Letter"),
relating to the financing for the purchase of the Shares pursuant to the Offer
and the Merger. Parent's and Acquisition Sub's commitment for credit facilities
permits, subject to the conditions specified therein, Parent and Acquisition Sub
to borrow money under such facilities and use such funds to purchase and pay for
the Shares pursuant to the Offer and the Merger in accordance with the terms of
this Agreement and to consummate the Transactions.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedules delivered at or prior to
the execution hereof to Parent and Acquisition Sub, which shall refer to the
relevant Sections of this Agreement (the "COMPANY DISCLOSURE SCHEDULE"), the
Company represents and warrants to Parent and Acquisition Sub as follows:
5.1 EXISTENCE; GOOD STANDING; AUTHORITY; COMPLIANCE WITH LAW.
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Massachusetts. Except as
set forth in Section 5.1 of the Company Disclosure Schedule, the Company is duly
licensed or qualified to do business as a foreign corporation and is in good
standing under the laws of any other state of the United States in which the
character of the properties owned or leased by it therein or in which the
transaction of its business makes such qualification necessary, except where the
failure to be so licensed or qualified would not have a Company Material Adverse
Effect (as defined below). "COMPANY MATERIAL ADVERSE EFFECT" means any change
or effect that has or would reasonably be expected to have a material adverse
effect on the business, results of operations or financial condition of the
Company and the Company Subsidiaries taken as a
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whole. The Company has all requisite corporate power and authority to own,
operate, lease and encumber its properties and carry on its business as now
conducted.
(b) Each of the Company Subsidiaries listed in Section 5.1 of the
Company Disclosure Schedule (the "MATERIAL COMPANY SUBSIDIARIES") is a
corporation, partnership or limited liability company (or similar entity or
association in the case of those Material Company Subsidiaries organized and
existing other than under the laws of a state of the United States) duly
incorporated or organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization, has the corporate or other
power and authority to own its properties and to carry on its business as it is
now being conducted, and is duly qualified to do business and is in good
standing in each jurisdiction in which the ownership of its property or the
conduct of its business requires such qualification, except for jurisdictions in
which such failure to be so qualified or to be in good standing would not have a
Company Material Adverse Effect.
(c) Neither the Company nor any of the Material Company Subsidiaries
is in violation of any order of any Governmental Entity or arbitration board or
tribunal, or any law, ordinance, governmental rule or regulation to which or by
which the Company or any Material Company Subsidiary or any of their respective
properties or assets is subject or bound, where such violation would have a
Company Material Adverse Effect. The Company and the Material Company
Subsidiaries have obtained all licenses, permits and other authorizations and
have taken all actions required by applicable law or governmental regulations in
connection with their businesses as now conducted, where the failure to obtain
any such license, permit or authorization or to take any such action would
reasonably be expected to have a Company Material Adverse Effect.
(d) Copies of the Articles of Organization and Bylaws, as currently
in effect, and the other charter documents, bylaws, organizational documents and
partnership, limited liability company and joint venture agreements, as
currently in effect, of the Company and each of the Company Subsidiaries are
listed in, and with respect to the Company and the Material Company
Subsidiaries, are attached to, Section 5.1 of the Company Disclosure Schedule.
5.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENTS. The Company has the
requisite power and authority to enter into and consummate the Transactions and
to execute, deliver and perform this Agreement. The Company Board has approved
this Agreement and the Transactions. In connection with the foregoing, the
Company Board has taken such actions and votes as are necessary on its part to
render the provisions of Chapter 110F of the MGL and all other applicable
takeover statutes inapplicable to this Agreement and the Transactions and to
comply with the director approval requirements of Article 6(c)2 of the Articles
of Organization. Subject only to the approval of this Agreement by the holders
of the Company Common Stock, if required, the execution and delivery by the
Company of this Agreement and consummation of the Transactions have been duly
authorized by all requisite corporate action on the part of the Company. This
Agreement, assuming due and valid authorization, execution and delivery thereof
by Parent and Acquisition Sub, constitutes a valid and legally binding
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obligation of the Company, enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights and general principles of equity.
5.3 CAPITALIZATION. The authorized capital stock of the Company
consists of 70,000,000 shares of Company Common Stock and 5,000,000 shares of
preferred stock, no par value per share, of the Company (the "COMPANY
PREFERRED STOCK"). As of the date of this Agreement, (i) 35,538,733 shares of
Company Common Stock were issued and outstanding, (ii) 1,129,229 shares of
Company Common Stock have been authorized and reserved for issuance and are
available for grant pursuant to the Company's stock option plans listed in
Section 5.3 of the Company Disclosure Schedule (the "COMPANY STOCK OPTION
PLANS"), subject to adjustment on the terms set forth in the Company Stock
Option Plans, (iii) 2,599,653 Options were outstanding under the Company
Stock Option Plans, (iv) 250,000 shares of Company Common Stock have been
authorized and reserved for issuance pursuant to the Stock Purchase Plan, (v)
no shares of Company Preferred Stock were issued and outstanding, (vi)
100,000 shares of Company Preferred Stock have been designated as "Series B
Junior Participating Cumulative Preferred Stock" and reserved for issuance
upon exercise of the rights (the "RIGHTS") issued pursuant to the Shareholder
Rights Agreement, dated as of October 21, 1998, by and between the Company
and State Street Bank and Trust Company (the "RIGHTS AGREEMENT"), and (vii)
1,513,987 shares of Company Common Stock and no shares of Company Preferred
Stock were held in the treasury of the Company. As of the date of this
Agreement, the Company had no shares of Company Common Stock issued and
outstanding or reserved for issuance other than as described above. All such
issued and outstanding shares of capital stock of the Company are duly
authorized, validly issued, fully paid, nonassessable and free of preemptive
rights. The Company has no outstanding bonds, debentures, notes or other
agreements or obligations the holders of which have the right to vote (or
which are convertible into or exercisable for securities having the right to
vote) with the stockholders of the Company on any matter. Except for the
Options (all of which have been issued under the Company Stock Option Plans)
and the Stock Purchase Plan, there are not at the date of this Agreement any
existing options, warrants, calls, subscriptions, convertible securities, or
other rights, agreements or commitments which obligate the Company to issue,
transfer or sell any shares of capital stock of the Company. Section 5.3 of
the Company Disclosure Schedule sets forth a full list of the Options,
including the name of the person to whom such Options have been granted, the
number of shares subject to each Option, the per share exercise price for
each Option and the vesting schedule for each Option. As of the Acceptance
Date, pursuant to the Company Stock Option Plans, the Options will be fully
vested and immediately exercisable. Except as set forth in Section 5.3 of
the Company Disclosure Schedule, there are no agreements or understandings to
which the Company or any Material Company Subsidiary is a party with respect
to the voting of any shares of capital stock of the Company or which restrict
the transfer of any such shares, nor does the Company have knowledge of any
third party agreements or understandings with respect to the voting of any
such shares or which restrict the transfer of any such shares. Except as set
forth in Section 5.3 of the Company Disclosure Schedule, there are no
outstanding contractual obligations of the Company or any Material Company
Subsidiary to repurchase, redeem or otherwise acquire any shares of capital
stock, partnership interests or any other securities of the Company or any
Material Company
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Subsidiary. Except as set forth in Section 5.3 of the Company Disclosure
Schedule, neither the Company nor any Material Company Subsidiary is under
any obligation, contingent or otherwise, by reason of any agreement to
register the offer and sale or resale of any of their securities under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "SECURITIES ACT").
5.4 SUBSIDIARIES. No Company Subsidiary that is not a Material Company
Subsidiary (i) is actively engaged in the conduct of any material business, (ii)
owns any material assets or interests or investments in any corporation,
partnership, limited liability company, joint venture, business trust or other
entity, or (iii) is subject to any material claims of third parties. Except as
set forth in Section 5.4 of the Company Disclosure Schedule, the Company owns
directly or indirectly each of the outstanding shares of capital stock or other
equity interest of each of the Material Company Subsidiaries. Each of the
outstanding shares of capital stock of each of the Material Company Subsidiaries
having corporate form is duly authorized, validly issued, fully paid and
nonassessable. Except as set forth in Section 5.4 of the Company Disclosure
Schedule, each of the outstanding shares of capital stock or other equity
interest of each of the Material Company Subsidiaries is owned, directly or
indirectly, by the Company free and clear of all liens, pledges, security
interests, claims or other encumbrances. The following information for each
Company Subsidiary is correctly set forth in Section 5.4 of the Company
Disclosure Schedule: (i) its name and jurisdiction of incorporation or
organization; (ii) its authorized capital stock, share capital or other equity
interest, to the extent applicable; and (iii) the name of each stockholder or
equity interest holder and the number of issued and outstanding shares of
capital stock, share capital or other equity interest held by it.
5.5 OTHER INTERESTS. Except as set forth in Section 5.5 of the Company
Disclosure Schedule, neither the Company nor any Material Company Subsidiary
owns directly or indirectly any interest or investment (whether equity or debt)
in any corporation, partnership, limited liability company, joint venture,
business, trust or other entity (other than investments in short-term investment
securities). Except as set forth in Section 5.5 of the Company Disclosure
Schedule, to the Company's knowledge, there is no material dispute among the
equity holders of any entity of which the Company and/or any Company Subsidiary
owns more than five percent, but less than all of the voting interests or voting
securities therein.
5.6 NO VIOLATION; CONSENTS. Except as set forth in Section 5.6 of the
Company Disclosure Schedule, neither the execution and delivery by the Company
of this Agreement nor consummation by the Company of the Transactions in
accordance with the terms hereof, will conflict with or result in a breach of
any provisions of the Articles of Organization or the Bylaws. Except as set
forth in Section 5.6 of the Company Disclosure Schedule, the execution and
delivery by the Company of this Agreement and consummation by the Company of the
Transactions in accordance with the terms hereof will not violate, or conflict
with, or result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination or in a right of termination or cancellation
of, or accelerate the performance required by, or result in the creation of any
lien, security interest, charge or encumbrance upon any of the properties of the
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Company or the Material Company Subsidiaries under, or result in being
declared void, voidable or without further binding effect, any of the terms,
conditions or provisions of (x) any note, bond, mortgage, indenture or deed
of trust or (y) any license, franchise, permit, lease, contract, agreement or
other instrument, commitment or obligation to which the Company or any of the
Material Company Subsidiaries is a party, or by which the Company or any of
the Material Company Subsidiaries or any of their properties is bound, except
as otherwise would not have a Company Material Adverse Effect. Other than
the filings provided for in Article II of this Agreement, the HSR Act, the
Exchange Act or applicable state securities and "Blue Sky" laws
(collectively, the "REGULATORY FILINGS"), the execution and delivery of this
Agreement by the Company does not, and the performance of this Agreement by
the Company and consummation of the Transactions does not, require any
consent, approval or authorization of, or declaration, filing or registration
with, any Governmental Entity or regulatory authority, except where the
failure to obtain any such consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Entity or
regulatory authority would not have a Company Material Adverse Effect or
significantly delay any of the Transactions. Except as set forth in Section
5.6 of the Company Disclosure Schedule, there are no material agreements to
which the Company or any Material Company Subsidiary is a party or to which
their respective assets may be bound that would result in a material change
in the rights or obligations of the parties thereto as a result of a change
in control of the Company as contemplated by this Agreement.
5.7 SEC DOCUMENTS. The Company has timely filed all required forms,
reports and documents with the Commission since May 31, 1995 (collectively,
the "COMPANY SEC REPORTS"), all of which were prepared in accordance with the
applicable requirements of the Exchange Act, the Securities Act and the rules
and regulations promulgated thereunder (the "SECURITIES LAWS"). All required
Company SEC Reports have been timely filed with the Commission and constitute
all forms, reports and documents required to be filed by the Company under
the Securities Laws since May 31, 1995. As of their respective dates, the
Company SEC Reports (i) complied as to form in all material respects with the
applicable requirements of the Securities Laws 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 to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. Each
of the consolidated balance sheets of the Company included in or incorporated
by reference into the Company SEC Reports (including the related notes and
schedules) fairly presents the consolidated financial position of the Company
and the Company Subsidiaries as of its date and each of the consolidated
statements of income, retained earnings and cash flows of the Company
included in or incorporated by reference into the Company SEC Reports
(including any related notes and schedules) fairly presents the results of
operations, retained earnings or cash flows, as the case may be, of the
Company and the Company Subsidiaries for the periods set forth therein
(subject, in the case of unaudited statements, to normal year-end audit
adjustments which were or will not be material in amount or effect), in each
case in accordance with generally accepted accounting principles consistently
applied during the periods involved, except as may be noted therein and
except, in the case of the unaudited statements, as permitted by Form 10-Q
pursuant to Section 13 or 15(d) of the Exchange Act.
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5.8 LITIGATION. Except as set forth in Section 5.8 of the Company
Disclosure Schedule, there is no litigation, suit, action or proceeding
pending or, to the knowledge of the Company, threatened against the Company
or any of the Company Subsidiaries, which, if adversely determined,
individually or in the aggregate with all such other litigation, suits,
actions or proceedings, would (i) have a Company Material Adverse Effect,
(ii) materially and adversely affect the Company's ability to perform its
obligations under this Agreement or (iii) prevent or significantly delay the
consummation of any of the Transactions. Except as set forth in Section 5.8
of the Company Disclosure Schedule, there is no writ, order, injunction,
ordinance, judgment or decree in effect or, to the knowledge of the Company,
threatened that would materially and adversely affect the Company's ability
to perform its obligations under this Agreement or prevent or significantly
delay the consummation of any of the Transactions.
5.9 ABSENCE OF CERTAIN CHANGES. Except as disclosed in Section 5.9 of
the Company Disclosure Schedule or in the Company SEC Reports filed with the
Commission prior to the date of this Agreement, since May 31, 1998, the
Company and the Material Company Subsidiaries have conducted their businesses
only in the ordinary course of business and there has not been: (i) as of
the date hereof, any declaration, setting aside or payment of any dividend or
other distribution with respect to the Company Common Stock; (ii) any
material commitment, contractual obligation (including, without limitation,
any management or franchise agreement, any lease (capital or otherwise) or
any letter of intent), borrowing, liability, guaranty, capital expenditure or
transaction (each, a "COMMITMENT") entered into by the Company or any of the
Material Company Subsidiaries outside the ordinary course of business except
for Commitments for expenses of attorneys, accountants and investment bankers
incurred in connection with the Transactions; or (iii) any material change in
the Company's accounting principles, practices or methods. Between February
28, 1999 and the date of this Agreement, there has not occurred any change or
effect concerning the Company or the Company Subsidiaries which has had or
would reasonably be expected to have a material adverse effect on the
business, operations or condition (financial or otherwise) of the Company and
the Company Subsidiaries taken as a whole.
5.10 TAXES.
(a) Except as set forth in Section 5.10 of the Company Disclosure
Schedule, each of the Company and the Material Company Subsidiaries (i) has
timely filed all Tax Returns (as defined below) which it was required to file
(after giving effect to any filing extension granted by a Governmental
Entity) and all such Tax Returns are accurate and complete in all material
respects, and (ii) has paid all Taxes (as defined below) shown on such Tax
Returns as required to be paid by it, except, in each case, where the failure
to file (or timely file) such Tax Returns or pay such Taxes would not have a
Company Material Adverse Effect. The most recent audited financial
statements contained in the Company's Annual Report on Form 10-K for the
fiscal year ended May 31, 1998 reflect, to the knowledge of the Company, an
adequate reserve for all material Taxes payable by the Company and the
Material Company Subsidiaries for all taxable periods and portions thereof
through the date of such financial statements. To the knowledge of the
Company, and except as set forth in Section 5.10 of the Company Disclosure
Schedule, no deficiencies for any Taxes have been proposed,
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asserted or assessed against the Company or any of the Material Company
Subsidiaries, and no requests for waivers of the time to assess any such
Taxes are pending. The Company has previously furnished to Parent (a)
correct and complete copies of all federal and material state or foreign Tax
Returns by the Company or any Material Company Subsidiary for taxable periods
ending on or after June 1, 1996, and (b) copies of all agreements that, to
the knowledge of the Company, under certain circumstances could obligate the
Company to make any payments that will not be deductible under Code Section
280G. Section 5.10 of the Company Disclosure Schedule lists all (A) Tax
sharing agreements, (B) all Tax Returns currently under audit (the "AUDITS")
and (C) agreements for extensions with Governmental Entities to which the
Company or any of the Material Company Subsidiaries is a party. Section 5.10
of the Company Disclosure Schedule discusses all material issues which have
been raised to date in the Audits.
(b) For purposes of this Agreement, "TAXES" means all federal,
state, local and foreign income, property, sales, use, franchise, employment,
withholding, excise and other taxes, tariffs or governmental charges of any
nature whatsoever, together with any interest, penalties or additions to Tax
with respect thereto.
(c) For purposes of this Agreement, "TAX RETURNS" means all
reports, returns, declarations, statements, schedules, attachments or other
information required to be supplied to a taxing authority in connection with
Taxes.
5.11 BOOKS AND RECORDS.
(a) The books of account and other financial records of the
Company and each of the Material Company Subsidiaries are true, complete and
correct in all material respects, have been maintained in accordance with
good business practices, and are accurately reflected in all material
respects in the financial statements included in the Company SEC Reports.
(b) The minute books and other records of the Company and each of
the Material Company Subsidiaries have been made available to Parent and
Acquisition Sub, contain in all material respects accurate records of all
meetings and accurately reflect in all material respects all other corporate
action of the stockholders and directors and any committees of the Company
Board and the boards of directors of each of the Material Company
Subsidiaries and all actions of the directors, partners or managers of each
of the Material Company Subsidiaries, as applicable.
5.12 PROPERTIES.
(a) All of the real estate properties owned or leased by the
Company or any of the Material Company Subsidiaries are set forth in Section
5.12 of the Company Disclosure Schedule. The Company has no ownership
interest in any real property other than the properties owned by the Company
or the Material Company Subsidiaries and set forth in Section 5.12 of the
Company Disclosure Schedule. Except as set forth in Section 5.12 of the
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Company Disclosure Schedule, the Company or such Material Company Subsidiary
owns fee simple title to each of the real properties identified in Section
5.12 of the Company Disclosure Schedule (the "COMPANY PROPERTIES"), free and
clear of any liens, mortgages or deeds of trust, claims against title,
charges which are liens, security interests or other encumbrances on title
(collectively, "ENCUMBRANCES"), and the Company Properties are not subject to
any easements, rights of way, covenants, conditions, restrictions or other
written agreements, laws, ordinances and regulations materially affecting
building use or occupancy, or reservations of an interest in title
(collectively, "PROPERTY RESTRICTIONS"), except for (i) Encumbrances,
Property Restrictions and other matters set forth in Section 5.12 of the
Company Disclosure Schedule, (ii) Property Restrictions imposed or
promulgated by law or any governmental body or authority with respect to real
property, including zoning regulations, that do not materially and adversely
affect the current or currently contemplated use of the property, materially
detract from the value of or materially interfere with the present or
currently contemplated use of the property, (iii) Encumbrances and Property
Restrictions disclosed on existing title policies or reports or current
surveys, and (iv) mechanics', carriers', suppliers', workmen's or repairmen's
liens and other Encumbrances, Property Restrictions and other limitations of
any kind, if any, which, individually or in the aggregate, are not material
in amount, do not materially detract from the value of or materially
interfere with the present use of any of the Company Properties subject
thereto or affected thereby, and do not otherwise materially impair business
operations conducted by the Company and the Material Company Subsidiaries and
which have arisen or been incurred only in the ordinary course of business.
Except as set forth in Section 5.12 of the Company Disclosure Schedule, (A)
no written notice of any material violation of any federal, state or
municipal law, ordinance, order, regulation or requirement affecting any
portion of any of the Company Properties has been issued to the Company by
any governmental authority; (B) to the Company's knowledge, there are no
material structural defects relating to any of the Company Properties; (C) to
the Company's knowledge, there is no Company Property whose building systems
are not in working order in any material respect; and (D) to the Company's
knowledge, there is no physical damage for which the Company is responsible
to any Company Property in excess of $250,000 for which there is no insurance
in effect covering the full cost of the restoration.
(b) Except as set forth in Section 5.12 of the Company Disclosure
Schedule, the Company and the Company Subsidiaries own good and marketable
title, free and clear of all Encumbrances, to all of the personal property
and assets shown on the Company's balance sheet at February 28, 1999 as
reflected in the Company SEC Reports (the "BALANCE SHEET") or acquired after
February 28, 1999, except for (A) assets which have been disposed of to
nonaffiliated third parties since May 31, 1998 in the ordinary course of
business, (B) Encumbrances reflected in the Balance Sheet, (C) Encumbrances
or imperfections of title which are not, individually or in the aggregate,
material in character, amount or extent and which do not materially detract
from the value or materially interfere with the present or presently
contemplated use of the assets subject thereto or affected thereby, and (D)
Encumbrances for current Taxes not yet due and payable. All of the
machinery, equipment and other tangible personal property and assets owned or
used by the Company and the Material Company Subsidiaries are, to the
Company's knowledge, (i) in good condition and
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repair, except for ordinary wear and tear not caused by neglect and (ii)
useable in the ordinary course of business of the Company or the Material
Company Subsidiaries.
5.13 INTELLECTUAL PROPERTY. To the knowledge of the Company, the
Company or the Material Company Subsidiaries is the owner of, or a licensee
under a valid license for, all items of intangible property which are
material to the business of the Company and the Material Company Subsidiaries
as currently conducted or contemplated, including, without limitation, trade
names, unregistered trademarks and service marks, brand names, domain names,
software, patents and copyrights. Except as disclosed in the Company SEC
Reports filed prior to the date of this Agreement or Section 5.13 of the
Company Disclosure Schedule, there are no claims pending or, to the Company's
knowledge, threatened, that the Company or any Material Company Subsidiary is
in violation of any material intellectual property right of any third party
which would have a Company Material Adverse Effect, and, to the knowledge of
the Company, no third party is in violation of any intellectual property
rights of the Company or any Material Company Subsidiary which would have a
Company Material Adverse Effect. Except as disclosed in the Company SEC
Reports filed prior to the date of this Agreement or Section 5.13 of the
Company Disclosure Schedule, neither the Company nor any Material Company
Subsidiary is violating or has violated the intellectual property rights of
any third party.
5.14 ENVIRONMENTAL MATTERS. The Company and the Material Company
Subsidiaries are in compliance with all Environmental Laws (as defined
below), except for any noncompliance that, either singly or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect.
As used in this Agreement, "ENVIRONMENTAL LAWS" shall mean all federal,
state, provincial, territorial, international and local laws, rules,
regulations, ordinances and orders that purport to regulate the release of
hazardous substances or other materials into the environment, or impose
requirements relating to environmental protection or human health. As used
in this Agreement, "HAZARDOUS MATERIALS" means any hazardous, toxic, noxious,
radioactive or infectious substance material, pollutant or waste as defined,
listed or regulated under any Environmental Law, and includes, without
limitation, petroleum oil and its fractions. Except as set forth in Section
5.14 of the Company Disclosure Schedule, there is no administrative or
judicial enforcement proceeding or, to the knowledge of the Company,
investigation pending, or threatened, against the Company or any Material
Company Subsidiary under any Environmental Law. Except as set forth in
Section 5.14 of the Company Disclosure Schedule, neither the Company nor any
Material Company Subsidiary or, to the knowledge of the Company, any legal
predecessor of the Company or any Material Company Subsidiary, has received
any written notice that it is actually or potentially responsible under any
Environmental Law for investigation, removal, remedial or other response
costs or natural resource damages or other damages from the release of a
Hazardous Material into the environment at any location. Except as set forth
in Section 5.14 of the Company Disclosure Schedule, neither the Company nor
any Material Company Subsidiary has transported or disposed of, or allowed or
arranged for any third party to transport or dispose of, any Hazardous
Materials at any location included on the National Priorities List, as
defined under the Comprehensive Environmental Response, Compensation, and
Liability Act, or any location proposed for inclusion on that list or at any
location proposed for inclusion on
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any analogous state list. Except as set forth in Section 5.14 of the Company
Disclosure Schedule, (i) the Company has no knowledge of any release on the
real property currently or previously owned or leased by the Company or any
Material Company Subsidiary or predecessor entity of Hazardous Materials in a
manner that could result in an order to perform a response action or in
material liability under the Environmental Laws, and (ii) to the Company's
knowledge, there is no hazardous waste treatment, storage or disposal
facility, underground storage tank, landfill, surface impoundment,
underground injection well, friable asbestos or PCB's, as those terms are
defined under the Environmental Laws, located at any of the real property
currently or previously owned or leased by the Company or any Material
Company Subsidiary or predecessor entity or facilities utilized by the
Company or the Material Company Subsidiaries, except which are either
permitted uses or have been adequately reserved for in the Company's
financial statements. Except as set forth in Section 5.14 of the Company
Disclosure Schedule, neither the Company nor any Company Subsidiary has
compromised or released any insurance policies that may provide coverage for
liabilities under Environmental Laws or liabilities or damages otherwise
arising out of the release of Hazardous Materials into the environment.
Except as set forth in Section 5.14 of the Company Disclosure Schedule,
neither the Company nor any Company Subsidiary has agreed to assume the
liability of any other person or entity for, nor has the Company or any
Company subsidiary agreed to indemnify any other person or entity against,
claims arising out of the release of Hazardous Materials into the environment
or other claims under Environmental Laws.
5.15 EMPLOYEE BENEFIT PLANS.
(a) Section 5.15 of the Company Disclosure Schedule sets forth a
list of every Company Benefit Plan (as hereinafter defined) that is
maintained by the Company or an Affiliate (as hereinafter defined) on the
date hereof.
(b) Each Company Benefit Plan which has been intended to qualify
under Section 401(a) of the Internal Revenue Code of 1986, as amended (the
"CODE"), has received a favorable determination or approval letter from the
Internal Revenue Service ("IRS") regarding its qualification covering all
legally required updates and any other plan amendments for which the remedial
amendment period has expired under such section and no such Company Benefit
Plan has been maintained in a manner that would preclude qualified status,
including, without limitation, any failure to adopt a legally required
amendment or comply with a legally required administrative procedure within
the time required. Each Company Benefit Plan which has been intended to
qualify under Code Sections 79, 105, 106, 125 or 127 is documented and has
been maintained in a manner that meets the applicable qualification
requirements in all material respects. No event has occurred relating to any
Company Benefit Plan that has caused (or to the knowledge of the Company or
any Affiliate, is likely to cause) any excise or penalty tax liability under
the Code for the Company or any Affiliate that would have a Company Material
Adverse Effect.
(c) With respect to any Company Benefit Plan, there has been no
(i) "prohibited transaction," as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Code Section
4975, for which an exemption
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is not available or (ii) material failure to comply with any provision of
ERISA, other applicable law, or any agreement, which, in either case, would
subject the Company or any Affiliate to liability (including, without
limitation, through any obligation of indemnification or contribution) for
any damages, penalties, or taxes, or any other material loss or expense that
would have a Company Material Adverse Effect. No litigation or governmental
administrative proceeding or investigation or other proceeding is pending or,
to the Company's knowledge, threatened with respect to any such Company
Benefit Plan.
(d) Neither the Company nor any Affiliate has incurred any
liability under Title IV of ERISA which has not been paid in full as of the
date of this Agreement. There has been no "accumulated funding deficiency"
(whether or not waived) with respect to any employee pension benefit plan
maintained by the Company or any Affiliate and subject to Code Section 412 or
ERISA Section 302. With respect to any Company Benefit Plan maintained by the
Company or any Affiliate and subject to Title IV of ERISA, there has been no
(other than as a result of the transactions contemplated by this Agreement)
(i) "reportable event," within the meaning of ERISA Section 4043 or the
regulations thereunder, for which the notice requirement is not waived by the
regulations thereunder, and (ii) event or condition which presents a material
risk of a plan termination or any other event that may cause the Company or
any Affiliate to incur liability or have a lien imposed on its assets under
Title IV of ERISA. Except as set forth in Section 5.15 of the Company
Disclosure Schedule, neither the Company nor any Affiliate has ever
maintained a Multiemployer Plan (as hereinafter defined) or a Multiple
Employer Plan (as hereinafter defined).
(e) With respect to each Company Benefit Plan, complete and
correct copies of the following documents (if applicable to such Company
Benefit Plan) have previously been delivered to Parent: (i) all documents
embodying or governing such Company Benefit Plan, and any funding medium for
such Company Benefit Plan (including, without limitation, trust agreements)
as they may have been amended to the date hereof; (ii) the most recent IRS
determination or approval letter with respect to such Company Benefit Plan
under Code Section 401(a), and any applications for determination or approval
subsequently filed with the IRS; (iii) the most recently filed IRS Form 5500,
with all applicable schedules and accountants' opinions attached thereto; and
(iv) the current summary plan description for such Company Benefit Plan (or
other descriptions of such Company Benefit Plan provided to employees) and
all modifications thereto.
(f) For purposes of this Section:
(i) "COMPANY BENEFIT PLAN" means (A) all employee benefit plans
within the meaning of ERISA Section 3(3) maintained by the Company or
any Affiliate, (B) all stock option plans and stock purchase plans and
(C) all executive severance arrangements that have payments or other
benefits triggered by a change of control;
(ii) An entity "MAINTAINS" a Company Benefit Plan if such entity
sponsors, contributes to, or provides benefits under or through such
Company
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Benefit Plan, or has any obligation (by agreement or under
applicable law) to contribute to or provide benefits under or through
such Company Benefit Plan, or if such Company Benefit Plan provides
benefits to or otherwise covers employees of such entity (or their
spouses, dependents, or beneficiaries);
(iii) An entity is an "AFFILIATE" of the Company for purposes of
this Section 5.15 if it would have ever been considered a single
employer with the Company under ERISA Section 4001(b) or part of the
same "controlled group" as the Company for purposes of ERISA Section
302(d)(8)(C); and
(iv) "MULTIEMPLOYER PLAN" means an employee pension or welfare
benefit plan to which more than one unaffiliated employer contributes
and which is maintained pursuant to one or more collective bargaining
agreements.
(v) "MULTIPLE EMPLOYER PLAN" means an employee pension or
welfare plan to which more than one unaffiliated employer contributes
and which is not a Multiemployer Plan.
5.16 LABOR MATTERS. Except as set forth in Section 5.16 of the Company
Disclosure Schedule, neither the Company nor any Material Company Subsidiary
is a party to, or bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor union
organization. There is no unfair labor practice or labor arbitration
proceeding or grievance pending or, to the knowledge of the Company,
threatened against the Company or any of the Material Company Subsidiaries
relating to their business, except for any such proceeding which would have a
Company Material Adverse Effect. To the Company's knowledge, there is no
labor strike, dispute, request for representation, slowdown or stoppage
pending or threatened against the Company or any Material Company Subsidiary.
To the Company's knowledge, there are no organizational efforts with respect
to the formation of a collective bargaining unit presently being made or
threatened involving employees of the Company or any of the Material Company
Subsidiaries. The Company and each Material Company Subsidiary has complied
in all material respects with all labor and employment laws, including
provisions thereof relating to wages, hours, equal opportunity, collective
bargaining and the payment of social security and other taxes, except as
otherwise would not reasonably be expected to have a Company Material Adverse
Effect.
5.17 NO BROKERS. Neither the Company nor any of the Company
Subsidiaries has entered into any contract, arrangement or understanding with
any person or firm which may result in the obligation of such entity or
Parent or Acquisition Sub to pay any finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations
leading to this Agreement or consummation of the Transactions, except that
the Company has retained Goldman, Sachs & Co. ("GOLDMAN SACHS") as its
financial advisor in connection with the Transactions. Other than the
foregoing arrangements and Parent's arrangements with Schroder & Co., Inc.,
the Company is not aware of any claim for payment of any finder's fees,
brokerage or agent's commissions or other like payments in connection with
the negotiations leading to this Agreement or consummation of the
Transactions.
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5.18 OPINION OF FINANCIAL ADVISOR. The Company has received the opinion
of Goldman Sachs to the effect that, as of the date hereof, the Offer Price
and the Merger Consideration are fair to the holders of the Company Common
Stock from a financial point of view and such opinion has not been
subsequently modified or withdrawn.
5.19 YEAR 2000. To the Company's knowledge, there are no impediments to
the Company being year 2000 compliant by December 31, 1999 (i.e., that
products, hardware, software and other date-sensitive equipment and systems
manufactured, sold, owned, licensed or used by the Company will be capable of
correctly processing date data (including, but not limited to, calculating,
comparing and sequencing) accurately prior to, during and after the calendar
year 2000 when used, assuming that all third party products, hardware,
software and other date-sensitive equipment and systems used in combination
therewith are capable of properly exchanging date data).
5.20 INSURANCE. The Company and the Material Company Subsidiaries are
covered by insurance in scope and amount customary and reasonable for the
businesses in which they are engaged. Except as disclosed in Section 5.20 of
the Company Disclosure Schedule, each insurance policy to which the Company
or any of the Material Company Subsidiaries is a party is in full force and
effect and will not require any consent as a result of the consummation of
the Transactions. Neither the Company nor any of the Material Company
Subsidiaries is in material breach or default (including with respect to the
payment of premiums or the giving of notices) under any insurance policy to
which it is a party, and no event has occurred which, with notice or the
lapse of time, would constitute such a material breach or default by the
Company or any of the Material Company Subsidiaries or would permit
termination, modification or acceleration, under such policies; and the
Company has not received any notice from the insurer disclaiming coverage or
reserving rights with respect to any material claim or any such policy in
general. Section 5.20 of the Company Disclosure Schedule contains a list of
all material insurance policies (i) insuring the business or properties of
the Company or the Company Subsidiaries or (ii) which provides insurance for
any director, officer, employee, fiduciary or agent of the Company or any of
the Company Subsidiaries, that is paid for or maintained by the Company or
any Company Subsidiary.
5.21 KEY CUSTOMERS. Schedule 5.21 of the Company Disclosure Schedule
sets forth a list of each customer that accounted for five percent or more of
the consolidated revenues of the Company and the Company Subsidiaries in the
year ended May 31, 1998. Except as set forth in Section 5.21 of the Company
Disclosure Schedule, the Company and the Material Company Subsidiaries have
no material pending disputes with any customers or notice of any intent of a
customer to terminate its business relationship with the Company or any of
the Material Company Subsidiaries which in the aggregate would have a Company
Material Adverse Effect.
5.22 PRODUCT QUALITY. The products sold by the Company and the Material
Company Subsidiaries prior to the date of this Agreement are not subject to
any general recall notice or Federal Aviation Administration airworthiness
directive which in the aggregate would have a Company Material Adverse
Effect.
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5.23 MATERIAL CONTRACTS AND AGREEMENTS. Neither the Company nor any
Material Company Subsidiary is in material default under any material
contract or agreement (and to the knowledge of the Company, no other party to
a material contract or agreement with the Company or any Material Company
Subsidiary is in material default or breach) which defaults, in the
aggregate, would have a Company Material Adverse Effect.
5.24 DEFINITION OF THE COMPANY'S KNOWLEDGE. As used in this Agreement,
the phrase "TO THE KNOWLEDGE OF THE COMPANY" or any similar phrase means the
actual (and not the constructive or imputed) knowledge of those individuals
identified in Section 5.24 of the Company Disclosure Schedule.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
6.1 CONDUCT OF BUSINESS BY THE COMPANY. During the period from the
date of this Agreement to the Effective Time, except as otherwise
contemplated by this Agreement, the Company shall use its commercially
reasonable best efforts to, and shall cause each of the Company Subsidiaries
to use its commercially reasonable best efforts to, carry on their respective
businesses in the usual, regular and ordinary course, consistent with the
requirements of law and past practice, and use their commercially reasonable
best efforts to preserve intact their present business organizations, keep
available the services of their present advisors, managers, officers and
employees and preserve their relationships with customers, suppliers,
licensors and others having business dealings with them and continue existing
contracts as in effect on the date hereof (for the term provided in such
contracts). Without limiting the generality of the foregoing, neither the
Company nor any of the Company Subsidiaries will (except as expressly
permitted by this Agreement or as contemplated by the Offer or the
Transactions contemplated hereby or to the extent that Parent shall otherwise
consent in writing):
(a) (i) declare, set aside or pay any dividend or other
distribution (whether in cash, stock, or property or any combination thereof)
in respect of any of its capital stock (other than dividends or other
distributions declared, set aside or paid by any wholly-owned Company
Subsidiary consistent with past practice), (ii) split, combine or reclassify
any of its capital stock or (iii) repurchase, redeem or otherwise acquire any
of its securities, except, in the case of clause (iii), for the acquisition
of Shares from holders of Options in full or partial payment of the exercise
price payable by such holders upon exercise of Options outstanding on the
date of this Agreement;
(b) authorize for issuance, issue, sell, deliver or agree or
commit to issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or
otherwise) any stock of any class or any other securities (including
indebtedness having the right to vote) or equity equivalents (including,
without
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limitation, stock appreciation rights) (other than the issuance of Shares
upon the exercise of Options outstanding on the date of this Agreement in
accordance with their present terms);
(c) acquire, sell, lease, encumber, transfer or dispose of any
assets outside the ordinary course of business which are material to the
Company or any of the Company Subsidiaries (whether by asset acquisition,
stock acquisition or otherwise), except pursuant to obligations in effect on
the date hereof or as set forth in Section 6.1 of the Company Disclosure
Schedule;
(d) (i) incur any amount of indebtedness for borrowed money,
guarantee any indebtedness, guarantee (or become liable for) any debt of
others, make any loans, advances or capital contributions, mortgage, pledge
or otherwise encumber any material assets, create or suffer any material lien
thereupon other than in the ordinary course of business consistent with prior
practice, (ii) incur any short-term indebtedness for borrowed money or (iii)
issue or sell debt securities or warrants or rights to acquire any debt
securities, except, in the case of clause (i) or (ii) above, pursuant to
credit facilities in existence on the date hereof in accordance with the
current terms of such credit facilities;
(e) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than any payment, discharge or satisfaction (i) in the
ordinary course of business consistent with past practice, or (ii) as
contemplated by the Transactions;
(f) change any of the accounting principles or practices used by
it (except as required by generally accepted accounting principles, in which
case written notice shall be provided to Parent and Acquisition Sub prior to
any such change);
(g) except as required by law, (i) enter into, adopt, amend or
terminate any Company Benefit Plan, (ii) enter into, adopt, amend or
terminate any agreement, arrangement, plan or policy between the Company or
any of the Company Subsidiaries and one or more of their directors or
officers, or (iii) except for normal increases in the ordinary course of
business consistent with past practice, increase in any manner the
compensation or fringe benefits of any director, officer or employee or pay
any benefit not required by any Company Benefit Plan or arrangement as in
effect as of the date hereof;
(h) adopt any amendments to the Articles of Organization, the
Bylaws or the Rights Agreement, except as expressly provided by the terms of
this Agreement;
(i) adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such a liquidation or a dissolution, merger,
consolidation, restructuring, recapitalization or reorganization (other than
plans of complete or partial liquidation or dissolution of inactive Company
Subsidiaries);
(j) settle or compromise any litigation (whether or not commenced
prior to the date of this Agreement) other than settlements or compromises of
litigation where the
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amount paid (after giving effect to insurance proceeds actually received) in
settlement or compromise does not exceed $250,000; or
(k) enter into an agreement to take any of the foregoing actions.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 OTHER FILINGS. As promptly as practicable, the Company, Parent and
Acquisition Sub each shall properly prepare and file any other filings required
under the Exchange Act or any other federal, state or foreign law relating to
the Merger and the Transactions (including filings, if any, required under the
HSR Act) (collectively, "OTHER FILINGS"). Each of Parent and the Company shall
promptly notify the other of the receipt of any comments on, or any request for
amendments or supplements to, any Other Filings by the Commission or any other
Governmental Entity or official, and each of the Company and Parent shall supply
the other with copies of all correspondence between it and each of its
Subsidiaries and representatives, on the one hand, and the Commission or the
members of its staff or any other appropriate Governmental Entity or official,
on the other hand, with respect to any Other Filings. The Company, Parent and
Acquisition Sub each shall use its respective commercially reasonable best
efforts to obtain and furnish the information required to be included in any
Other Filings. Parent and Acquisition Sub hereby covenant and agree to use
their respective commercially reasonable best efforts to secure termination of
any waiting periods under the HSR Act and obtain the approval of the Federal
Trade Commission (the "FTC") or any other Governmental Entity for the
Transactions, including, without limitation, promptly entering into good faith
negotiations with the FTC or other Governmental Entity to enter into a consent
decree or other arrangement as may be necessary to secure termination of such
waiting periods or obtain such other approval. Nothing in this Section 7.1
shall prevent, or be construed to prevent, Parent or Acquisition Sub from
agreeing to extend the waiting period under the HSR Act in connection with good
faith settlement negotiations with any Governmental Entity. Notwithstanding
anything to the contrary in this Agreement, Parent and Acquisition Sub shall use
their commercially reasonable best efforts to have any non-final Injunction (as
defined in Section 8.1(d)) stayed or reversed.
7.2 ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its commercially reasonable
best efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable to consummate and make
effective as promptly as practicable the Transactions contemplated by this
Agreement and to cooperate with each other in connection with the foregoing,
including the taking of such actions as are reasonably necessary to obtain any
necessary consents, approvals, orders, exemptions and authorizations by or from
any public or private third party, including, without limitation, any that are
required to be obtained under any federal, state, local or foreign law or
regulation or any contract, agreement or instrument to which the Company or any
Company Subsidiary is a party or by which any of their
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respective properties or assets are bound, to defend all lawsuits or other
legal proceedings challenging this Agreement or the consummation of the
Transactions, to cause to be lifted or rescinded any injunction or
restraining order or other order adversely affecting the ability of the
parties to consummate the Transactions, and to effect all necessary
registrations and Other Filings, including, but not limited to, filings under
the HSR Act, if any, and submissions of information requested by Governmental
Entities. For purposes of the foregoing sentence, the obligations of the
Company, Parent and Acquisition Sub to use their "commercially reasonable
best efforts" to obtain waivers, consents and approvals to loan agreements,
leases and other contracts shall not include any obligation to agree to an
adverse modification of the terms of such documents or to prepay or incur
additional obligations to such other parties.
7.3 FEES AND EXPENSES. Whether or not any of the Transactions are
consummated, all fees, costs and expenses incurred in connection with this
Agreement and the Transactions shall be paid by the party incurring such fees,
costs or expenses.
7.4 NO SOLICITATIONS.
(a) The Company will immediately cease any discussions or
negotiations with any parties that may be ongoing with respect to an Acquisition
Proposal (as defined below). Except as explicitly permitted hereunder, the
Company shall not, and shall not authorize or permit any of its officers,
directors or employees or any investment banker, financial advisor, attorney,
accountant or other representative, directly or indirectly, to, (i) solicit,
initiate or encourage (including by way of furnishing non-public information),
or take any other action to facilitate, any inquiries or the making of any
proposal that constitutes an Acquisition Proposal, or (ii) participate in any
discussions or negotiations regarding an Acquisition Proposal; provided,
however, that if the Company Board determines in good faith, after consultation
with counsel, that such action is necessary to comply with its fiduciary duties
to the Company's stockholders under applicable law, the Company, in response to
an Acquisition Proposal and in compliance with Section 7.4(e), may (i) furnish
non-public information with respect to the Company to the person who made such
Acquisition Proposal pursuant to a confidentiality agreement on terms no more
favorable to such person than the Confidentiality Agreement (as defined in
Section 7.6); provided that such confidentiality agreement need not include the
same standstill provisions as those contained in the Confidentiality Agreement,
it being understood that if there are no standstill provisions in such
confidentiality agreement or if such provisions are more favorable to the person
who made such Acquisition Proposal than those in the Confidentiality Agreement,
the Confidentiality Agreement shall be deemed amended to exclude the existing
standstill provision or include such more favorable provisions, as the case may
be, and (ii) may participate in negotiations regarding such Acquisition
Proposal.
(b) The Company Board shall not (i) withdraw or modify in a manner
adverse to Parent or Acquisition Sub its approval or recommendation of this
Agreement, the Offer or the Merger, (ii) approve or recommend an Acquisition
Proposal to its stockholders or (iii) cause the Company to enter into any
definitive acquisition agreement with respect to an Acquisition Proposal,
unless the Company Board (A) shall have determined in good faith, after
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consultation with counsel, that the Acquisition Proposal is a Superior
Proposal (as defined below) and such action is necessary to comply with its
fiduciary duties to the Company's stockholders under applicable law and (B)
in the case of clause (iii) above, complies with Section 9.1(c)(ii) hereof.
In the event that before the Acceptance Date the Company Board determines in
good faith, after consultation with counsel, that it is necessary to do so in
order to comply with its fiduciary duties to the Company's stockholders under
applicable law, the Company may enter into an agreement with respect to a
Superior Proposal, but only forty-eight hours after Parent's receipt of
written notice (i) advising Parent that the Company Board has received a
Superior Proposal and that the Company has elected to terminate this
Agreement pursuant to Section 9.1(c)(ii) of this Agreement and (ii) setting
forth such other information required to be included therein as provided in
Section 9.1(c)(ii) of this Agreement. If the Company enters into an
agreement with respect to a Superior Proposal, it shall have paid, to Parent
the Liquidated Amount (as defined below) in accordance with Section 9.2(b) of
this Agreement. For purposes of this Agreement, a "SUPERIOR PROPOSAL" means
a bona fide Acquisition Proposal to acquire two thirds or more of the Shares
then outstanding or all or substantially all of the assets of the Company and
the Company Subsidiaries on terms which the Company Board determines in its
good faith judgement (after consultation with Goldman Sachs or another
financial advisor of nationally recognized reputation) to be more favorable
to the Company's stockholders than the Offer and the Merger.
(c) Nothing contained in this Section 7.4 shall prohibit the
Company from at any time disclosing information to its stockholders as
required by Rule 14e-2 promulgated under the Exchange Act.
(d) As used in this Agreement, the term "ACQUISITION PROPOSAL"
shall mean any proposed or actual (i) acquisition, merger, consolidation or
similar transaction involving the Company, (ii) sale, lease or other
disposition, directly or indirectly, by merger, consolidation, share exchange
or otherwise, of any assets of the Company or the Company Subsidiaries
representing 15% or more of the consolidated assets of the Company and the
Company Subsidiaries, (iii) issue, sale or other disposition of (including by
way of merger, consolidation, share exchange or any similar transaction)
securities (or options, rights or warrants to purchase, or securities
convertible into, such securities) representing 15% or more of the votes
associated with the outstanding securities of the Company, (iv) transaction
in which any person shall acquire beneficial ownership (as such term is
defined in Rule 13d-3 under the Exchange Act), or the right to acquire
beneficial ownership, or any "group" (as such term is defined under the
Exchange Act) shall have been formed which beneficially owns or has the right
to acquire beneficial ownership of, 15% or more of the outstanding Shares,
(v) recapitalization, restructuring, liquidation, dissolution, or other
similar type of transaction with respect to the Company or (vi) transaction
which is similar in form, substance or purpose to any of the foregoing
transactions; provided, however, that the term "Acquisition Proposal" shall
not include the Offer, the Merger and the Transactions.
(e) The Company will within 24 hours notify Parent of its receipt
of an Acquisition Proposal and the material terms and conditions of such
Acquisition Proposal. Notwithstanding anything to the contrary in this
Agreement, except as provided in Sections
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9.1(c)(ii) and 7.4(b), the Company shall have no duty to notify or update
Parent or Acquisition Sub on the status of discussions or negotiations
(including the status of such Acquisition Proposal or any amendments or
proposed amendments thereto) between the Company and the person making the
Acquisition Proposal.
7.5 OFFICERS' AND DIRECTORS' INDEMNIFICATION.
(a) In the event of any threatened or actual claim, action, suit,
proceeding or investigation, whether civil, criminal or administrative,
including, without limitation, any such claim, action, suit, proceeding or
investigation in which any person who is now, or has been at any time prior
to the date hereof, or who becomes prior to the Effective Time, a director,
officer, employee, fiduciary or agent of the Company or any of the Company
Subsidiaries (the "INDEMNIFIED PARTIES") is, or is threatened to be, made a
party based in whole or in part on, or arising in whole or in part out of,
or, pertaining to (i) the fact that he is or was a director, officer,
employee, fiduciary or agent of the Company or any of the Company
Subsidiaries, or is or was serving at the request of the Company or any of
the Company Subsidiaries as a director, officer, employee, fiduciary or agent
of another corporation, partnership, joint venture, trust or other
enterprise, or (ii) the negotiation, execution or performance of this
Agreement or any of the transactions contemplated hereby, whether in any case
asserted or arising before or after the Effective Time, the parties hereto
agree to cooperate and use their commercially reasonable best efforts to
defend against and respond thereto. It is understood and agreed that the
Company shall indemnify and hold harmless, and after the Effective Time the
Surviving Corporation and Parent shall indemnify and hold harmless, as and to
the full extent permitted by applicable law, each Indemnified Party against
any losses, claims, damages, liabilities, costs, expenses (including
reasonable attorneys' fees and expenses), judgments, fines and amounts paid
in settlement in connection with any such threatened or actual claim, action,
suit, proceeding or investigation, and in the event of any such threatened or
actual claim, action, suit, proceeding or investigation (whether asserted or
arising before or after the Effective Time), (A) the Company, and the
Surviving Corporation and Parent after the Effective Time, shall promptly pay
reasonable expenses in advance of the final disposition of any claim, suit,
proceeding or investigation to each Indemnified Party to the full extent
permitted by law, (B) the Indemnified Parties may retain counsel satisfactory
to them, and the Company, and the Surviving Corporation and Parent after the
Effective Time, shall pay all reasonable fees and expenses of such counsel
for the Indemnified Parties within 30 days after statements therefor are
received, and (C) the Company, the Surviving Corporation and Parent will use
their respective commercially reasonable best efforts to assist in the
vigorous defense of any such matter; provided that none of the Company, the
Surviving Corporation or Parent shall be liable for any settlement effected
without its prior written consent (which consent shall not be unreasonably
withheld); and provided further that the Surviving Corporation and Parent
shall have no obligation hereunder to any Indemnified Party when and if a
court of competent jurisdiction shall ultimately determine, and such
determination shall have become final and non-appealable, that
indemnification of such Indemnified Party in the manner contemplated hereby
is prohibited by applicable law (whereupon any advances received shall be
repaid to the Parent or the Surviving Corporation). Any Indemnified Party
wishing to claim indemnification under this Section 7.5, upon learning of any
such claim, action, suit, proceeding or
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investigation, shall notify the Company and, after the Effective Time, the
Surviving Corporation and Parent, thereof; provided that the failure to so
notify shall not affect the obligations of the Company, the Surviving
Corporation and Parent except to the extent such failure to notify materially
prejudices such party.
(b) Parent and Acquisition Sub agree that all rights to
indemnification existing in favor of, and all limitations on the personal
liability of, the directors, officers, employees and agents of the Company
and the Company Subsidiaries provided for in the Articles of Organization or
Bylaws as in effect as of the date hereof with respect to matters occurring
prior to the Effective Time, and including the Offer and the Merger, shall
continue in full force and effect for a period of not less than six years
from the Effective Time; provided, however, that all rights to
indemnification in respect of any claims (each a "CLAIM") asserted or made
within such period shall continue until the disposition of such Claim. Prior
to the Effective Time, the Company shall purchase an extended reporting
period endorsement under the Company's existing directors' and officers'
liability insurance coverage for the Company's directors and officers in a
form acceptable to the Company which shall provide such directors and
officers with coverage for six years following the Effective Time of not less
than the existing coverage under, and have other terms not materially less
favorable to, the insured persons than the directors' and officers' liability
insurance coverage presently maintained by the Company.
(c) This Section 7.5 is intended for the irrevocable benefit of,
and to grant third party rights to, the Indemnified Parties and shall be
binding on all successors and assigns of Parent, the Company and the
Surviving Corporation. Each of the Indemnified Parties shall be entitled to
enforce the covenants contained in this Section 7.5.
(d) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person
or entity 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 or entity, then,
and in each such case, proper provision shall be made so that the successors
and assigns of the Surviving Corporation assume the obligations set forth in
this Section 7.5.
7.6 ACCESS TO INFORMATION; CONFIDENTIALITY. From the date hereof until
the Effective Time, the Company shall, and shall cause each of the Company
Subsidiaries and each of the Company's and Company Subsidiaries' officers,
employees and agents to, afford to Parent and to the officers, employees and
agents of Parent complete access at all reasonable times to such officers,
employees, agents, properties, books, records and contracts, and shall
furnish Parent such financial, operating and other data and information as
Parent may reasonably request. Prior to the Effective Time, Parent and
Acquisition Sub shall hold in confidence all such information on the terms
and subject to the conditions contained in that certain confidentiality
agreement between Parent and the Company dated March 26, 1999 (the
"CONFIDENTIALITY AGREEMENT"). The Company hereby waives the provisions of
the Confidentiality Agreement as and to the extent necessary to permit the
making and consummation of the Transactions. At the Effective Time, such
Confidentiality Agreement shall terminate.
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7.7 FINANCIAL AND OTHER STATEMENTS. Notwithstanding anything contained
in Section 7.6, during the term of this Agreement, the Company shall also
provide to Parent the following documents and information:
(a) As soon as reasonably available, but in no event more than 45
days after the end of each fiscal quarter ending after the date of this
Agreement, the Company will deliver to Parent its Quarterly Report on Form
10-Q as filed under the Exchange Act. As soon as reasonably available, but
in no event more than 90 days after the end of each fiscal year ending after
the date of this Agreement, the Company will deliver to Parent its Annual
Report on Form 10-K as filed under the Exchange Act. The Company will also
deliver to Parent, contemporaneously with its being filed with the
Commission, a copy of each Current Report on Form 8-K.
(b) Promptly upon receipt thereof, the Company will furnish to
Parent copies of all internal control reports submitted to the Company or any
Company Subsidiary by independent accountants in connection with each annual,
interim or special audit of the books of the Company or any such Company
Subsidiary made by such accountants.
(c) As soon as practicable, the Company will furnish to Parent
copies of all such financial statements and reports as it or any Company
Subsidiary shall send to its stockholders, the Commission or any other
regulatory authority, to the extent any such reports furnished to any such
regulatory authority are not confidential and except as legally prohibited
thereby.
7.8 PUBLIC ANNOUNCEMENTS. The Company and Parent shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or any of the Transactions and
shall not issue any such press release or make any such public statement
without the prior consent of the other party, which consent shall not be
unreasonably withheld; provided, however, that a party may, without the prior
consent of the other party, issue such press release or make such public
statement as may be required by law or the applicable rules of any stock
exchange if it has used its commercially reasonable best efforts to consult
with the other party and to obtain such party's consent but has been unable
to do so in a timely manner.
7.9 EMPLOYEE BENEFIT ARRANGEMENTS.
(a) After the Closing, Parent shall cause the Surviving
Corporation to honor all obligations under (i) the existing terms of the
employment and severance agreements to which the Company or any Company
Subsidiary is presently a party, except as may otherwise be agreed to by the
parties thereto, and (ii) the Company's and any Company Subsidiary's general
severance policy as set forth in Section 7.9 of the Company Disclosure
Schedule. For a period of six months following the Effective Time (the
"TRANSITION PERIOD"), employees of the Surviving Corporation will continue to
participate in the Company Benefit Plans (other than deferred compensation
plans, stock option plans or employee stock purchase plans
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or other employer stock match or other employer stock related provisions) on
substantially similar terms to those currently in effect. For a period of 18
months following the expiration of the Transition Period, the Surviving
Corporation's employees will be entitled to participate in employee benefit
plans, the terms of which will be similar in material respects in the
aggregate to the Company Benefit Plans as in effect on the date hereof (other
than deferred compensation plans, stock option plans or employee stock
purchase plans or other employer stock match or other employer stock related
provisions).
(b) After the Closing, Parent shall cause the Surviving
Corporation to honor all obligations which accrued prior to the Effective
Time under the Company's deferred compensation plans. Except as is otherwise
required by the existing terms of employment and severance agreements to
which the Company is presently a party, future accruals may be (but are not
required to be) provided for under any such plan(s) or under any similar
plan(s) of the Surviving Corporation or Parent. Except as is otherwise
required by the existing terms of employment and severance agreements to
which the Company is a presently party, if future accruals are not provided
for with respect to any current employee participant in such plan as of the
Effective Time, and such person remains an employee of the Company or the
Surviving Corporation or Parent, the person's continuing employment in such
capacity shall be counted for purposes of vesting (but not for purposes of
benefit accrual) under such plan. Except as is otherwise required by the
existing terms of employment and severance agreements to which the Company is
a party, transfer of employment from the Company to the Surviving Corporation
or to the Parent or to an affiliate of the Parent shall not constitute a
termination of employment for purposes of payment of benefits under any such
plan.
(c) If any employee of the Company or any of the Company
Subsidiaries becomes a participant in any employee benefit plan, practice or
policy of Parent, any of its affiliates or the Surviving Corporation, such
employee shall be given credit under such plan for all service prior to the
Effective Time with the Company and the Company Subsidiaries and prior to the
time such employee becomes such a participant, for purposes of eligibility
(including, without limitation, waiting periods) and vesting but not for any
other purposes for which such service is either taken into account or
recognized (including, without limitation, benefit accrual); provided,
however, that such employees will be given credit for such service for
purposes of any vacation policy. In addition, if any employees of the
Company or any of the Company Subsidiaries employed as of the Closing Date
become covered by a medical plan of Parent, any of its affiliates or the
Surviving Corporation, such medical plan shall not impose any exclusion on
coverage for preexisting medical conditions with respect to these employees.
7.10 RIGHTS AGREEMENT. The Company Board has amended the Rights
Agreement prior to the execution of this Agreement (i) so that neither the
execution nor the delivery of this Agreement will trigger or otherwise affect
any rights or obligations under the Rights Agreement, including causing the
occurrence of a "Distribution Date" or a "Stock Acquisition Date," as defined
in the Rights Agreement, and (ii) to terminate the Rights Plan immediately
upon the Effective Time.
7.11 STATUS OF FINANCING. Parent and Acquisition Sub shall keep the
Company
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informed of the status of their financing arrangements for the Transactions,
including providing written notice to the Company as promptly as possible
(but in any event within 24 hours after obtaining knowledge thereof) with
respect to (i) any facts of circumstances which reasonable indicate that the
Lenders (as defined in the Commitment Letter) may be unable to provide the
financing contemplated by the Commitment Letter, (ii) the prospective
inability of Parent or Acquisition Sub to satisfy any of the conditions set
forth in the Commitment Letter, and (iii) any material adverse developments
relating to the availability of the financing contemplated by the Commitment
Letter.
ARTICLE VIII
CONDITIONS TO THE MERGER
8.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment or waiver, where permissible, at or prior to the Closing Date,
of each of the following conditions:
(a) STOCKHOLDER APPROVAL. If required by applicable law, this
Agreement and the Transactions, including the Merger, shall have been approved
and adopted by the affirmative vote of the stockholders of the Company to the
extent required by the MGL and the Articles of Organization.
(b) HART-SCOTT-RODINO ACT. Any waiting period (and any extension
thereof) applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated.
(c) OTHER REGULATORY APPROVALS. All necessary approvals,
authorizations and consents of any governmental or regulatory entity required to
consummate the Merger shall have been obtained and remain in full force and
effect, and all waiting periods relating to such approvals, authorizations and
consents shall have expired or been terminated, except where such failure would
not have a Company Material Adverse Effect or a Parent Material Adverse Effect,
as the case may be, or would not be reasonably likely to affect adversely the
ability of the Company or Acquisition Sub, as the case may be, to consummate the
Merger.
(d) NO INJUNCTIONS, ORDERS OR RESTRAINTS; ILLEGALITY. No preliminary
or permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission (an "INJUNCTION") nor any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority shall be in effect
which would (i) make the consummation of the Merger illegal, or (ii) otherwise
restrict, prevent or prohibit the consummation of any of the Transactions,
including the Merger.
(e) PURCHASE OF SHARES IN OFFER. Parent, Acquisition Sub or their
affiliates shall have purchased Shares pursuant to the Offer.
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after stockholder approval thereof:
(a) by the mutual written consent of Parent or Acquisition Sub and
the Company.
(b) by either of the Company or Parent or Acquisition Sub:
(i) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action (which order, decree, ruling or
other action the parties hereto shall use their commercially reasonable
best efforts to lift), which permanently restrains, enjoins or otherwise
prohibits the acceptance for payment of, or payment for, Shares pursuant to
the Offer or the Merger; or
(ii) if, without any material breach by the terminating party of
its obligations under this Agreement, Parent or Acquisition Sub shall not
have purchased Shares pursuant to the Offer on or prior to the later of (i)
the Final Expiration Date or (ii) the HSR Expiration Date (if applicable).
(c) by the Company:
(i) if Parent or Acquisition Sub shall have failed to commence
the Offer on or prior to five business days following the date of the
initial public announcement of the Offer; or
(ii) in connection with entering into a definitive agreement to
effect a Superior Proposal in accordance with Section 7.4(b) hereof;
provided, however, that prior to terminating this Agreement pursuant to
this Section 9.1(c)(ii), (A) the Company shall have paid the Liquidated
Amount, as set forth in Section 9.2(b), and (B) the Company shall have
provided Acquisition Sub with 48 hours prior written notice of the
Company's decision to so terminate. Such notice shall indicate in
reasonable detail the material terms and conditions of such Superior
Proposal, including, without limitation, the amount and form of the
proposed consideration and whether such Superior Proposal is subject to any
material conditions; or
(iii) if Parent or Acquisition Sub shall have breached in any
material respect any of their respective representations, warranties,
covenants or other agreements contained in this Agreement, which breach
cannot be or has not been cured within 15 days after the giving of written
notice to Parent or Acquisition Sub except, in
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any case, for such breaches which are not reasonably likely to affect
adversely Parent's or Acquisition Sub's ability to consummate the Offer or
the Merger; provided, however, that no cure period shall be applicable
under any circumstances to the matters set forth in Section 9.1(c)(i).
(d) by Parent or Acquisition Sub if, prior to the purchase of Shares
pursuant to the Offer:
(i) the Company shall have breached any representation or
warranty or failed to have performed any covenant or other agreement
contained in this Agreement which breach or failure to perform (A)
would give rise to the failure of a condition set forth in ANNEX A
hereto, and (B) cannot be or has not been cured within 15 days after
the giving of written notice to the Company; or
(ii) (A) the Company Board shall withdraw, modify or change its
recommendation or approval in respect of this Agreement or the Offer
in a manner adverse to Parent, (B) the Company Board shall recommend
any proposal other than by Parent and Acquisition Sub in respect of an
Acquisition Proposal or (C) the Company shall have exercised a right
with respect to an Acquisition Proposal and shall, directly or through
its representatives, continue discussions with any third party
concerning such Acquisition Proposal for more than 20 business days
after the date of receipt of such Acquisition Proposal.
9.2 EFFECT OF TERMINATION.
(a) In the event of the termination of this Agreement pursuant to
Section 9.1 hereof, this Agreement shall forthwith become null and void and have
no effect, without any liability on the part of any party hereto or its
affiliates, trustees, directors, officers or stockholders and all rights and
obligations of any party hereto shall cease except for the agreements contained
in Sections 7.3 and 7.6, this Section 9.2 and Article X; provided, however, that
nothing contained in this Section 9.2 shall relieve any party from liability for
any fraud or willful breach of this Agreement.
(b) If the Company terminates this Agreement in accordance with
Section 9.1(c)(ii), then the Company shall concurrently pay to Parent an amount
in cash equal to $25,000,000 (the "LIQUIDATED AMOUNT"). If any of the
circumstances described in Section 9.1(d)(i) (if such breach or failure relates
to the Company's obligations under Section 7.4 of this Agreement) or Section
9.1(d)(ii) hereof shall have occurred and within 9 months thereafter the Company
shall have entered into a definitive agreement to consummate an acquisition
pursuant to an Acquisition Proposal, then the Company shall pay to Parent
concurrently with the consummation of the acquisition contemplated by the
Acquisition Proposal, the Liquidated Amount.
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(c) Any payment required by this Section 9.2 shall be payable by the
Company to Parent by wire transfer of immediately available funds to an account
designated by Parent.
(d) Notwithstanding anything to the contrary in this Agreement,
Parent and Acquisition Sub hereto expressly acknowledge and agree that, with
respect to any termination of this Agreement pursuant to Section 9.1(c)(ii)
hereof, the payment of the Liquidated Amount shall constitute liquidated damages
with respect to any claim for damages or any other claim which Parent or
Acquisition Sub would otherwise be entitled to assert against the Company or any
of the Company Subsidiaries or any of their respective assets, or against any of
their respective directors, officers, employees, partners, managers, members or
shareholders, with respect to this Agreement and the Transactions and shall
constitute the sole and exclusive remedy available to Parent and Acquisition
Sub. The parties hereto expressly acknowledge and agree that, in light of the
difficulty of accurately determining actual damages with respect to the
foregoing upon any termination of this Agreement pursuant to Section 9.1(c)(ii)
hereof, the rights to payment under Section 9.2(b): (i) constitute a reasonable
estimate of the damages that will be suffered by reason of any such proposed or
actual termination of this Agreement pursuant to Section 9.1(c)(ii) hereof and
(ii) shall be in full and complete satisfaction of any and all damages arising
as a result of the foregoing. Except for nonpayment of the amounts set forth in
Section 9.2(b), Parent and Acquisition Sub hereby agree that, upon any
termination of this Agreement pursuant to Section 9.1(c)(ii) hereof, in no event
shall Parent or Acquisition Sub be entitled to seek or to obtain any recovery or
judgment against the Company or any of the Company Subsidiaries or any of their
respective assets, or against any of their respective directors, officers,
employees, partners, managers, members or shareholders, and in no event shall
Parent or Acquisition Sub be entitled to seek or obtain any other damages of any
kind, including, without limitation, consequential, indirect or punitive
damages.
9.3 AMENDMENT. This Agreement may be amended by the parties hereto by an
instrument in writing signed on behalf of each of the parties hereto at any time
before or after any approval hereof by the stockholders of the Company and
Acquisition Sub, but in any event following authorization by the Acquisition Sub
Board and the Company Board; provided, however, that after any such stockholder
approval, no amendment shall be made which by law requires further approval by
stockholders without obtaining such approval.
9.4 EXTENSION; WAIVER. At any time prior to the Closing, the parties
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
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ARTICLE X
GENERAL PROVISIONS
10.1 NOTICES. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
as of the date delivered or sent if delivered personally or sent by telecopier
(which is confirmed) or sent by prepaid overnight carrier to the parties at the
following addresses (or at such other addresses as shall be specified by the
parties by like notice) (provided that with respect to any notice required to be
given within 48 hours or less notice shall be deemed given when actually
received):
(a) if to Parent or Acquisition Sub:
Precision Castparts Corp.
4650 SW Macadum Avenue
Suite 440
Portland, OR 97201-4254
Attn: William D. Larsson
Telecopy No.: (503) 417-4817
with a copy to:
Stoel Rives LLP
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204-1268
Attn: Ruth A. Beyer
Telecopy No.: (503) 220-2480
(b) if to the Company:
Wyman-Gordon Company
244 Worcester Street
Box 8001
North Grafton, MA 01536-8001
Attn: Wallace F. Whitney, Jr., Esq.
Telecopy No.: (508) 839-7564
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with a copy to:
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Attn: David F. Dietz, P.C.
Joseph L. Johnson III, P.C.
Telecopy No.: (617) 523-1231
10.2 INTERPRETATION. When a reference is made in this Agreement to
subsidiaries of Parent, Acquisition Sub or the Company, the word "SUBSIDIARY"
means any corporation more than 50% of whose outstanding voting securities, or
any partnership, joint venture or other entity more than 50% of whose total
equity interest, is directly or indirectly owned by Parent, Acquisition Sub or
the Company, as the case may be. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.3 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.
Except for Sections 3.1, 7.3, 7.5 and 7.9, the last sentence of Section 2.8 and
Article X, none of the representations, warranties, covenants and agreements
contained in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time, and thereafter there shall be no
liability on the part of either Parent, Acquisition Sub or the Company or any of
their respective officers, directors or stockholders in respect thereof. Except
as expressly set forth in this Agreement, there are no representations or
warranties of any party hereto, express or implied.
10.4 MISCELLANEOUS. This Agreement (i) constitutes, together with the
exhibits hereto, the Confidentiality Agreement, ANNEX A hereto, the Company
Disclosure Schedule and the schedule referred to in Article IV hereof, the
entire agreement and supersedes all of the prior agreements and understandings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof, (ii) shall be binding upon and inure to the benefits of
the parties hereto and their respective permitted successors and assigns and is
not intended to confer upon any other person (except as set forth below) any
rights or remedies hereunder and (iii) may be executed in two or more
counterparts which together shall constitute a single agreement. Section 7.5
and Section 7.9 are intended to be for the benefit of those persons described
therein and the covenants contained therein may be enforced by such persons.
The parties hereto agree that irreparable damage would occur in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in the Delaware Courts (as hereinafter defined), this being in addition
to any other remedy to which they are entitled at law or in equity.
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10.5 ASSIGNMENT. Except as expressly permitted by the terms hereof,
neither this Agreement nor any of the rights, interests or obligations hereunder
may be assigned by any of the parties hereto without the prior written consent
of the other parties.
10.6 SEVERABILITY. If any provision of this Agreement, or the application
thereof to any person or circumstance is held invalid or unenforceable, the
remainder of this Agreement, and the application of such provision to other
persons or circumstances, shall not be affected thereby, and to such end, the
provisions of this Agreement are agreed to be severable.
10.7 CHOICE OF LAW/CONSENT TO JURISDICTION. All disputes, claims or
controversies arising out of this Agreement, or the negotiation, validity or
performance of this Agreement, or the Transactions shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts
without regard to its rules of conflict of laws. Each of the Company, Parent
and Acquisition Sub hereby irrevocably and unconditionally consents to submit to
the sole and exclusive jurisdiction of the courts of the State of Delaware and
of the United States District Court for the District of Delaware (the "DELAWARE
COURTS") for any litigation arising out of or relating to this Agreement, or the
negotiation, validity or performance of this Agreement, or the Transactions (and
agrees not to commence any litigation relating thereto except in such courts),
waives any objection to the laying of venue of any such litigation in the
Delaware Courts and agrees not to plead or claim in any Delaware Court that such
litigation brought therein has been brought in any inconvenient forum. Each of
the parties hereto agrees, (a) to the extent such party is not otherwise subject
to service of process in the State of Delaware, to appoint and maintain an agent
in the State of Delaware as such party's agent for acceptance of legal process,
and (b) that service of process may also be made on such party by prepaid
certified mail with a proof of mailing receipt validated by the United States
Postal Service constituting evidence of valid service. Service made pursuant to
(a) or (b) above shall have the same legal force and effect as if served upon
such party personally within the State of Delaware. For purposes of
implementing the parties' agreement to appoint and maintain an agent for service
of process in the State of Delaware, each such party does hereby appoint CT
Corporation, Corporation Trust Center, 1209 Orange Street, Wilmington, DE 19801,
as such agent.
10.8 NO AGREEMENT UNTIL EXECUTED. Irrespective of negotiations among the
parties or the exchanging of drafts of this Agreement, this Agreement shall not
constitute or be deemed to evidence a contract, agreement, arrangement or
understanding among the parties hereto unless and until (i) the Board of
Directors of the Company has approved, for purposes of Chapter 110F of the MGL
and any applicable provision of the Articles of Organization, the terms of this
Agreement, and (ii) this Agreement is executed by the parties hereto.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Parent, Acquisition Sub and the Company have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
PRECISION CASTPARTS CORP.
By: /S/
------------------------------------
Name: William D. Larsson
Title: Vice President and
Chief Financial Officer
WGC ACQUISITION CORP.
By: /S/
------------------------------------
Name: William C. McCormick
Title: President
By: /S/
------------------------------------
Name: William D. Larsson
Title: Treasurer
WYMAN-GORDON COMPANY
By: /S/
------------------------------------
Name: J. Douglas Whelan
Title: President and Treasurer
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ANNEX A
OFFER CONDITIONS
The capitalized terms used in this ANNEX A have the meanings set forth in
the attached Agreement, except that the term "Agreement" shall be deemed to
refer to the attached Agreement together with this ANNEX A.
Notwithstanding any other provision of the Offer or the Agreement and
subject to Rule 14e-1(c) under the Exchange Act, Acquisition Sub shall not be
required to accept for payment or pay for any Shares and may delay the
acceptance for payment of and payment for any Shares, (A) until any applicable
waiting period (and any extension thereof) under the HSR Act in respect of the
Offer shall have expired or been terminated, (B) if there shall not have been
validly tendered to Acquisition Sub pursuant to the Offer and not withdrawn
immediately prior to the Expiration Date, at least that number of Shares that,
when taken as a whole with all other Shares owned or acquired by Acquisition Sub
(whether pursuant to the Offer or otherwise), constitutes at least the Minimum
Condition, or (C) at any time on or after the date of the Agreement, and prior
to the Expiration Date, any of the following conditions exist or shall occur or
remain in effect:
(a) Any Governmental Entity shall have issued an order, decree or
ruling or taken any other action, including instituting any legal proceeding,
(which, order, decree, ruling or other action the parties hereto shall use their
commercially reasonable best efforts to lift), which seeks to restrain, enjoin
or otherwise prohibit or significantly delay any of the Transactions;
(b) (i) Any of the representations and warranties of the Company set
forth in the Agreement which are qualified by materiality or a Company Material
Adverse Effect or words of similar effect shall not have been, or cease to be,
true and correct (except to the extent such representations and warranties
expressly relate to a specific date, in which case such representations and
warranties shall not have been true and correct as of such date) or (ii) any of
the representations and warranties of the Company set forth in the Agreement
which are not so qualified shall not have been, or cease to be, true and correct
in all material respects (except to the extent such representations and
warranties expressly relate to a specific date, in which case such
representations and warranties shall not have been true and correct in all
material respects as of such date);
(c) The Company shall not have performed all obligations required to
be performed by it under the Agreement, including, without limitation, the
covenants contained in Article VI or VII thereof, except where any failure to
perform would, individually or in the aggregate, not reasonably be expected to
have a Company Material Adverse Effect or materially impair or significantly
delay the ability of Acquisition Sub to consummate the Offer;
(d) There shall have occurred after the date of this Agreement any
change or effect concerning the Company or the Company Subsidiaries which has
had or would
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reasonably be expected to have a material adverse effect on the business,
operations or condition (financial or otherwise) of the Company and the
Company Subsidiaries taken as a whole (other than any changes that are
related to or result from the announcement or pendency of the Offer and/or
the Merger, including disruptions to the Company's business or the Company
Subsidiaries' businesses, and their respective employees, customers and
suppliers);
(e) The Agreement shall have been terminated in accordance with its
terms;
(f) Any consent, authorization, order or approval of (or filing or
registration with) any Governmental Entity or other third party required to be
made or obtained by the Company or any of the Company Subsidiaries or affiliates
in connection with the execution, delivery and performance of the Agreement and
the consummation of the Transactions shall not have been obtained or made,
except where the failure to have obtained or made any such consent,
authorization, order, approval, filing or registration, would not have a Company
Material Adverse Effect or would not reasonably be expected to materially impair
or significantly delay the ability of Acquisition Sub to consummate the Offer;
or
(g) There shall have occurred (i) any general suspension of trading
in, or limitation on prices for securities on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq Stock Market for a period in excess of 24
hours (excluding suspension or limitations resulting solely from physical damage
or interference with such exchanges not related to market conditions), (ii) a
declaration of a general banking moratorium or any general suspension of
payments in respect of banks in the United States (whether or not mandatory), or
(iii) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
The foregoing conditions (i) may be asserted by Parent or Acquisition Sub
regardless of the circumstances (including any action or inaction by Parent or
Acquisition Sub or any of their affiliates other than a material breach of the
Agreement), and (ii) are for the sole benefit of Parent, Acquisition Sub and
their respective affiliates. The foregoing conditions may be waived by Parent,
in whole or in part, at any time and from time to time, in the sole discretion
of Parent. The foregoing conditions are material to the Offer. The failure by
Parent or Acquisition Sub at any time to exercise any of the foregoing rights
will not be deemed a waiver of any right and each right will be deemed an
ongoing right which may be asserted at any time and from time to time.
Should the Offer be terminated due to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall promptly be returned
to the tendering stockholders.
A-2
<PAGE>
Wyman-Gordon Company
244 Worcester Street
Box 8001
North Grafton, MA 01536
March 26, 1999
PRIVATE AND CONFIDENTIAL
Precision Castparts Corporation
4650 S.W. Macadam Avenue
Portland, OR 97201
Attention: Mr. William D. Larsson
Ladies and Gentlemen:
Re: CONFIDENTIALITY AND STANDSTILL AGREEMENT
In connection with your consideration of a possible transaction (the
"Transaction") with Wyman-Gordon Company and/or its subsidiaries, affiliates
and divisions (collectively, with such subsidiaries, affiliates and
divisions, the "Company"), the Company is prepared to make available to you
certain information concerning the business, financial condition, operations,
assets and liabilities of the Company. As a condition to our furnishing such
information to you and your directors, officers, employees, agents or
advisors (including, without limitation, attorneys, accountants, consultants,
bankers and financial advisors) (collectively, "Representatives"), you agree
to treat such information in accordance with the provisions of this letter
agreement, and to take or abstain from taking certain other actions
hereinafter set forth.
1. DEFINITION OF EVALUATION MATERIAL. The term "Evaluation Material"
means any and all information concerning the Company (whether prepared by the
Company, its advisors or otherwise and irrespective of the form of
communication) that is furnished to you or to your Representatives now or in
the future by or on behalf of the Company. In addition, "Evaluation
Material" shall be deemed to include all notes, analyses, compilations,
studies, interpretations and other documents prepared by you or your
Representatives which contain, reflect, are based upon or are generated from,
in whole or in part, the information furnished to you or your Representatives
pursuant hereto. The term "Evaluation Material" does not include information
which (a) is or becomes available to the public generally (other than as a
result of
<PAGE>
Precision Castparts Corporation
March 26, 1999
Page 2
a disclosure by you or one of your Representatives), (b) was within your
possession prior to the date hereof, provided that the source of such
information was not bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Company
or any other party with respect to such information, or (c) becomes available
to you on a non-confidential basis from a source other than the Company or
one of its Representatives, provided that such source is not bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with respect
to such information.
2. USE OF EVALUATION MATERIAL AND CONFIDENTIALITY.
(a) You hereby agree that you and your Representatives will use
the Evaluation Material solely for the purpose of evaluating the Transaction,
that the Evaluation Material will be kept confidential and that neither you
nor any of your Representatives will disclose any of the Evaluation Material
in any manner whatsoever; provided, however, that you may disclose Evaluation
Material (i) to such of your Representatives who need such information for
the sole purpose of evaluating the Transaction, who agree in writing to keep
such information confidential and who are provided with a copy of this letter
agreement and agree in writing to be bound by the terms hereof to the same
extent as if they were parties hereto, and (ii) in all other cases, to the
extent that the Company gives its prior written consent to such disclosure.
You agree that you will be responsible for any breach of this letter
agreement by any of your Representatives and you agree to take, at your sole
expense, all necessary measures to restrain your Representatives from
prohibited or unauthorized disclosure or use of the Evaluation Material
(including, without limitation, the initiation of court proceedings).
(b) The Evaluation Material may contain material information about
the Company that has not been disclosed to the public generally. You
understand that you and your Representatives could be subject to fines,
penalties and other liabilities under applicable securities laws if you or
any of your Representatives trades in the Company's common stock while in
possession of any material, non-public information concerning the Company.
You agree not to trade, and not to allow any of your Representatives who have
access to the Evaluation Material to trade, in the Company's common stock,
until such time as you or the Representatives, as applicable are no longer
prohibited from trading in the Company's common stock under all applicable
securities laws (whether because the Company has publicly disclosed all
material information in the Evaluation Material, the Evaluation Material no
longer
<PAGE>
Precision Castparts Corporation
March 26, 1999
Page 3
contains material, non-public information or otherwise).
(c) In addition, you agree that, without the prior written consent
of the Company, neither you nor any of your Representatives will disclose to
any other person (including, without limitation, by issuing a press release
or otherwise making any public statement) the fact that the Evaluation
Material has been made available to you, the fact that discussions or
negotiations are taking place concerning the Transaction, or any of the
terms, conditions or other facts with respect thereto (including the status
thereof); provided, however, that you may make such disclosure as is required
by law (in which event, to the extent practicable, you will consult with, and
exercise in good faith all reasonable efforts to mutually agree with, the
Company regarding the nature, extent and form of such disclosure). Subject
to the second to last paragraph of Section 5, no request or proposal to
amend, modify or waive any provision of this agreement shall be made or
solicited except in a non-public and confidential manner. The term "person"
as used in this letter agreement shall be interpreted broadly to include the
media and any corporation, partnership, group, individual or other entity.
(d) In the event that you or any of your Representatives are
requested or required (by oral questions, interrogatories, requests for
information or documents in legal proceedings, subpoena, civil investigative
demand or other similar process) to disclose (a) any of the Evaluation
Material, (b) any information relating to your or any of your
Representatives' opinion, judgment or recommendation concerning the Company,
or (c) any other information supplied to you or any of your Representatives
in the course of your or your Representatives' dealings with the Company, you
shall provide the Company with prompt notice of any such request or
requirement so that the Company may seek a protective order or other
appropriate remedy or waive compliance with the provisions of this letter
agreement. If the Company waives compliance with the provisions of this
letter agreement with respect to a specific request or requirement, you and
your Representatives shall disclose only that portion of the Evaluation
Material that is covered by such waiver and which is necessary to disclose in
order to comply with such request or requirement. If, in the absence of a
protective order or other remedy or a waiver by the Company, you or one of
your Representatives is nonetheless, in the opinion of counsel, legally
compelled to disclose Evaluation Material or else stand liable for contempt
or suffer other censure or penalty, you or such Representative may, without
liability hereunder, disclose only that portion of the Evaluation Material
which such counsel advises you is legally required to be disclosed.
Notwithstanding the foregoing, in the event that you or one of your
Representatives discloses Evaluation Material under the terms of this
subsection,
<PAGE>
Precision Castparts Corporation
March 26, 1999
Page 4
you and your Representatives shall exercise your best efforts to preserve the
confidentiality of the Evaluation Material, including, without limitation, by
cooperating with the Company to obtain an appropriate protective order or
other reliable assurance that confidential treatment will be accorded the
Evaluation Material.
(e) If you decide that you do not desire to proceed with the
Transaction, you shall inform the Company of that decision immediately. In
that case, or at any other time upon the request of the Company for any
reason whatsoever, you shall deliver promptly to the Company all Evaluation
Material furnished to you or any of your Representatives by or on behalf of
the Company, together with all copies of such Evaluation Material in your
possession or control or in the possession or control of any of your
Representatives. In the event of such a decision not to proceed or request
by the Company for the return of the Evaluation Material, you agree to
destroy all other Evaluation Material prepared by you or any of your
Representatives, together with all copies thereof (including, without
limitation, electronic copies). Notwithstanding the return or destruction of
the Evaluation Material, you and your Representatives will continue to be
bound by your obligations of confidentiality and other obligations hereunder.
3. ACCURACY OF EVALUATION MATERIAL. You understand and acknowledge
that neither the Company nor any of its officers, directors, employees,
agents or advisors, including Goldman, Sachs & Co.("Goldman Sachs"), makes
any representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material. You agree that neither the Company
nor any of its officers, directors, employees, agents or advisors, including
Goldman Sachs, shall have any liability to you or to any of your
Representatives relating to or resulting from the use of the Evaluation
Material or any errors therein or omissions therefrom. Only those
representations and warranties that are made in a final definitive agreement
regarding the Transaction, when, as and if executed, and subject to such
limitations and restrictions as may be specified therein, will have any legal
effect.
4. ACCESS TO AND SOLICITATION OF EMPLOYEES. In consideration of the
Company's provision of the Evaluation Material to you, you agree not to
initiate or maintain contact with any officer, director, employee or agent of
the Company regarding its business, operations, prospects or finances, except
with the express written permission of the Company. It is understood that
Goldman Sachs will arrange for appropriate contacts for due diligence
purposes. You agree to submit or direct all (a) communications regarding the
Transaction, (b) requests for additional information, (c) requests for
facility tours or management meetings
<PAGE>
Precision Castparts Corporation
March 26, 1999
Page 5
and (d) discussions or questions regarding procedures, to Goldman Sachs. You
further agree that, for a period of eighteen months from the date hereof, (a)
without obtaining the prior written consent of the Company you and your
affiliates will not employ or solicit to employ any individual currently
serving as a director, officer, employee or agent of the Company, and who is
identified by you as a result of your evaluation or otherwise in connection
with the possible transactions; provided however that you shall not be
prohibited from employing any such person who contacts you on his or her own
initiative or through any general advertisements, and (b) none of you, your
affiliates or your Representatives shall knowingly divert any business,
customers or suppliers from the Company except under normal competitive
conditions not involving use of the Evaluation Material.
5. STANDSTILL. You hereby acknowledge that the Evaluation Material is
being furnished to you in consideration of your agreement that neither you
nor any person or entity directly or indirectly, through one or more
intermediaries, controlling you or controlled by you or under common control
with you, acting alone or as part of any group, will, for a period of
eighteen months from the date of this agreement, directly or indirectly,
unless specifically requested to do so in writing in advance by the Company:
(a) acquire or agree, offer, seek or propose to acquire, or cause
to be acquired, ownership (including, but not limited to, beneficial
ownership as defined in Rule 13d-1 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) of any of the assets or businesses of the
Company or of any securities of the Company, or any rights or options to
acquire any such ownership (including from a third party), or
(b) make, or in any way participate in, any "solicitation" of
"proxies" (as such terms are used in the Exchange Act) to vote or seek to
advise or influence in any manner whatsoever any person or entity with
respect to the voting of any securities of the Company, or
(c) form, join, or in any way participate in a "group" (within the
meaning of Section 13d(3) of the Exchange Act) with respect to any voting
securities of the Company, or
(d) arrange, or in any way participate in, any financing for the
purchase of any voting securities or securities convertible or exchangeable
into or exercisable for any voting securities or assets of the Company, or
<PAGE>
Precision Castparts Corporation
March 26, 1999
Page 6
(e) otherwise act, whether alone or in concert with others, to
seek to propose to the Company or any of its stockholders any merger,
business combination, restructuring, recapitalization or similar transaction
to or with the Company or otherwise act, whether alone or in concert with
others, to seek to control, change or influence the management, Board of
Directors or policies of the Company, or nominate any person as a Director of
the Company who is not nominated by the then incumbent Directors, or propose
any matter to be voted upon by the stockholders of the Company, or
(f) solicit, negotiate with, or provide any information to, any
person with respect to a merger, exchange offer or liquidation of the Company
or any other acquisition of the Company, any acquisition or voting securities
of or all or any portion of the assets of the Company, or any other similar
transaction, or
(g) announce an intention to, or enter into any discussion,
negotiations, arrangements or understandings with any third party with
respect to, any of the foregoing, or
(h) disclose any intention, plan or arrangement inconsistent with
the foregoing, or
(i) advise, assist or encourage any other person in connection
with any of the foregoing.
In addition, you also agree during such eighteen month period not to (i)
request that the Company (or any of its Representatives), directly or
indirectly, amend or waive any provision of this Paragraph 5 (including this
sentence) or (ii) take any action that might require the Company to make a
public announcement regarding a possible transaction.
If at any time during such eighteen month period you are approached by
any third party concerning your or their participation in a transaction
involving the assets or businesses of the Company or securities issued by the
Company, you will promptly inform the Company of the nature of such
transaction and the parties thereto.
Notwithstanding anything in this section (5) to the contrary, in the event
there is a Competing Transaction with respect to the Company (or the Company
enters into an agreement with respect to a Competing Transaction), the
provisions of this paragraph (5) shall no longer apply to you. "Competing
Transaction" shall mean with respect to the Company, (i) a merger or
consolidation,
<PAGE>
Precision Castparts Corporation
March 26, 1999
Page 7
or any similar transaction, involving the Company, (ii) a purchase, lease or
other acquisition or assumption of all or a substantial portion of the assets
of the Company and its subsidiaries taken as a whole, (iii) a purchase or
other acquisition (including by way of merger, consolidation, share exchange
or otherwise) of securities representing 50% or more of the voting power of
the Company, (iv) commencement of a tender offer or exchange offer with
respect to securities representing 20% or more of the voting power of the
Company, or (v) any transaction in which there would be a change in the
majority of the Board of Directors of the Company.
6. NO DEFINITIVE AGREEMENT/FREEDOM TO CHANGE PROCESS. You
understand and agree that no contract or agreement providing for the
Transaction shall be deemed to exist between you and the Company unless and
until a final definitive agreement with respect thereto has been executed and
delivered by you and the Company, and you hereby waive, in advance, any
claims (including, without limitation, breach of contract) in connection with
the Transaction unless and until you and the Company shall have entered into
such a final definitive agreement. You also agree that, except for the
matters specifically agreed to in this letter agreement, unless and until
such a final definitive agreement regarding the Transaction has been executed
and delivered, neither the Company nor you will be under any legal obligation
of any kind whatsoever with respect to the Transaction. You further
acknowledge and agree that the Company reserves the right, in its sole
discretion, to reject any and all proposals made by you or any of your
Representatives with regard to the Transaction, and to terminate discussions
and negotiations with you at any time. You further understand that (a) the
Company and its Representatives shall be free to conduct any process for any
transaction involving the Company, if and as they in their sole discretion
shall determine (including, without limitation, negotiating with any other
interested parties and entering into a definitive agreement without prior
notice to you or any other person), (b) the Company may change any procedures
relating to such process or transaction at any time without notice to you or
any other person, and (c) you shall have no claims whatsoever against the
Company, its Representatives or any of their respective directors, officers,
stockholders, owners, affiliates or agents arising out of or relating to any
such transaction involving the Company.
7. REMEDIES. It is understood and agreed that money damages would not
be a sufficient remedy for any breach of this letter agreement by you or any
of your Representatives, and that in addition to all other remedies available
at law or equity, the Company shall be entitled to equitable relief,
including injunction and specific performance, as a remedy for any such
breach, and you and your Representatives further agree to waive any
requirement for the securing or posting of any bond in connection with such
remedy. In the
<PAGE>
Precision Castparts Corporation
March 26, 1999
Page 8
event of litigation relating to this letter agreement, if a court of
competent jurisdiction determines that you or any of your Representatives has
breached this letter agreement in a material respect, the court may, in its
discretion, require you to, pay to the Company on demand the legal fees and
expenses incurred by the Company in connection with such litigation,
including any appeal therefrom.
8. WAIVERS AND AMENDMENTS. No failure or delay by the Company in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other
or future exercise thereof or the exercise of any other right, power or
privilege hereunder. No provision of this letter agreement can be amended
without the specific written consent of the Company.
9. CHOICE OF LAW/CONSENT TO JURISDICTION. The validity,
interpretation, performance and enforcement of this letter agreement shall be
governed by the laws of the Commonwealth of Massachusetts. You hereby
irrevocably and unconditionally consent to the sole and exclusive
jurisdiction of the courts of the Commonwealth of Massachusetts and the
United States District Court for the District of Massachusetts for any
action, suit or proceeding arising out of or relating to this letter
agreement or the Transaction, and you agree not to commence any action, suit
or proceeding related thereto except in such courts. You further hereby
irrevocably and unconditionally waive any objection to the laying of venue of
any action, suit or proceeding arising out of or relating to this letter
agreement in the courts of the Commonwealth of Massachusetts or the United
States District Court for the District of Massachusetts, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum. You further agree that service of
any process, summons, notice or document by U.S. registered mail to your
address set forth above shall be effective service of process for any action,
suit or proceeding brought against you in any such court.
10. SUCCESSORS AND ASSIGNS. This letter agreement shall inure to the
benefit of and be enforceable by the Company and its successors.
11. SEVERABILITY. In case provisions of this letter agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions of the letter agreement shall not in any way be
affected or impaired thereby.
<PAGE>
Precision Castparts Corporation
March 26, 1999
Page 9
12. COUNTERPARTS. This letter agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
shall constitute the same agreement.
<PAGE>
Precision Castparts Corporation
March 26, 1999
Page 10
Please confirm your agreement with the foregoing by signing and
returning one copy of this letter agreement to the undersigned, whereupon
this letter agreement shall become a binding agreement between you and the
Company.
Very truly yours,
WYMAN-GORDON COMPANY
By: /s/ Wallace F. Whitney, Jr.
------------------------------
Name: Wallace F. Whitney, Jr.
Title: General Counsel
Accepted and agreed as of
March 26, 1999.
Precision Castparts
By: /s/ William D. Larsson
--------------------------------
Name: William D. Larsson
Title: Vice President and Chief
Financial Officer
