<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 28, 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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
GIDDINGS & LEWIS, INC.
(Name of Subject Company)
DSFA CORPORATION
HARNISCHFEGER INDUSTRIES, INC.
(Bidders)
COMMON STOCK, $.10 PAR VALUE PER SHARE
(Title of Class of Securities)
375048-10-5
(CUSIP Number of Class of Securities)
----------------
K. THOR LUNDGREN, ESQ.
HARNISCHFEGER INDUSTRIES, INC.
3600 SOUTH LAKE DRIVE
ST. FRANCIS, WISCONSIN 53235
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of Bidders)
COPY TO:
ANDREW R. BROWNSTEIN, ESQ.
WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, NEW YORK 10019
(212) 403-1000
----------------
CALCULATION OF FILING FEE
- -------------------------------------------------------------------------------
Transaction Valuation* Amount of Filing Fee**
$641,921,935 $128,385
* For purposes of calculating filing fee only. The total transaction value is
based on 34,574,965 shares of Common Stock of the subject company
outstanding on a fully diluted basis (consisting of 33,186,898 shares
outstanding as of March 10, 1997, 282,355 shares issued in connection with
the subject company's Management Stock Purchase Program subsequent to March
10, 1997, and options outstanding as of December 31, 1996 to purchase
1,105,712 shares) less 789,600 shares of Common Stock owned by the bidders,
multiplied by the offer price of $19 per share of Common Stock.
** The amount of the filing fee calculated in accordance with Regulation
240.0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50
of 1% of the value of the shares to be purchased.
[_]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid: N/A Filing Party: N/A
Form of Registration No.: N/A Date Filed: N/A
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
14D-1
CUSIP NO. 375048-10-5
<TABLE>
<C> <S>
1. NAME OF REPORTING PERSONS
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
HARNISCHFEGER INDUSTRIES, INC.
39-1566457
- ------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_] (b) [X]
- ------------------------------------------------------------------------------
3. SEC USE ONLY
- ------------------------------------------------------------------------------
4. SOURCE OF FUNDS
BK, WC
- ------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(e) OR 2(f)
[_]
- ------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- ------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
789,600 SHARES OF COMMON STOCK
- ------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[_]
- ------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
2.4%
- ------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON
CO
</TABLE>
<PAGE>
14D-1
CUSIP NO. 375048-10-5
<TABLE>
<C> <S>
1. NAME OF REPORTING PERSONS
SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
DSFA CORPORATION
13-3941117
- ------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_] (b) [X]
- ------------------------------------------------------------------------------
3. SEC USE ONLY
- ------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- ------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(e) OR 2(f)
[_]
- ------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- ------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,000 SHARES OF COMMON STOCK
- ------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[_]
- ------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0.0%
- ------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON
CO
</TABLE>
<PAGE>
ITEM 1.
SECURITY AND SUBJECT COMPANY.
(a)The name of the subject company is Giddings & Lewis, Inc., a
Wisconsin corporation (the "Company"), which has its principal
executive offices at 142 Doty Street, Fond du Lac, Wisconsin 54935.
(b)This Statement on Schedule 14D-1 (the "Statement") relates to the
offer by DSFA Corporation (the "Purchaser"), a Delaware corporation
and a wholly owned subsidiary of Harnischfeger Industries, Inc., a
Delaware corporation ("Parent"), to purchase all outstanding shares
of Common Stock, $.10 par value per share (the "Common Shares"), of
the Company (the "Common Shares"), together with (unless and until
the Purchaser declares that the Rights Condition (as defined in the
Offer to Purchase (as defined below) is satisfied) any associated
preferred share purchase rights (the "Rights") issued pursuant to
the Rights Agreement between the Company and Firstar Trust Company,
as rights agent, at a price of $19 per Common Share (and associated
Right), net to the seller in cash, without interest thereon (the
"Offer Price"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated April 28, 1997 (the "Offer to
Purchase"), and in the related Letter of Transmittal (the "Letter of
Transmittal") (which, as either may be amended from time to time,
together constitute the "Offer"). The information set forth in the
"Introduction" of the Offer to Purchase attached hereto as Exhibit
(a)(1) is incorporated herein by reference. Unless the context
otherwise requires, all references to Common Shares include the
Rights.
(c)The information concerning the principal market in which the
Common Shares are traded and certain high and low sales prices for
the Common Shares in such principal market set forth in Section 6
("Price Range of Common Shares; Dividends on the Common Shares") of
the Offer to Purchase is incorporated herein by reference.
ITEM 2.
IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement is filed by the Purchaser and Parent.
The information set forth in the "Introduction" and in Section 9
("Certain Information Concerning Parent and the Purchaser") and in
Schedule I of the Offer to Purchase is incorporated herein by
reference.
(e) and (f) During the last five years, neither the Purchaser,
Parent, nor, to the best knowledge of the Purchaser and Parent, any
of the persons listed in Schedule I of the Offer to Purchase, has
been (i) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to
a judgment, decree or final order enjoining future violations of, or
prohibiting activities subject to, federal or state securities laws
or finding any violation of such laws.
ITEM 3.
PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT
COMPANY.
(a)-(b) The information set forth in the "Introduction" and in
Section 11 ("Background of the Offer") and Section 12 ("Purpose of
the Offer; Plans for the Company") in the Offer to Purchase is
incorporated herein by reference.
ITEM 4.
SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b) The information set forth in Section 10 ("Source and
Amount of Funds") of the Offer to Purchase is incorporated herein by
reference.
(c)Not applicable.
<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 in
Section 10 ("Source and Amount of Funds"), Section 11 ("Background
of the Offer") and Section 12 ("Purpose of the Offer; Plans for the
Company") of the Offer to Purchase is incorporated herein by
reference.
(f) and (g) The information set forth in Section 7 ("Effect of the
Offer on the Market for the Common Shares; NASDAQ Quotation and
Exchange Act Registration; Margin Regulations") of the Offer to
Purchase is incorporated herein by reference.
ITEM 6.
INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)The information set forth in the "Introduction" and in Section 9
("Certain Information Concerning Parent and the Purchaser") and in
Schedule II of the Offer to Purchase is incorporated herein by
reference.
(b)The information set forth in Section 11 ("Background of the
Offer") and in Schedule II of the Offer to Purchase is incorporated
herein by reference.
ITEM 7.
CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the "Introduction" and in Section 11
("Background of the Offer") of the Offer to Purchase is incorporated
herein by reference.
ITEM 8.
PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 16 ("Fees and Expenses") of the
Offer to Purchase is incorporated herein by reference.
ITEM 9.
FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information
Concerning Parent and the Purchaser") of the Offer to Purchase is
incorporated herein by reference.
ITEM 10.
ADDITIONAL INFORMATION.
(a)Not applicable.
(b)-(c) and (e) The information set forth in the "Introduction" and
in Section 11 ("Background of the Offer"), Section 12 ("Purpose of
the Offer; Plans for the Company") and Section 15 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by
reference.
(d)The information set forth in Section 7 ("Effect of the Offer on
the Market for the Common Shares; NASDAQ Quotation and Exchange Act
Registration; Margin Regulations") of the Offer to Purchase is
incorporated herein by reference.
(f)The information set forth in the Offer to Purchase and the Letter
of Transmittal, copies of which are attached hereto as Exhibits
(a)(1) and (a)(2), respectively, is incorporated herein by
reference.
<PAGE>
ITEM 11.
MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S>
(a)(1) Offer to Purchase, dated April 28, 1997.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Letter from Lehman Brothers Inc. to Brokers,
Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(4) Form of Letter from Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees to Clients.
(a)(5) Form of Notice of Guaranteed Delivery.
(a)(6) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7) Summary Advertisement as published in The Wall Street
Journal on April 28, 1997.
(a)(8) Text of Press Release, dated April 25, 1997.
(a)(9) Text of Press Release, dated April 28, 1997.
(b)(1) Commitment Letter, dated April 21, 1997, among Harnischfeger
Industries, Inc., The Chase Manhattan Bank and Chase
Securities Inc.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) None.
(g)(1) Preliminary Solicitation Statement of Harnischfeger
Industries, Inc. and DSFA Corporation, filed with the
Commission on April 28, 1997.
(g)(2) Preliminary Proxy Statement of Harnischfeger Industries,
Inc. and DSFA Corporation, filed with the Commission on
April 28, 1997.
(g)(3) Complaint seeking Declaratory and Injunctive Relief filed in
the United States District Court for the Eastern District of
Wisconsin on April 25, 1997.
</TABLE>
<PAGE>
SIGNATURES
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
HARNISCHFEGER INDUSTRIES, INC.
/s/ Francis M. Corby, Jr.
By: _________________________________
Name: Francis M. Corby, Jr.
Title: Executive Vice President
for Finance and
Administration and Chief
Financial Officer
DSFA CORPORATION
/s/ Francis M. Corby, Jr.
By: _________________________________
Name: Francis M. Corby, Jr.
Title: Vice President and
Treasurer
Dated: April 28, 1997
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
(a)(1) Offer to Purchase, dated April 28, 1997.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Letter from Lehman Brothers Inc. to Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.
(a)(4) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees to Clients.
(a)(5) Form of Notice of Guaranteed Delivery.
(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(7) Summary Advertisement as published in The Wall Street Journal on April
28, 1997.
(a)(8) Text of Press Release, dated April 25, 1997.
(a)(9) Text of Press Release, dated April 28, 1997.
(b)(1) Commitment Letter, dated April 21, 1997, among Harnischfeger
Industries, Inc., The Chase Manhattan Bank and Chase Securities Inc.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) None.
(g)(1) Preliminary Solicitation Statement of Harnischfeger Industries, Inc.
and DSFA Corporation, filed with the Commission on April 28, 1997.
(g)(2) Preliminary Proxy Statement of Harnischfeger Industries, Inc. and DSFA
Corporation, filed with the Commission on April 28, 1997.
(g)(3) Complaint seeking Declaratory and Injunctive Relief filed in the
United States District Court for the Eastern District of Wisconsin on
April 25, 1997.
</TABLE>
<PAGE>
Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
GIDDINGS & LEWIS, INC.
AT
$19 NET PER SHARE
BY
DSFA CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
HARNISCHFEGER INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MAY 23, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT PROPERLY WITHDRAWN A
NUMBER OF SHARES OF COMMON STOCK, $.10 PAR VALUE PER SHARE ("COMMON SHARES"),
OF GIDDINGS & LEWIS, INC. (THE "COMPANY"), WHICH, WHEN ADDED TO THE COMMON
SHARES BENEFICIALLY OWNED BY DSFA CORPORATION (THE "PURCHASER") AND ITS
AFFILIATES, CONSTITUTES AT LEAST A MAJORITY OF THE TOTAL VOTING POWER OF ALL
SHARES OF CAPITAL STOCK OF THE COMPANY OUTSTANDING ON A FULLY DILUTED BASIS ON
THE DATE OF PURCHASE, (2) THE RIGHTS (AS DEFINED HEREIN) HAVING BEEN REDEEMED
BY THE BOARD OF DIRECTORS OF THE COMPANY OR THE PURCHASER BEING SATISFIED, IN
ITS REASONABLE JUDGMENT, THAT THE RIGHTS HAVE BEEN INVALIDATED OR ARE
OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER (AS DEFINED
HEREIN), AND (3) THE PURCHASER BEING SATISFIED, IN ITS REASONABLE JUDGMENT,
THAT THE RESTRICTIONS CONTAINED IN THE WISCONSIN BUSINESS COMBINATION LAW (AS
DEFINED HEREIN) WILL NOT APPLY TO THE ACQUISITION OF COMMON SHARES PURSUANT TO
THE OFFER OR TO THE PROPOSED MERGER. SEE THE INTRODUCTION AND SECTIONS 14 AND
15. THE OFFER IS NOT CONDITIONED ON THE RECEIPT OF FINANCING.
-----------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
Common Shares (and the associated Rights) should either (i) complete and sign
the Letter of Transmittal (or facsimile thereof) in accordance with the
instructions in the Letter of Transmittal, have such shareholder's signature
thereon guaranteed as and if required by Instruction 1 to the Letter of
Transmittal, mail or deliver the Letter of Transmittal (or facsimile thereof)
and any other required documents to the Depositary (as defined herein) and
either deliver the certificates for such Common Shares (and, if separate, the
certificates representing the associated Rights) to the Depositary along with
the Letter of Transmittal (or facsimile thereof) or deliver such Common Shares
(and Rights) pursuant to the procedure for book-entry transfer set forth in
Section 2 or (ii) request such shareholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such shareholder.
A shareholder having Common Shares (and Rights) registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
such broker, dealer, commercial bank, trust company or other nominee if such
shareholder desires to tender such Common Shares (and Rights).
Unless and until the Purchaser declares that the Rights Condition (as
defined herein) is satisfied, holders of Common Shares will be required to
tender one Right for each Common Share tendered in order to effect a valid
tender of such Common Share. If the Distribution Date (as defined herein) does
not occur prior to the Expiration Date (as defined herein), a tender of Common
Shares will also constitute a tender of the associated Rights. If the
Distribution Date occurs prior to the Expiration Date, the procedures set
forth in Section 2 with respect to the separate delivery of certificates
evidencing the Rights must be followed to effect a valid tender.
If a shareholder desires to tender Common Shares (and Rights) and such
shareholder's certificates for Common Shares (and, if separate, certificates
for Rights) are not immediately available or the procedure for book-entry
transfer cannot be completed on a timely basis, or time will not permit all
required documents to reach the Depositary prior to the Expiration Date, such
shareholder's tender may be effected by following the procedure for guaranteed
delivery set forth in Section 2.
Questions and requests for assistance may be directed to Lehman Brothers
Inc., the Dealer Manager, or to Georgeson & Company Inc. and Kissel-Blake
Inc., the Information Agents, at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional
copies of this Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery and other related materials may be obtained from the
Information Agents or from brokers, dealers, commercial banks and trust
companies.
-----------------
The Dealer Manager for the Offer is:
LEHMAN BROTHERS
-----------------
April 28, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Introduction............................................. 3
Section 1. Terms of the Offer....................................... 7
Section 2. Procedures for Tendering Common Shares................... 9
Section 3. Withdrawal Rights........................................ 13
Section 4. Acceptance for Payment and Payment....................... 14
Section 5. Certain Federal Income Tax Consequences.................. 15
Price Range of Common Shares; Dividends on the Common
Section 6. Shares................................................... 16
Section 7. Effect of the Offer on the Market for the Common Shares;
NASDAQ Quotation and Exchange Act Registration; Margin
Regulations.............................................. 17
Section 8. Certain Information Concerning the Company............... 18
Section 9. Certain Information Concerning Parent and the Purchaser.. 22
Section 10. Source and Amount of Funds............................... 24
Section 11. Background of the Offer.................................. 25
Section 12. Purpose of the Offer; Plans for the Company.............. 31
Section 13. Dividends and Distributions.............................. 34
Section 14. Certain Conditions of the Offer.......................... 34
Section 15. Certain Legal Matters.................................... 39
Section 16. Fees and Expenses........................................ 42
Section 17. Miscellaneous............................................ 43
Directors and Executive Officers of Parent and the
Schedule I -- Purchaser................................................ I-1
Schedule II -- Parent and the Purchaser Purchases of Common Shares...... II-1
</TABLE>
2
<PAGE>
To the Holders of Shares of Common Stock of Giddings & Lewis, Inc.:
INTRODUCTION
DSFA Corporation (the "Purchaser"), a Delaware corporation and a wholly
owned subsidiary of Harnischfeger Industries, Inc., a Delaware corporation
("Parent"), hereby offers to purchase all outstanding shares of Common Stock,
$.10 par value per share (the "Common Shares"), together with (unless and
until the Purchaser declares that the Rights Condition (as defined herein) is
satisfied) any associated preferred share purchase rights (the "Rights")
issued pursuant to the Rights Agreement (the "Rights Agreement") between
Giddings & Lewis, Inc., a Wisconsin corporation (the "Company"), and Firstar
Trust Company, as rights agent (the "Rights Agent"), of the Company, at a
price of $19 per Common Share (and associated Right), net to the seller in
cash, without interest thereon (the "Offer Price"), upon the terms and subject
to the conditions set forth in this Offer to Purchase (the "Offer to
Purchase") and in the related Letter of Transmittal (the "Letter of
Transmittal") (which, as either may be amended from time to time, together
constitute the "Offer"). Unless the context otherwise requires, all references
to Common Shares include the Rights and all references to the Rights include
all benefits that may inure to holders of the Rights pursuant to the Rights
Agreement.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Common Shares pursuant to
the Offer. The Purchaser will pay all charges and expenses of Lehman Brothers
Inc. ("Lehman Brothers"), as Dealer Manager (in such capacity, the "Dealer
Manager"), ChaseMellon Shareholder Services, L.L.C., as Depositary (the
"Depositary"), and Georgeson & Company Inc. and Kissel-Blake Inc., as
Information Agents (the "Information Agents"), incurred in connection with the
Offer. See Section 16.
The purpose of the Offer and the Proposed Merger (as defined herein) is to
enable Parent to acquire control of, and the entire equity interest in, the
Company. Parent and the Purchaser have proposed that, following the
consummation of the Offer, the Purchaser would effect a merger or similar
business combination with the Company (the "Proposed Merger"), pursuant to
which each then outstanding Common Share (excluding Common Shares owned by the
Purchaser or Parent, Common Shares held in the treasury of the Company and
Common Shares owned by shareholders who perfect dissenters' rights under the
Wisconsin Business Corporation Law (the "WBCL"), if any), would be converted
into the right to receive an amount in cash equal to the price per Common
Share paid pursuant to the Offer, and the Company would become a wholly owned
subsidiary of Parent. The Offer, as the first step in the acquisition of the
Company, is intended to facilitate the acquisition of all outstanding Common
Shares. The Proposed Merger, as the second step in the acquisition of the
Company, is intended to facilitate the acquisition of any Common Shares not
acquired by the Purchaser in the Offer. See Sections 11 and 12.
On April 25, 1997, Parent and the Purchaser announced their intention to
commence the Offer and Parent and the Purchaser commenced litigation against
the Company and certain of its directors. See Section 15. On the date hereof,
the Purchaser commenced the Offer by publication of a summary advertisement
pursuant to Rule 14d-2(a)(2) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Also on the date hereof, Parent and the
Purchaser initiated the process of soliciting written demands to call a
special meeting of the Company's shareholders (see Section 12), and requested
the Company's shareholder list and security position listings and other
information pursuant to the federal securities laws and the WBCL.
Parent intends to continue to seek to negotiate with the Company with
respect to the acquisition of the Company. If such negotiations result in a
definitive merger agreement between the Company and Parent, certain material
terms of the Offer may change and Parent would not proceed with any
solicitation with regard to the Special Meeting referred to below.
Accordingly, such negotiations could result in, among other things,
termination or amendment of the Offer and/or submission of a different
acquisition proposal to the Company's shareholders for their approval.
In order to increase the likelihood that the conditions to the Offer will be
satisfied and that the Company and the Purchaser will enter into the Proposed
Merger, on the date hereof Parent and the Purchaser have taken steps to
commence a solicitation of written demands ("Written Demands") to call a
special meeting of
3
<PAGE>
the Company's shareholders (the "Special Meeting") at which, among other
things, Parent and the Purchaser will propose that the holders of Common
Shares (i) remove all of the incumbent directors of the Company, (ii) repeal
each provision of the Bylaws of the Company (the "Bylaws") or amendments
thereto (other than the amendment referred to in (iii) below) adopted
subsequent to March 28, 1997, or adopted on or prior to that date but not
filed by the Company as an exhibit to any Current Report on Form 8-K,
Quarterly Report on Form 10-Q or Annual Report on Form 10-K of the Company on
or prior to March 28, 1997 (the "Repeal Proposal"), (iii) amend the Bylaws to
reduce the authorized number of directors of the Company to three, and (iv)
elect three nominees of the Purchaser and Parent as directors of the Company
to fill the vacancies created thereby. Pursuant to the Company's Restated
Articles of Incorporation, as heretofore amended (the "Articles of
Incorporation"), removal of the incumbent directors and amendment of the
Bylaws to reduce the number of directors to three at the Special Meeting will
be required to be approved by the affirmative vote of holders of at least 66
2/3% of the voting power of the then outstanding shares of all classes of
capital stock of the Company generally possessing voting rights in the
election of directors, voting together as a single class. Pursuant to the
Bylaws, the Repeal Proposal will be approved if the number of votes cast in
favor of such proposal exceeds the number of votes cast in opposition to such
proposal; provided that, pursuant to the Articles of Incorporation, to the
extent this amendment affects Section 3.01 of the Bylaws (relating to the
powers, number and tenure of directors) or Article IX of the Bylaws (relating
to the indemnification of officers and directors), the affirmative vote of
holders of at least 66 2/3% of the voting power of the then outstanding shares
of all classes of capital stock of the Company generally possessing voting
rights in the election of directors, voting together as a single class, shall
be required. Pursuant to the WBCL and the Bylaws, the directors will each be
elected by a plurality of the votes cast at the Special Meeting, assuming a
quorum (a majority of the votes entitled to be cast on such matter) is
present. The nominees of Parent are committed, subject to their fiduciary
duties, to giving all of the Company's shareholders the opportunity to accept
the Offer and receive $19 for each of their Common Shares.
Under the WBCL and the Bylaws, a special meeting of the Company's
shareholders is required to be held upon the written demand of the holders of
record of shares representing at least 10% of all the votes entitled to be
cast on any issue proposed to be considered at the Special Meeting (the
"Requisite Holders"). Under the Bylaws, the Company's Board of Directors may
fix a record date to determine the shareholders entitled to make such a demand
(a "Demand Record Date"). On April 28, 1997, the Purchaser (as the holder of
record of 1,000 Common Shares) delivered to the Secretary of the Company a
written request, in accordance with the Bylaws, that the Company's Board of
Directors fix a Demand Record Date. The Bylaws also provide that shareholders
executing written demands, under certain circumstances, must agree to
reimburse the Company for certain costs in connection with the Special
Meeting. Parent and the Purchaser have agreed to bear those costs and
reimburse reasonable expenses incurred in connection therewith.
The Special Meeting has not been called, and no date, time, place or record
date for the Special Meeting has been set. Once Parent has received Written
Demands from the Requisite Holders and timely delivers them to the Company,
the Company is required under the Bylaws to call and hold the Special Meeting
within 100 days. Shareholders will be notified of the date, time, place and
record date of the Special Meeting after they are fixed.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES OR WRITTEN DEMANDS
FOR ANY MEETING OF THE COMPANY'S SHAREHOLDERS. ANY SUCH SOLICITATION WILL BE
MADE ONLY PURSUANT TO PROXY OR OTHER SOLICITING MATERIALS COMPLYING WITH THE
REQUIREMENTS OF SECTION 14(a) OF THE EXCHANGE ACT AND THE RULES AND
REGULATIONS THEREUNDER.
CERTAIN CONDITIONS TO THE OFFER
The Offer is subject to the fulfillment of a number of conditions including,
without limitation, the following:
MINIMUM CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED UPON THERE BEING
VALIDLY TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT PROPERLY
4
<PAGE>
WITHDRAWN A NUMBER OF COMMON SHARES (THE "MINIMUM NUMBER OF SHARES") WHICH,
WHEN ADDED TO THE COMMON SHARES BENEFICIALLY OWNED BY THE PURCHASER AND ITS
AFFILIATES, CONSTITUTES AT LEAST A MAJORITY OF THE TOTAL VOTING POWER OF ALL
SHARES OF CAPITAL STOCK OF THE COMPANY OUTSTANDING ON A FULLY DILUTED BASIS ON
THE DATE OF PURCHASE (THE "MINIMUM CONDITION"). For purposes of the Offer, "on
a fully diluted basis" means, as of any date, the number of Common Shares
outstanding, together with Common Shares that the Company could then be
required to issue pursuant to options outstanding at that date under stock or
option or other incentive plans (assuming all such options are then
exercisable) or otherwise (other than in connection with the Rights
Agreement).
According to the Company's Annual Report on Form 10-K for the Fiscal Year
Ended December 31, 1996 (the "Company 10-K"), filed with the Securities and
Exchange Commission (the "Commission") on March 28, 1997, there were
33,186,898 Common Shares outstanding as of March 10, 1997 and, as of December
31, 1996, there were outstanding pursuant to one or more of the Company's
stock or option or other incentive plans options to purchase 1,105,712 Common
Shares, 576,271 of which were exercisable as of such date. According to the
Company's Proxy Statement dated as of March 21, 1997 filed with the Commission
in connection with the Company's Annual Meeting of Shareholders to be held
April 30, 1997 (the "Company Annual Proxy Statement"), on March 13, 1997,
certain members of the Company's senior management team and other key
employees purchased an aggregate of 282,355 Common Shares upon the exercise of
options in connection with the Company's Management Stock Purchase Program
(the "MSPP") adopted by the Company that same day. According to the Company's
publicly filed documents, the Company has no class of capital stock issued and
outstanding as of the date hereof other than the Common Shares.
Based upon the foregoing, assuming no options have been issued since
December 31, 1996 (other than options exercised in connection with the MSPP,
which are assumed to have been issued on the date of exercise) or will be
issued prior to consummation of the Offer, and assuming no Common Shares have
been issued or cancelled since December 31, 1996 (other than Common Shares
issued upon the exercise of options outstanding on December 31, 1996 or
exercised in connection with the MSPP) or will be issued or cancelled prior to
the consummation of the Offer, there would be 34,574,965 Common Shares
outstanding on a fully diluted basis. Parent and the Purchaser own 789,600
Common Shares beneficially, 789,600 of which are beneficially owned by Parent
(1,000 of which are also beneficially owned and held of record by the
Purchaser). Such Common Shares represent approximately 2.4% of the Common
Shares outstanding, on a primary share basis, as of March 10, 1997, according
to the Company 10-K. Thus, based on the foregoing assumptions, 16,497,883
Common Shares would be the Minimum Number of Shares. However, the actual
Minimum Number of Shares will depend upon the facts as they exist on the date
of purchase. For purposes of the foregoing calculations, the Purchaser has
assumed that the Common Shares issued in connection with the MSPP are
outstanding; however, Parent has asserted in litigation against the Company
that as a result of the Company's economic interest in the Common Shares
nominally owned by individual executives (as disclosed in the Company's
publicly filed documents), Common Shares issued in connection with the MSPP
are not, for certain purposes, outstanding, but are instead treasury stock
that may not be voted and may not be counted toward certain calculations,
including the calculation of the number of votes required to approve a motion
or elect directors at a meeting of shareholders. Any assumptions made herein
are made without prejudice to the Purchaser's position with respect to such
issue. See Section 15. In addition, the Company 10-K discloses that on July
18, 1996 the Company announced that its Board of Directors had authorized the
Company's management to repurchase up to 10% of the Company's outstanding
Common Shares (3,500,000 Common Shares) and that at December 31, 1996, the
Company had repurchased 1,500,000 Common Shares. On March 18, 1997, the
Company announced that it had nearly completed its 10% share repurchase
program and that its Board of Directors had approved the repurchase of an
additional 10% of its outstanding Common Shares.
RIGHTS CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED UPON THE RIGHTS
HAVING BEEN REDEEMED BY THE COMPANY'S BOARD OF DIRECTORS OR THE PURCHASER
BEING SATISFIED, IN ITS REASONABLE JUDGMENT, THAT THE RIGHTS HAVE BEEN
INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER
(THE "RIGHTS CONDITION").
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According to the Company 10-K and the Company's Registration Statement on
Form 8-A dated August 23, 1995 (the "Company 8-A"), on August 23, 1995 the
Company adopted the Rights Agreement and the Company's Board of Directors
declared a dividend of one Right for each outstanding Common Share. The
Company 10-K states that each Right entitles the registered holder thereof to
purchase one one-hundredth of a share of the Company's Class A Preferred
Stock, Series B at an initial exercise price of $60 per one one-hundredth of a
share or, upon the occurrence of certain events, common stock or other
property having a value of twice the exercise price, and that the Rights will
become operative in the event that certain change in control events occur. The
Rights are described in the Company 8-A, and such description of the Rights is
summarized in Section 8.
According to the Company 8-A, the Rights Agreement provides that, until the
Distribution Date (as defined in the Rights Agreement (see Section 8)), the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificates. The Rights Agreement further provides that,
as soon as practicable following the Distribution Date, separate certificates
representing the Rights are to be mailed to holders of record of Common Shares
as of the close of business on the Distribution Date and that such separate
Rights Certificates (as defined herein) alone will evidence the Rights.
Based on publicly available information, the Purchaser believes that, as of
the date hereof, the Rights are not exercisable, certificates for Rights have
not been issued and the Rights are evidenced by the certificates for Common
Shares. The Purchaser believes that, as a result of the Purchaser's
announcement on April 25, 1997 of its intention to commence the Offer, the
Distribution Date may occur as early as May 9, 1997, unless prior to such date
the Company's Board of Directors defers the Distribution Date, redeems the
Rights or amends the Rights Agreement to render the Rights inapplicable to the
Offer and the Proposed Merger.
Unless the Rights Condition is satisfied, shareholders will be required to
tender one Right for each Common Share tendered in order to effect a valid
tender of Common Shares in accordance with the procedures set forth in Section
2. Unless the Distribution Date occurs prior to the Expiration Date, a tender
of Common Shares will also constitute a tender of the associated Rights.
According to the Company 8-A, the Rights Agreement provides that, at any
time prior to a person becoming an Acquiring Person (as defined in the Rights
Agreement (see Section 8)), the Company's Board of Directors may redeem the
Rights in whole, but not in part, at a price of $.01 per Right. In addition,
the Company 8-A also states that, other than provisions relating to principal
economic terms of the Rights, the terms of the Rights may be amended by the
Company's Board of Directors without the consent of the holders of the Rights,
except that from and after the Distribution Date no such amendment may
adversely affect the interests of the holders of the Rights.
Parent and the Purchaser are requesting that the Company's Board of
Directors redeem the Rights. Redemption of the Rights (or an amendment of the
Rights Agreement which the Purchaser is satisfied, in its reasonable judgment,
renders the Rights inapplicable to the Offer and the Proposed Merger) would
satisfy the Rights Condition. There can be no assurance that the Company's
Board of Directors will take such action. In the event that the Company's
Board of Directors fails to do so prior to the intended date of the
consummation of the Offer, the Purchaser expects its nominees to the Company's
Board of Directors, if elected at the Special Meeting, and subject to their
fiduciary duties, to take such appropriate action as shall result in the
satisfaction of the Rights Condition. Parent and the Purchaser have commenced
litigation against the Company and certain of its directors seeking, among
other things, that the Rights be redeemed. See Section 15.
BUSINESS COMBINATION CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED
UPON THE PURCHASER BEING SATISFIED, IN ITS REASONABLE JUDGMENT, THAT THE
RESTRICTIONS CONTAINED IN SECTION 180.1141 OF THE WBCL (THE "WISCONSIN
BUSINESS COMBINATION LAW") WILL NOT APPLY TO THE ACQUISITION OF COMMON SHARES
PURSUANT TO THE OFFER OR THE PROPOSED MERGER (THE "BUSINESS COMBINATION
CONDITION").
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The Wisconsin Business Combination Law prohibits certain business
combinations and other transactions (each, a "Section 1141 Transaction"), such
as the Proposed Merger, between a Wisconsin resident domestic corporation
(such as the Company) and any "Interested Stockholder" (defined generally as
any person that, directly or indirectly, owns or, subject to certain
exceptions, has the right to exercise 10% or more of the voting power of the
outstanding voting stock of a Wisconsin resident domestic corporation) for a
period of three years after the date the person becomes an Interested
Stockholder. After such three year period, a Section 1141 Transaction between
a Wisconsin resident domestic corporation and such Interested Stockholder is
prohibited unless (a) certain "fair price" provisions are complied with, (b)
the Section 1141 Transaction is approved by the affirmative vote of the
holders of a majority of the voting stock not beneficially owned by the
Interested Stockholder or (c) the acquisition of stock resulting in such
stockholder becoming an Interested Stockholder was approved by the
corporation's board of directors prior to the relevant acquisition date. The
Wisconsin Business Combination Law restrictions do not apply to a Section 1141
Transaction with an Interested Stockholder within three years of the date such
stockholder became an Interested Stockholder if either (x) the Interested
Stockholder's acquisition of the corporation's shares on the date the
Interested Stockholder became an Interested Stockholder or (y) the Section
1141 Transaction, is approved by the board of directors of the corporation
prior to the date on which the Interested Stockholder became an Interested
Stockholder. See Section 15.
Parent and the Purchaser are requesting that the Company's Board of
Directors take appropriate action so that the Wisconsin Business Combination
Law is not applicable to the acquisition of Common Shares pursuant to the
Offer or the Proposed Merger. There can be no assurance that the Company's
Board of Directors will do so. In the event that the Company's Board of
Directors fails to do so prior to the intended date of the consummation of the
Offer, the Purchaser expects its nominees to the Company's Board of Directors,
if elected at the Special Meeting, and subject to their fiduciary duties, to
take such appropriate action as shall result in the satisfaction of the
Business Combination Condition.
The WBCL contains certain other provisions restricting certain business
combinations and other transactions with significant shareholders under
certain circumstances and limiting, under certain circumstances, the voting
power of a shareholder that holds in excess of 20% of the voting power of
certain corporations. The Articles of Incorporation indicate, however, that
the Company has elected not to have such provisions apply to the Company. It
is a condition of the Offer that such provisions not be deemed applicable to
the Offer or the purchase of Common Shares by the Purchaser or Parent. See
Section 14.
Certain other conditions to the Offer are described in Section 14. Subject
to the applicable rules and regulations of the Commission, the Purchaser
expressly reserves the right, in its sole discretion, to waive, in whole or in
part, any one or more of the conditions to the Offer. See Sections 14 and 15.
The Offer is not conditioned upon the receipt of financing.
In the event the Offer is not consummated, Parent and the Purchaser intend
to explore all options which may be available to them at such time, which may
include, without limitation, the acquisition of Common Shares through open
market purchases, privately negotiated transactions, another tender offer or
exchange offer, or otherwise upon such terms and at such prices as they shall
determine, which may be at prices other than the price to be paid pursuant to
the Offer. Parent and the Purchaser also reserve the right to dispose of
Common Shares.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
SECTION 1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for all Common
Shares validly tendered prior to the Expiration Date and not properly
withdrawn in accordance with
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the procedures set forth in Section 3. The term "Expiration Date" means 12:00
midnight, New York City time, on Friday, May 23, 1997, unless and until the
Purchaser, in its sole discretion, shall have extended the period of time
during which the Offer is open, in which event the term "Expiration Date"
shall mean the latest time and date at which the Offer, as so extended by the
Purchaser, will expire. In light of the time periods required for the
fulfillment of certain conditions of the Offer, Parent and the Purchaser
expect that the Offer may be extended from time to time as described below.
There can be no assurance, however, that the Purchaser will exercise its right
to extend the Offer.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM CONDITION, THE RIGHTS CONDITION, THE BUSINESS COMBINATION CONDITION,
THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED BY THE HART-
SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER (THE "HSR ACT"), AND THE SATISFACTION OF THE OTHER
CONDITIONS SET FORTH IN SECTION 14. THE OFFER IS NOT CONDITIONED UPON THE
RECEIPT OF FINANCING.
Subject to the applicable rules and regulations of the Commission, the
Purchaser reserves the right, in its sole discretion, at any time and from
time to time, and regardless of whether or not any of the events set forth in
Section 14 hereof shall have occurred or shall have been determined by the
Purchaser to have occurred, to (a) extend the period of time during which the
Offer is open, and thereby delay acceptance for payment of and the payment for
any Common Shares, by giving oral or written notice of such extension and
delay to the Depositary and (b) waive any condition or amend the Offer in any
other respect by giving oral or written notice of such waiver or amendment to
the Depositary. During any such extension, all Common Shares previously
tendered and not properly withdrawn will remain subject to the Offer, subject
to the right of a tendering shareholder to withdraw such shareholder's Common
Shares. See Section 3. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE FOR TENDERED COMMON SHARES AND RIGHTS, WHETHER OR NOT THE
PURCHASER EXERCISES ITS RIGHT TO EXTEND THE OFFER.
If by 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 Commission,
to (a) terminate the Offer and not accept for payment or pay for any Common
Shares and return all tendered Common Shares to tendering shareholders, (b)
waive all the unsatisfied conditions and accept for payment and pay for all
Common Shares validly tendered prior to the Expiration Date and not
theretofore properly withdrawn, (c) extend the Offer and, subject to the right
of shareholders to withdraw Common Shares, retain the Common Shares that have
been tendered during the period or periods for which the Offer is extended or
(d) amend the Offer.
The rights reserved by the Purchaser in the two preceding paragraphs are in
addition to the Purchaser's rights pursuant to Section 14. 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 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 information published, sent or given
to shareholders in connection with the Offer be promptly disseminated to
shareholders in a manner reasonably designed to inform shareholders 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 Common Shares) for Common Shares or it is unable to
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pay for Common Shares pursuant to the Offer for any reason, then, without
prejudice to the Purchaser's rights under the Offer, the Depositary may retain
tendered Common Shares on behalf of the Purchaser, and such Common Shares may
not be withdrawn except to the extent tendering shareholders are entitled to
withdrawal rights as described in Section 3. The ability of the Purchaser to
delay the payment for Common Shares that the Purchaser has accepted for
payment is limited, however, by Rule 14e-1(c) under the Exchange Act, which
requires that a bidder pay the consideration offered or return the securities
tendered 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 extend the Offer and disseminate additional tender offer
materials to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under
the Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. In the
Commission's view, an offer should generally remain open for a minimum of five
business days from the date a material change is first published, sent or
given to shareholders. With respect to a change in price or, subject to
certain limitations, a change in the percentage of securities sought, a
minimum period of 10 business days is generally required to allow for adequate
dissemination to shareholders and investor response. Accordingly, if prior to
the Expiration Date, the Purchaser decreases the number of Common Shares being
sought, or increases or decreases the consideration offered pursuant to the
Offer, and if the Offer is scheduled to expire at any time earlier than the
period ending on the tenth business day from the date that notice of such
increase or decrease is first published, sent or given to holders of Common
Shares, the Offer will be extended at least until the expiration of such 10
business day period.
On April 28, 1997, requests were made to the Company pursuant to Rules 14d-5
and 14a-7 under the Exchange Act and Section 180.0720 of the WBCL for the use
of the Company's shareholder lists and security position listings for the
purpose of, among other things, disseminating the Offer to holders of Common
Shares and communicating with shareholders regarding the Written Demands, the
proxy solicitations in connection with the Special Meeting and their mutual
interest in facilitating their ability to determine the future of the Company,
as well as to assist the Purchaser in determining the applicability of the
Wisconsin Corporate Take-Over Law (as defined in Section 15), if any, to the
Offer. This Offer to Purchase, the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Common 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
shareholder lists, or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Common Shares, by the Purchaser following receipt of such
lists or listings from the Company, or by the Company if it so elects.
SECTION 2. PROCEDURES FOR TENDERING COMMON SHARES
Valid Tender. For a shareholder validly to tender Common Shares and Rights
pursuant to the Offer, either (a) a properly completed and duly executed
Letter of Transmittal, together with any required signature guarantees, or, in
the case of a book-entry transfer, an Agent's Message (as defined herein), and
any other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date and either certificates for tendered Common Shares and Rights
must be received by the Depositary at one of such addresses or such Common
Shares and Rights must be delivered pursuant to the procedures for book-entry
transfer set forth below (and a Book-Entry Confirmation (as defined herein)
received by the Depositary), in each case prior to the Expiration Date, or (b)
the tendering shareholder must comply with the guaranteed delivery procedures
set forth below.
Unless the Rights Condition is satisfied, shareholders will be required to
tender one Right for each Common Share tendered in order to effect a valid
tender of Common Shares. Accordingly, shareholders who sell their Rights
separately from their Common Shares and do not otherwise acquire Rights may
not be able to satisfy the requirements of the Offer for a valid tender of
Common Shares. Unless the Distribution Date occurs, a tender of Common Shares
will also constitute a tender of the associated Rights.
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If the Distribution Date occurs and certificates representing Rights
("Rights Certificates") are distributed by the Company or the Rights Agent to
holders of Common Shares prior to the time a holder's Common Shares are
tendered pursuant to the Offer, in order for Rights (and the corresponding
Common Shares) to be validly tendered, Rights Certificates representing a
number of Rights equal to the number of Common Shares tendered must be
delivered to the Depositary or, if available, a Book-Entry Confirmation
received by the Depositary with respect thereto. If the Distribution Date
occurs and Rights Certificates are not distributed prior to the time Common
Shares are tendered pursuant to the Offer, Rights may be tendered prior to a
shareholder receiving Rights Certificates by use of the guaranteed delivery
procedure described below. In any case, a tender of Common Shares constitutes
an agreement by the tendering shareholder to deliver Rights Certificates
representing a number of Rights equal to the number of Common Shares tendered
pursuant to the Offer to the Depositary within three business days after the
date Rights Certificates are distributed. The Purchaser reserves the right to
require that the Depositary receive Rights Certificates, or a Book-Entry
Confirmation, if available, with respect to such Rights, prior to accepting
the related Common Shares for payment pursuant to the Offer if the
Distribution Date occurs prior to the Expiration Date.
Book-Entry Transfer. The Depositary will make a request to establish
accounts with respect to the Common Shares at The Depository Trust Company and
the Philadelphia Depository Trust Company (the "Book-Entry Transfer
Facilities") for purposes of the Offer within two business days after the date
of this Offer to Purchase. Any financial institution that is a participant in
any of the Book-Entry Transfer Facilities' systems may make book-entry
delivery of Common Shares by causing a Book-Entry Transfer Facility to
transfer such Common Shares into the Depositary's account in accordance with
such Book-Entry Transfer Facility's procedures for such transfer. Although
delivery of Common Shares may be effected through book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or an Agent's Message, and any other
required documents, must, in any case, be transmitted to, and received by, the
Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date, or the tendering shareholder must
comply with the guaranteed delivery procedures described below.
If the Distribution Date occurs, the Depositary will also make a request to
establish an account with respect to the Rights at each of the Book-Entry
Transfer Facilities, but no assurance can be given that book-entry delivery of
Rights will be available. If book-entry delivery of Rights is available, the
foregoing book-entry transfer procedures will also apply to Rights. If book-
entry delivery of Rights is not available and the Distribution Date occurs, a
tendering shareholder will be required to tender Rights by means of physical
delivery (including with respect to the guaranteed delivery procedures set
forth below) of Rights Certificates to the Depositary (in which event
references in this Offer to Purchase to Book-Entry Confirmations with respect
to Rights will be inapplicable).
The confirmation of a book-entry transfer of Common Shares or Rights into
the Depositary's account at a Book-Entry Transfer Facility as described above
is referred to herein as a "Book-Entry Confirmation." DELIVERY OF DOCUMENTS TO
A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Common 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 such participant.
THE METHOD OF DELIVERY OF COMMON SHARES, RIGHTS, THE LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER.
COMMON SHARES, RIGHTS, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED
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DOCUMENTS WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY
CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (a) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant
in any of the Book-Entry Transfer Facilities' systems whose name appears on a
security position listing as the owner of the Common Shares) of Common Shares
and Rights tendered therewith and such registered holder has not completed
either the box entitled "Special Delivery Instructions" or the box entitled
"Special Payment Instructions" on the Letter of Transmittal or (b) if such
Common Shares and Rights are tendered for the account of a financial
institution (including most commercial banks, savings and loan associations
and brokerage houses) that is a member in good standing of the Securities
Transfer Agents Medallion Program (an "Eligible Institution"). In all other
cases, all signatures on the Letter of Transmittal must be guaranteed by an
Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal.
If the certificates for Common Shares or Rights are registered in the name of
a person other than the signer of the Letter of Transmittal, or if payment is
to be made or certificates for Common Shares or Rights not tendered or not
accepted for payment are to be returned to a person other than the registered
holder of the certificates surrendered, the tendered certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered holders appear on the
certificates, with the signatures on the certificates or stock powers
guaranteed as described above. See Instructions 1 and 5 to the Letter of
Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Common Shares and
Rights pursuant to the Offer and such shareholder's certificates for Common
Shares or Rights are not immediately available (including because Rights
Certificates have not yet been distributed by the Rights Agent) or the
procedure for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Depositary prior to
the Expiration Date, such shareholder's tender may be effected if all the
following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary, as provided below, on or prior to the Expiration Date;
and
(iii) the certificates, representing all tendered Common Shares and/or
Rights, in proper form for transfer (or a Book-Entry Confirmation with
respect to all such Common Shares and/or Rights), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message, and any other required documents are received
by the Depositary within (a) in the case of Common Shares, three trading
days after the date of execution of such Notice of Guaranteed Delivery or
(b) in the case of Rights, a period ending on the later of (1) three
trading days after the date of execution of such Notice of Guaranteed
Delivery or (2) three business days (as defined above) after the date
Rights Certificates are distributed to shareholders by the Rights Agent. A
"trading day" is any day on which The Nasdaq Stock Market, Inc.'s National
Market is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mail to the Depositary
and must include a guarantee by an Eligible Institution in the form set forth
in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Common Shares
accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of (a) certificates for (or a
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timely Book-Entry Confirmation with respect to) such Common Shares and, if the
Distribution Date occurs, Rights Certificates for (or a timely Book-Entry
Confirmation, if available, with respect to) the associated Rights, (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 shareholders may be paid at
different times depending upon when certificates for Common Shares (or Rights)
or Book-Entry Confirmations with respect to Common Shares (or Rights, if
available) are actually received by the Depositary. UNDER NO CIRCUMSTANCES
WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE COMMON SHARES AND RIGHTS TO
BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT.
If the Rights Condition is satisfied, the guaranteed delivery procedures
with respect to Rights Certificates and the requirement for the tender of
Rights will no longer apply.
Appointment as Proxy. By executing a Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints designees of the Purchaser
and each of them as such shareholder's attorneys-in-fact and proxies in the
manner set forth in the Letter of Transmittal, each with full power of
substitution, to the full extent of such shareholder's rights with respect to
the Common Shares and Rights tendered by such shareholder and accepted for
payment by the Purchaser and with respect to any and all other Common Shares,
Rights or other securities or rights issued or issuable in respect of such
Common Shares and Rights on or after April 18, 1997 (the "Applicable Date").
All such powers of attorney and proxies will be irrevocable and considered
coupled with an interest in the tendered Common Shares and Rights. Such
appointment will be effective when, and only to the extent that, the Purchaser
accepts such Common Shares and Rights for payment pursuant to the Offer. Upon
such acceptance for payment, all prior powers of attorney, proxies and
consents given by such shareholder with respect to such Common Shares, Rights
and other securities or rights will, without further action, be revoked and no
subsequent powers of attorney, proxies, consents or revocations may be given
(and, if given, will not be deemed effective). The designees of the Purchaser
will thereby be empowered to exercise all voting and other rights with respect
to such Common Shares, Rights and other securities or rights in respect of any
annual, special, adjourned or postponed meeting of the Company's shareholders,
actions by written consent in lieu of any such meeting or otherwise, as they
in their sole discretion deem proper. The Purchaser reserves the right to
require that, in order for Common Shares and Rights to be deemed validly
tendered, immediately upon the Purchaser's acceptance for payment of such
Common Shares and Rights, the Purchaser must be able to exercise full voting,
consent and other rights with respect to such Common Shares, Rights and other
securities or rights, including voting at any meeting of shareholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tender of Common Shares or Rights will be determined by the Purchaser, in its
sole discretion, whose determination will be final and binding on all parties.
The Purchaser reserves the absolute right to reject any or all tenders
determined by it not to be in proper form or the acceptance for payment of or
payment for which may, in the opinion of the Purchaser's counsel, be unlawful.
The Purchaser also reserves the absolute right to waive any condition of the
Offer or any defect or irregularity in the tender of any Common Shares or
Rights of any particular shareholder whether or not similar defects or
irregularities are waived in the case of other shareholders. No tender of
Common Shares or Rights will be deemed to have been validly made until all
defects or irregularities relating thereto have been cured or waived. None of
the Purchaser, Parent, any of their affiliates or assigns, the Depositary, the
Information Agents, 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
interpretation of the terms and conditions of the Offer (including the Letter
of Transmittal and the instructions thereto) will be final and binding on all
parties.
Backup Withholding. In order to avoid "backup withholding" of federal income
tax on payments of cash pursuant to the Offer, a shareholder surrendering
Common Shares in the Offer must, unless an exemption applies, provide the
Depositary with such shareholder's correct taxpayer identification number
("TIN") on a Substitute Form W-9 and certify under penalties of perjury that
such TIN is correct and that such shareholder is not subject
12
<PAGE>
to backup withholding. If a shareholder does not provide such shareholder's
correct TIN or fails to provide the certifications described above, the
Internal Revenue Service (the "IRS") may impose a penalty on such shareholder
and the payment of cash to such shareholder pursuant to the Offer may be
subject to backup withholding of 31%. All shareholders surrendering Common
Shares pursuant to the Offer should complete and sign the main signature form
and the Substitute Form W-9 included as part of the Letter of Transmittal to
provide the information and certification necessary to avoid backup
withholding (unless an applicable exemption exists and is proved in a manner
satisfactory to the Purchaser and the Depositary). Certain shareholders
(including, among others, all corporations and certain foreign individuals and
entities) are not subject to backup withholding. Noncorporate foreign
shareholders should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 11 to the
Letter of Transmittal and "Important Tax Information" therein.
Other Requirements. The Purchaser's acceptance for payment of Common Shares
and, if applicable, Rights tendered pursuant to any of the procedures
described above will constitute a binding agreement between the tendering
shareholder and the Purchaser upon the terms and subject to the conditions of
the Offer, including the tendering shareholder's representation and warranty
that the shareholder is the holder of the Common Shares (and, if applicable,
the Rights) within the meaning of, and that the tender of the Common Shares
and Rights complies with, Rule 14e-4 under the Exchange Act.
SECTION 3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Common Shares and
Rights pursuant to the Offer are irrevocable. Common Shares and Rights
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 June 26, 1997. If the Purchaser extends the Offer,
is delayed in its acceptance for payment of Common Shares and Rights or is
unable to purchase Common Shares and Rights 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 Common Shares and Rights and such Common Shares and Rights may not be
withdrawn except to the extent that tendering shareholders are entitled to
withdrawal rights as described in this Section 3. Any such delay will be
accompanied by an extension of the Offer to the extent required by law. Common
Shares or Rights may not be withdrawn unless the associated Rights or Common
Shares, as the case may be, are also withdrawn. A withdrawal of Common Shares
or Rights will also constitute a withdrawal of the associated Rights or Common
Shares, as the case may be.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Common Shares and
Rights to be withdrawn, the number of Common Shares and Rights to be withdrawn
and the name of the registered holder of the Common Shares and Rights to be
withdrawn, if different from the name of the person who tendered the Common
Shares and Rights. If certificates for Common Shares or Rights have been
delivered or otherwise identified to the Depositary, then, prior to the
physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and, unless such Common
Shares or Rights have been tendered by an Eligible Institution, the signatures
on the notice of withdrawal must be guaranteed by an Eligible Institution. If
Common Shares or Rights have been delivered pursuant to the procedure for
book-entry transfer as set forth in Section 2, any notice of withdrawal must
also specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Common Shares or Rights
and otherwise comply with such Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Common Shares or Rights may not be rescinded, and
any Common Shares or Rights properly withdrawn will thereafter be deemed not
validly tendered for purposes of the Offer. Withdrawn Common Shares and
Rights, however, may be retendered by again following one of the procedures
described in Section 2 at any time on or prior to the Expiration Date.
13
<PAGE>
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding on all parties. None
of the Purchaser, Parent, any of their affiliates or assigns, the Depositary,
the Information Agents, 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.
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay for all
Common Shares validly tendered on or prior to the Expiration Date and not
properly withdrawn in accordance with Section 3 promptly after the Expiration
Date. All questions as to the satisfaction of such terms and conditions will
be determined by the Purchaser, in its reasonable judgment, whose
determination will be final and binding on all parties. See Sections 1 and 14.
The Purchaser expressly reserves the right, in its sole discretion, to delay
acceptance for payment of or payment for Common Shares in order to comply in
whole or in part with any applicable law, including, without limitation, the
HSR Act. See Section 15. Any such delays will be effected in compliance with
Rule 14e-1(c) under the Exchange Act (relating to a bidder's obligation to pay
for or return tendered securities promptly after the termination or withdrawal
of such bidder's offer).
On the date hereof, Parent expects to file a Notification and Report Form
with respect to the Offer under the HSR Act. The waiting period under the HSR
Act with respect to the Offer will expire at 11:59 p.m., New York City time,
on the fifteenth calendar day after the date of such filing, unless early
termination of the waiting period is granted. The Antitrust Division of the
Department of Justice (the "Antitrust Division") or the Federal Trade
Commission (the "FTC") may, however, extend the waiting period by requesting
additional information or documentary material from Parent. If such a request
is made, such waiting period will expire at 11:59 p.m., New York City time, on
the tenth day after substantial compliance by Parent with such request.
Thereafter, the waiting period may only be extended by court order or with the
consent of Parent. See Section 15 hereof for additional information concerning
the HSR Act and the applicability of the antitrust laws to the Offer. In all
events, acceptance for payment and payment for Common Shares is conditioned
upon and will not occur until the Purchaser, in its reasonable judgment, is
satisfied that all applicable waiting periods relevant under antitrust laws
have expired without any requests for further information or objections to the
transactions contemplated by the Offer and the Proposed Merger by any
Governmental Entity (as defined herein). See Section 14.
In all cases, payment for Common 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
Common Shares, and, if the Distribution Date occurs, Rights Certificates for
(or a timely Book-Entry Confirmation with respect to) the associated Rights,
(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. The consideration per Common Share paid to any
shareholder pursuant to the Offer will be the highest consideration paid to
any other holder of the same class of shares pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Common Shares validly tendered to the
Purchaser and not withdrawn as, if and when the Purchaser gives oral or
written notice to the Depositary of the Purchaser's acceptance for payment of
such Common Shares pursuant to the Offer. Upon the terms and subject to the
conditions of the Offer, payment for Common 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 validly tendering
shareholders for the purpose of receiving payment from the Purchaser and
transmitting payment to tendering shareholders. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE OF THE COMMON SHARES AND RIGHTS TO BE
PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY
IN MAKING SUCH PAYMENT. Upon the deposit of funds with the Depositary for the
purpose of making payments to tendering shareholders, the Purchaser's
obligation to make such payment shall be satisfied and
14
<PAGE>
tendering shareholders must thereafter look solely to the Depositary for
payment of amounts owed to them by reason of the acceptance for payment of
Common Shares pursuant to the Offer. The Purchaser will pay any stock transfer
taxes with respect to the transfer and sale to it or its order pursuant to the
Offer, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, as well as any charges and expenses of the Depositary and the
Information Agents.
If the Purchaser is delayed in its acceptance for payment of or payment for
Common Shares or is unable to accept for payment or pay for Common Shares
pursuant to the Offer for any reason, then, without prejudice to the
Purchaser's rights under the Offer (but subject to compliance with Rule 14e-
1(c) under the Exchange Act), the Depositary may, nevertheless, on behalf of
the Purchaser, retain tendered Common Shares, and such Common Shares may not
be withdrawn except to the extent tendering shareholders are entitled to
exercise, and duly exercise, withdrawal rights as described in Section 3.
If any tendered Common Shares are not purchased pursuant to the Offer for
any reason, certificates for any such unpurchased Common Shares (and the
associated Rights) will be returned, without expense to the tendering
shareholder (or, in the case of Common Shares or Rights delivered by book-
entry transfer of such Common Shares or Rights into the Depositary's account
at a Book-Entry Transfer Facility pursuant to the procedure set forth in
Section 2, such Common Shares or Rights will be credited to an account
maintained at the appropriate Book-Entry Transfer Facility), as promptly as
practicable after the expiration, termination or withdrawal of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or in part,
from time to time, to Parent, or to one or more direct or indirect wholly
owned subsidiaries of Parent, the right to purchase Common Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
the Purchaser of its obligations under the Offer and will in no way prejudice
the rights of tendering shareholders to receive payment for Common Shares
validly tendered and accepted for payment pursuant to the Offer.
SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash pursuant to the Offer or the Proposed Merger will be a
taxable transaction for federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and may also be a taxable transaction
under applicable state, local or foreign income or other tax laws. Generally,
for federal income tax purposes, a tendering shareholder will recognize gain
or loss equal to the difference between the amount of cash received by the
shareholder pursuant to the Offer or the Proposed Merger and the aggregate tax
basis in the Common Shares (together with the Rights) tendered by the
shareholder and purchased pursuant to the Offer or converted in the Proposed
Merger, as the case may be. Gain or loss will be calculated separately for
each block (i.e., Common Shares and Rights acquired at the same time in a
single transaction) of Common Shares and Rights tendered and purchased
pursuant to the Offer or converted in the Proposed Merger, as the case may be.
If Common Shares (and associated Rights) are held by a shareholder as
capital assets, gain or loss recognized by the shareholder will be capital
gain or loss, which will be long-term capital gain or loss if the
shareholder's holding period for the Common Shares (and associated Rights)
exceeds one year.
A shareholder (other than certain exempt shareholders including, among
others, all corporations and certain foreign individuals and entities) that
tenders Common Shares may be subject to 31% backup withholding unless the
shareholder provides its TIN and certifies that such number is correct or
properly certifies that it is awaiting a TIN, or unless an exemption applies.
A shareholder that does not furnish its TIN may be subject to a penalty
imposed by the IRS. See Section 2.
If backup withholding applies to a shareholder, the Depositary is required
to withhold 31% from payments to such shareholder. Backup withholding is not
an additional tax. Rather, the amount of the backup withholding can be
credited against the federal income tax liability of the person subject to the
backup withholding, provided
15
<PAGE>
that the required information is given to the IRS. If backup withholding
results in an overpayment of tax, a refund can be obtained by the shareholder
upon filing an appropriate income tax return.
THE FOREGOING DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY
NOT BE APPLICABLE WITH RESPECT TO COMMON SHARES (AND ASSOCIATED RIGHTS)
RECEIVED PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS
COMPENSATION OR WITH RESPECT TO HOLDERS OF COMMON SHARES (AND ASSOCIATED
RIGHTS) WHO ARE SUBJECT TO SPECIAL TAX TREATMENT UNDER THE CODE, SUCH AS NON-
U.S. PERSONS, LIFE INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS AND FINANCIAL
INSTITUTIONS, AND MAY NOT APPLY TO A HOLDER OF COMMON SHARES (AND ASSOCIATED
RIGHTS) IN LIGHT OF INDIVIDUAL CIRCUMSTANCES. THE FOREGOING DISCUSSION DOES
NOT ADDRESS THE IMPACT OF ANY POTENTIAL CHANGES OF TAX LAW, WHICH COULD BE
RETROACTIVE AND AFFECT THE CONSEQUENCES DESCRIBED ABOVE. SHAREHOLDERS 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 OR ANY CHANGES OF LAW) OF THE OFFER AND
THE PROPOSED MERGER.
SECTION 6. PRICE RANGE OF COMMON SHARES; DIVIDENDS ON THE COMMON SHARES
The Common Shares are traded on The Nasdaq Stock Market, Inc.'s ("NASDAQ")
National Market (the "Nasdaq NM") under the symbol GIDL. The following table
sets forth the high and low last reported sales prices per Common Share
together with the per Common Share dividends paid by the Company for the
periods indicated, as reported in the Company's Annual Reports on Form 10-K
for fiscal year 1996, and as reported in publicly available sources
thereafter.
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
------ ----- ---------
<S> <C> <C> <C>
Fiscal Year Ended December 31, 1995:
First quarter.................................. $17 1/4 $14 5/8 $.03
Second quarter................................. 18 7/8 15 1/8 .03
Third quarter.................................. 18 1/2 16 .03
Fourth quarter................................. 17 3/8 14 7/8 .03
Fiscal Year Ended December 31, 1996:
First quarter.................................. 19 9/16 14 3/4 .03
Second quarter................................. 19 1/8 16 1/8 .03
Third quarter.................................. 16 10 3/4 .03
Fourth quarter................................. 14 11 3/8 .03
Fiscal Year Ended December 31, 1997:
First quarter.................................. 14 7/8 12 47/64 .03
Second quarter (through April 25, 1997)........ 14 5/8 12 3/4 --
</TABLE>
On April 25, 1997, the last full trading day prior to Parent's announcement
(which occurred on April 25, 1997 after the close of trading on the Nasdaq NM)
of its proposal to acquire the Company for $19 per Common Share in cash, the
last reported sales price of the Common Shares on the Nasdaq NM was $13 5/8.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE COMMON
SHARES.
Upon the occurrence of the Distribution Date, the Rights are to detach, and
may trade separately, from the Common Shares. See Section 8. If the
Distribution Date occurs and the Rights begin to trade separately from the
Common Shares, shareholders should also obtain current market quotations for
the Rights.
16
<PAGE>
SECTION 7. EFFECT OF THE OFFER ON THE MARKET FOR THE COMMON SHARES; NASDAQ
QUOTATION AND EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS
Market for the Common Shares. The purchase of Common Shares pursuant to the
Offer will reduce the number of holders of Common Shares and the number of
Common Shares that might otherwise trade publicly and could adversely affect
the liquidity and market value of the remaining Common Shares held by the
public. According to the Company 10-K, as of February 18, 1997, there were
approximately 2,204 record holders of Common Shares.
NASDAQ Quotation. Depending upon the number of Common Shares purchased
pursuant to the Offer, the Common Shares may no longer meet the designation
criteria for continued inclusion in NASDAQ. According to NASDAQ's published
marketplace rules, the Common Shares will not be eligible for continued
inclusion in the Nasdaq NM if, among other things, the number of publicly held
Common Shares falls below 500,000, the number of holders of Common Shares
falls below 400, or the aggregate market value of such publicly held Common
Shares falls below $3,000,000. If any of these criteria are not met, and the
Common Shares are no longer eligible for listing in the Nasdaq NM, quotations
might continue to be published in The Nasdaq SmallCap Market, but if the
number of holders of the Common Shares falls below 300, if the number of
publicly held Common Shares falls below 100,000, if the aggregate market value
of such publicly held Common Shares falls below $200,000 or if there are not
at least two registered and active market makers (one of which may be a market
maker entering a stabilizing bid), NASDAQ marketplace rules provide that the
securities would no longer qualify for inclusion in NASDAQ and NASDAQ would
cease to provide any quotations. Common Shares held directly or indirectly by
an officer or director of the Company or by a beneficial owner of more than
10% of the Common Shares will ordinarily not be considered as being publicly
held for purposes of these standards. In the event the Common Shares are no
longer eligible for inclusion in NASDAQ, quotations might still be available
from other sources. The extent of the public market for the Common Shares and
the availability of such quotations would, however, depend upon the number of
holders of such Common Shares remaining at such time, the interest in
maintaining a market in such Common Shares on the part of securities firms,
the possible termination of registration of such Common Shares under the
Exchange Act as described below and other factors.
Exchange Act Registration. The Common Shares are currently registered under
the Exchange Act. Registration of the Common Shares under the Exchange Act may
be terminated upon application of the Company to the Commission if the Common
Shares are not listed on a national securities exchange and there are fewer
than 300 holders of record. Termination of registration of the Common Shares
under the Exchange Act would substantially reduce the information required to
be furnished by the Company to its shareholders and to the Commission and
would make certain provisions of the Exchange Act no longer applicable to the
Company, such as the short-swing profit recovery provisions of Section 16(b)
of the Exchange Act, the requirement of furnishing a proxy statement pursuant
to Section 14(a) of the Exchange Act in connection with shareholders' meetings
and the related requirement of furnishing an annual report to shareholders,
and the requirements of Rule 13e-3 under the Exchange Act with respect to
"going private" transactions. Furthermore, the ability of "affiliates" of the
Company and persons holding "restricted securities" of the Company to dispose
of such securities pursuant to Rule 144 or Rule 144A promulgated under the
Securities Act of 1933, as amended, may be impaired or eliminated. The
Purchaser intends to seek to cause the Company to apply for termination of
registration of the Common Shares under the Exchange Act as soon after the
completion of the Offer as the requirements for such termination are met.
Based on publicly available information, the Rights are registered under the
Exchange Act. If the Distribution Date occurs and the Rights separate from the
Common Shares, the foregoing discussion with respect to the effect of the
Offer on any such Exchange Act registration would apply to the Rights in a
similar manner.
If registration of the Common Shares is not terminated prior to the Proposed
Merger, it is nevertheless intended that the Common Shares will no longer be
included in NASDAQ and the registration of the
17
<PAGE>
Common Shares and the Rights under the Exchange Act will be terminated
following the consummation of the Proposed Merger.
Margin Regulations. The Common Shares are currently "margin securities"
under the regulations of the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Common Shares.
Depending upon factors similar to those described above regarding listing,
public trading and market quotations, it is possible that, following the
purchase of Common Shares pursuant to the Offer, the Common Shares would no
longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers for the purpose of buying, carrying or
trading in securities.
SECTION 8. CERTAIN INFORMATION CONCERNING THE COMPANY
General. The Company is a Wisconsin corporation with its principal offices
at 142 Doty Street, Fond du Lac, Wisconsin 54935. The following description of
the Company's business has been taken from the Company 10-K:
Giddings & Lewis, Inc. (the "Company") is a leading global designer and
producer of highly-engineered, high-precision, industrial automation
systems, including automated machine tools, smart manufacturing systems,
flexible transfer lines, assembly automation systems, measuring systems,
industrial controls, and related products and services. The Company's
products are supplied primarily to the automotive, construction, aerospace,
defense, appliance, energy and electronics industries and are manufactured
at the Company's thirteen facilities located in the United States, Canada,
England and Germany.
Selected Consolidated Financial Data. The selected consolidated financial
information of the Company and its subsidiaries set forth below was excerpted
and derived from the Company 10-K, which included audited consolidated balance
sheets as of December 31, 1996 and 1995, and audited related consolidated
statements of operations, changes in shareholders' equity and cash flows for
each of the three years in the period ended December 31, 1996, filed by the
Company with the Commission. More comprehensive financial information is
included in such report (including management's discussion and analysis of
results of operations and financial position) and in other documents filed by
the Company with the Commission. The following summary financial information
is qualified in its entirety by reference to such documents and all other
reports and documents filed with the Commission and all of the financial
statements and related notes contained therein. Such reports and certain other
reports may be examined and copies may be obtained at the offices of the
Commission in the manner set forth below under "Available Information".
18
<PAGE>
GIDDINGS & LEWIS, INC.
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
DECEMBER 31,
---------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales.......................................... $762,993 $730,552 $619,471
Operating income................................... (24,315) 38,174 75,826
Net income (loss).................................. (12,542) 6,455 47,880
Net income (loss) per Common Share................. $ (0.37) $ 0.19 $ 1.40
Average number of Common Shares outstanding........ 34,025 34,398 34,284
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31,
-----------------
1996 1995
-------- --------
<S> <C> <C>
BALANCE SHEET DATA:
Total current assets........................................ $474,611 477,787
Total assets................................................ 811,400 $817,591
Total current liabilities................................... 213,305 182,327
Long-term debt.............................................. 100,000 100,000
Total shareholders' equity.................................. 460,823 492,541
</TABLE>
On April 17, 1997 the Company issued its earnings release for the first
quarter of 1997. According to the release as reported on the PR Newswire, the
Company's sales for the first quarter of 1997 were $147.6 million compared
with $192.4 million for the first quarter of 1996. Net income for the quarter
was $7.4 million, or 22 cents per share, compared with $10.4 million, or 30
cents per share, in the first quarter of 1996. The Company reported a gross
margin of 26.9% of sales compared with 22.2% for the first quarter of 1996.
The Rights. Set forth below is a summary description of the publicly
available information concerning the Rights.
According to the Company 8-A, the Board of Directors of the Company declared
a dividend on August 23, 1995 of one Right for each outstanding Common Share.
The dividend was payable on September 8, 1995 to the shareholders of record on
that date (the "Record Date"). Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of Class A Preferred
Stock, Series B, $.10 par value (the "Preferred Shares"), of the Company at a
price of $60 per one one-hundredth of a Preferred Share, subject to adjustment
(the "Purchase Price"). The description and terms of the Rights are set forth
in the Rights Agreement between the Company and the Rights Agent, which was
included as an exhibit to the Company 8-A. The following information
concerning the Rights and the Rights Agreement is taken from or is based upon
information presented in the Company 8-A.
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (other than the
Company, a subsidiary of the Company or an employee benefit plan of the
Company or a subsidiary) (an "Acquiring Person") has acquired beneficial
ownership of 20% or more of the outstanding Common Shares (the "Shares
Acquisition Date") or (ii) 10 business days (or such later date as may be
determined by action of the Company's Board of Directors prior to such time as
any person becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group (other than the Company, a subsidiary of the Company or an employee
benefit plan of the Company or a subsidiary) of 20% or more of such
outstanding Common Shares (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date, by such Common
Share certificate with a copy of the Summary of Rights to Purchase Preferred
Shares, in the form attached to the Rights Agreement.
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<PAGE>
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares, outstanding as
of the Record Date, will also constitute the transfer of the Rights associated
with the Common Shares represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") are to be mailed to holders of record of Common Shares
as of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on September 8, 2005 (the "Final Expiration Date"), unless the Rights
are earlier redeemed or exchanged by the Company, in each case as described
below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion
price, less than the then current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular quarterly cash dividends or
dividends payable in Preferred Shares) or of subscription rights or warrants
(other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon the exercise of Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to
a minimum preferential liquidation payment of $100 per share but will be
entitled to an aggregate payment of 100 times the payment made per Common
Share. Each Preferred Share will have 100 votes, voting together with the
Common Shares. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 100 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.
In the event that (i) any person becomes an Acquiring Person, (ii) the
Company is the surviving corporation in a merger with an Acquiring Person and
the Common Shares are not changed or exchanged, (iii) an Acquiring Person
engages in one of a number of types of transactions specified in the Rights
Agreement, or (iv) during such time as there is an Acquiring Person, an event
occurs which results in such Acquiring Person's ownership interest being
increased by more than 1% (the events described in clauses (i)-(iv) are herein
referred to as "Flip-In Events"), each holder of a Right will thereafter have
the right to receive upon exercise that number of Common Shares (or, in
certain circumstances cash, property or other securities of the Company or a
reduction in the Purchase Price) having a market value (calculated as provided
under the Rights Agreement) of two times the then current Purchase Price.
Notwithstanding any of the foregoing, following the occurrence of any Flip-In
Event all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, or subsequently become beneficially owned by an
Acquiring Person, related persons and transferees will be null and void.
In the event that, at any time following the Shares Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction
or (ii) 50% or more of its consolidated assets or earning power are sold (the
events described in clauses (i) and (ii) are herein referred to as "Flip-Over
Events"), proper provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price, that number of shares of common stock of the acquiring
company which at the
20
<PAGE>
time of such transaction will have a market value (calculated as provided
under the Rights Agreement) of two times the then current Purchase Price.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts). In lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
The Purchase Price is payable by certified check, cashier's check, bank
draft or money order or, if so provided by the Company, the Purchase Price
following the occurrence of a Flip-In Event and until the first occurrence of
a Flip-Over Event may be paid in Common Shares having an equivalent value.
At any time after a person becomes an Acquiring Person and prior to the
acquisition by any Acquiring Person of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights owned by any Acquiring Person which have become void), in whole or
in part, at an exchange ratio of one Common Share, or one one-hundredth of a
Preferred Share (or of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges), per Right
(subject to adjustment).
At any time prior to a person becoming an Acquiring Person, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price"). The redemption of the Rights
may be made effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
Other than provisions relating to principal economic terms of the Rights,
the terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an
amendment to lower the threshold for exercisability of the Rights from 20% to
not less than 10%, with certain exceptions for any person then beneficially
owning a percentage of the number of Common Shares then outstanding equal to
or in excess of the new threshold, except that from and after the Distribution
Date no such amendment may adversely affect the interests of the holders of
the Rights.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a shareholder of the Company, including, without limitation, the right to
vote or to receive dividends.
The Company 8-A states that while distribution of the Rights will not
constitute a taxable event to the shareholders or the Company, the
shareholders may, depending on the circumstances, recognize taxable income in
the event that the Rights become exercisable for Preferred Shares (or other
consideration) of the Company or for common stock of the acquiring company, as
set forth above.
The Purchaser believes that, as a result of the Purchaser's announcement on
April 25, 1997 of its intention to commence the Offer, the Distribution Date
may occur as early as May 9, 1997, unless prior to such date the Company's
Board of Directors defers the Distribution Date, redeems the Rights or amends
the Rights Agreement to render the Rights inapplicable to the Offer and the
Proposed Merger.
The foregoing summary of the Rights Agreement does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement. The Rights Agreement should be available for inspection and copies
thereof should be obtainable in the manner set forth below under "Available
Information".
PURSUANT TO THE RIGHTS CONDITION, THE OFFER IS CONDITIONED UPON THE RIGHTS
HAVING BEEN REDEEMED BY THE COMPANY'S BOARD OF DIRECTORS OR THE PURCHASER
BEING SATISFIED, IN ITS REASONABLE JUDGMENT, THAT THE RIGHTS HAVE BEEN
INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED
MERGER.
21
<PAGE>
Unless the Rights Condition is satisfied, shareholders will be required to
tender one Right for each Common Share tendered in order to effect a valid
tender of Common Shares in accordance with the procedures set forth in Section
2. Unless the Distribution Date occurs, a tender of Common Shares will also
constitute a tender of the associated Rights.
Parent and the Purchaser are requesting that the Company's Board of
Directors redeem the Rights. Redemption of the Rights (or an amendment of the
Rights Agreement which the Purchaser is satisfied, in its reasonable judgment,
renders the Rights inapplicable to the Offer and the Proposed Merger) would
satisfy the Rights Condition. There can be no assurance that the Company's
Board of Directors will take such action. In the event that the Company's
Board of Directors fails to do so prior to the intended date of the
consummation of the Offer, the Purchaser expects its nominees to the Company's
Board of Directors, if elected at the Special Meeting, and subject to their
fiduciary duties, to take such appropriate action as shall result in the
satisfaction of the Rights Condition. Parent and the Purchaser have commenced
litigation against the Company and certain of its directors seeking, among
other things, that the Rights be redeemed. See Section 15.
Available Information. The Company is subject to the information and
reporting requirements of the Exchange Act and, in accordance therewith, is
required to file periodic reports, proxy statements and other information with
the Commission relating to its business, financial condition and other
matters. Certain information as of particular dates concerning the Company's
directors and officers (including their remuneration and stock options granted
to them), Common Shares held by them, the principal holders of the Company's
securities and any material interest of such persons in transactions with the
Company and certain other matters is required to be disclosed in proxy
statements and annual reports distributed to the Company's shareholders and
filed with the Commission. Such reports, proxy statements and other
information are available for inspection and copying at the public reference
facilities of the Commission located at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
at Seven World Trade Center, 13th Floor, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The
Commission also maintains an Internet site on the World Wide Web at
<http://www.sec.gov> that contains reports, proxy statements and other
information. The information also should be available at The Nasdaq Stock
Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
Company Information. The information concerning the Company contained in
this Offer to Purchase has been taken from or based upon publicly available
documents on file with the Commission and other publicly available
information. Although Parent and the Purchaser do not have any knowledge that
any such information is untrue, neither the Purchaser nor Parent takes any
responsibility for the accuracy or completeness of such information 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.
SECTION 9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER
Parent and the Purchaser. Parent, whose principal offices are located in St.
Francis, Wisconsin, is a Delaware corporation and is a holding company for
subsidiaries involved in the worldwide manufacture and distribution of surface
mining equipment; underground mining equipment; pulp and papermaking
machinery; and material handling equipment. In early fiscal 1996, Parent
completed the acquisition of Dobson Park Industries plc ("Dobson"), an
industrial engineering group with interests in underground mining equipment,
industrial electronic control systems, toys and plastics. Dobson's principal
subsidiary, Longwall International, is engaged in the manufacture, sale and
service of mining equipment for the international underground coal mining
industry and has been integrated into Parent's Mining Equipment Segment. In
March 1996, Parent completed the purchase of the assets of the pulp machinery
division of Ingersoll-Rand Company.
Parent is the direct successor to a business begun over 100 years ago in
Wisconsin which, through its subsidiaries, manufactures and markets products
classified into three industry segments: Mining Equipment, Pulp and
Papermaking Machinery, and Material Handling.
22
<PAGE>
The Purchaser is a newly incorporated Delaware corporation and a wholly
owned subsidiary of Parent which to date has not conducted any business other
than in connection with the Offer and the Proposed Merger.
The principal executive offices of Parent and the Purchaser are located at
3600 South Lake Drive, St. Francis, Wisconsin 53235. Parent owns all of the
outstanding shares of the Purchaser. Of the 789,600 Common Shares owned
beneficially by Parent and the Purchaser, 789,600 (approximately 2.4% of the
number of Common Shares outstanding, on a primary share basis, as of March 10,
1997, according to the Company 10-K) are beneficially owned by Parent (1,000
of which (less than .1% of the number of Common Shares outstanding, on a
primary share basis, as of March 10, 1997, according to the Company 10-K) are
beneficially owned and held of record by the Purchaser).
Selected Consolidated Financial Information. Set forth below is a summary of
certain consolidated financial information with respect to Parent and its
subsidiaries excerpted or derived from the information contained in Parent's
Annual Report on Form 10-K for the year ended October 31, 1996 (the "Parent
10-K") and Parent's Quarterly Report on Form 10-Q for the quarter ended
January 31, 1997 (the "Parent 10-Q"). More comprehensive financial information
is included in the complete financial statements of Parent contained in the
Parent 10-K and the Parent 10-Q on file with the Commission, and such
financial statements are incorporated herein by reference.
HARNISCHFEGER INDUSTRIES, INC.
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
JANUARY 31, FISCAL YEAR ENDED OCTOBER 31,
----------------- --------------------------------
1997 1996 1996 1995 1994
-------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
INCOME STATEMENT DATA:
Net Sales................. $699,411 $632,684 $2,863,931 $2,152,079 $1,551,728
Operating Income.......... 67,500 53,178 244,019 181,365 100,162
Net Income (Loss)......... 30,858 23,191 114,217 57,404 (53,912)
Earnings (Loss) Per Share:
Net Income (Loss) Per
Share................... $ 0.65 $ 0.50 $ 2.42 $ 1.24 $ (1.23)
Average Shares Outstand-
ing...................... 47,720 46,795 47,196 46,218 43,716
</TABLE>
<TABLE>
<CAPTION>
AT JANUARY 31, AT OCTOBER 31,
-------------- ---------------------
1997 1996 1995
-------------- ---------- ----------
<S> <C> <C> <C>
(UNAUDITED)
BALANCE SHEET DATA:
Current Assets............................ $ 1,423,226 $1,410,250 $1,213,390
Total Assets.............................. 2,694,035 2,690,029 2,040,767
Current Liabilities....................... 1,040,720 1,077,127 723,303
Long-term Obligations..................... 658,223 657,765 459,110
Shareholders' Equity...................... 718,719 673,485 559,276
</TABLE>
On February 25, 1997, Parent issued $150,000,000 of 6 7/8% Debentures due
February 15, 2027 in a public offering. Additional information concerning such
debentures and such offering is contained in Parent's public filings with the
Commission.
Available Information. Parent is subject to the informational requirements
of the Exchange Act and, in accordance therewith, is required to file periodic
reports, proxy statements and other information with the Commission relating
to its business, financial condition and other matters. Certain information as
of particular dates concerning Parent's directors and officers (including
their remuneration and stock options granted to them), Parent's securities
held by them, if any, the principal holders of Parent's securities and any
material interest of
23
<PAGE>
such persons in transactions with Parent and certain other matters is required
to be disclosed in proxy statements and annual reports distributed to Parent's
shareholders and filed with the Commission. Such reports, proxy statements and
other information are available for inspection and copying at the Commission
in the same manner as is set forth with respect to the Company in Section 8.
In addition, such material should also be available for inspection at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005, and the Pacific Stock Exchange, Inc., 233 South Beaudry Avenue,
Los Angeles, California 90012 and 301 Pine Street, San Francisco, California
94104, on which stock exchanges Parent's shares are traded.
SECTION 10. SOURCE AND AMOUNT OF FUNDS
The maximum amount of funds required by the Purchaser to purchase all of the
Common Shares pursuant to the Offer (assuming the exercise of all outstanding
options having an exercise price less than the Offer Price) and to pay fees
and expenses related to the Offer and the Proposed Merger is approximately
$650 million (net of approximately $13 million in proceeds from the exercise
of options). The Purchaser plans to obtain all funds needed for the Offer and
the Proposed Merger through a capital contribution from Parent.
Parent plans to obtain funds for such capital contribution from available
cash on hand and from borrowings under new credit facilities to be provided by
The Chase Manhattan Bank and arranged by Chase Securities Inc. (together,
"Chase") pursuant to a Commitment Letter dated April 21, 1997, between Chase
and Parent (the "Commitment Letter"). Pursuant to the Commitment Letter, Chase
will provide a $500 million 364-day revolving credit facility (the "364-Day
Facility") and a $500 million five-year revolving credit facility (the "Five-
Year Facility," and together with the 364-Day Facility, the "New Facilities")
which Parent will be permitted to draw upon to finance the acquisition of
Common Shares in the Offer and certain related costs and expenses, and to
refinance certain indebtedness of Parent and its subsidiaries and of the
Company and its subsidiaries and for working capital and general corporate
purposes. Although Chase has committed, subject to the terms and conditions of
the Commitment Letter, to provide the entire financing contemplated by the
Commitment Letter, Chase has advised Parent that it intends to syndicate each
of the New Facilities. Up to $240 million will be available under the New
Facilities prior to the Purchaser's acceptance for payment of Common Shares in
the Offer, and on and after such date the remaining $760 million will become
available on the terms contemplated by the Commitment Letter. The 364-Day
Facility will be due and payable 364 days after execution of the relevant
credit agreement, subject to renewal for additional 364 day periods upon the
agreement of Parent and the lenders thereunder. The Five-Year Facility will be
due and payable five years after execution of the relevant credit agreement.
The Commitment Letter provides that borrowings under the New Facilities will
bear interest at one of the following rates, as selected by Parent from time
to time: (i) the Alternate Base Rate (as defined in the Commitment Letter) or
(ii) the LIBOR rate (as defined in the Commitment Letter), in either case plus
an interest rate spread ranging as follows: (a) in the case of the 364-Day
Facility, from .19% to .375%, and (b) in the case of the Five-Year Facility,
from .17% to .35%, based, in either case, upon Parent's credit rating as
reported by Standard & Poor's Corporation and Moody's Investors Service, Inc.
and on Parent's ratio of funded debt to total capital. In addition, Parent is
obligated to pay facility fees on committed funds (whether drawn or undrawn)
as follows: (a) in the case of the 364-Day Facility, a fee ranging from .06%
to .175% and (b) in the case of the Five-Year Facility, a fee ranging from
.08% to .20%, in each case based on Parent's credit rating as reported by
Standard & Poor's Corporation and Moody's Investors Service, Inc. A separate
fee letter provides for Parent to pay various additional fees, including an
acceptance and closing fee, an administrative agent's fee, and an additional
fee during the period between the signing of the Commitment Letter and the
completion of definitive documentation relating to the New Facilities. Chase's
obligation to fund and/or syndicate the New Facilities is subject to certain
terms and conditions set forth in the Commitment Letter or to be set forth in
definitive documentation relating to the New Facilities, including the absence
of any material adverse change in the condition of Parent, the Company and
their respective subsidiaries.
The foregoing summary of the Commitment Letter is qualified in its entirety
by reference to Exhibit (b)(1) to the Schedule 14D-1 filed by Parent and the
Purchaser with the Commission on the date hereof (the "Schedule 14D-1"), which
is incorporated herein by reference.
24
<PAGE>
Although no definitive plan or arrangement for repayment of borrowings under
the New Facilities has been made, Parent anticipates such borrowings will be
repaid with internally generated funds (including, if the Proposed Merger is
accomplished, those of the Company) and from other sources which may include
the proceeds of future bank refinancings or the public or private sale of debt
or equity securities. Following consummation of the Offer and the Proposed
Merger, Parent will, over time, consider actions to reduce its debt to total
capitalization ratio to its traditional level, including sales of equity,
issuances of equity in connection with acquisitions, or sales of assets. No
decision has been made concerning the method Parent will use to repay the
borrowings under the New Facilities. Such decision will be made based on
Parent's review from time to time of the advisability of particular actions,
as well as prevailing interest rates, financial and other economic conditions
and such other factors as Parent may deem appropriate.
SECTION 11. BACKGROUND OF THE OFFER
Parent continuously seeks to strengthen its business segments by adding new
products and businesses that enhance its overall operations, including through
acquisitions. Beginning in late 1996, Parent, with the assistance of a team of
management consultants, commenced a strategic analysis to identify
opportunities to enhance the growth prospects of its core lines of business.
As a result of this study, and based on public information and with the
assistance of Lehman Brothers, its financial advisor, and the management
consultants, Parent began analyzing the potential attractiveness of a possible
acquisition of the Company. Parent views the Company as having significant
strengths--a manufacturer of highly engineered, custom-designed machine tools
and industrial automation products with strong positions in general
manufacturing markets ranging from small job shops to the world's largest
automakers, and with a long-standing reputation for customer service and
aftermarket support. With access to Parent's strategic, operational and
financial resources, the combination of the Company and Parent's existing
complementary material handling business would make an excellent platform from
which to implement Parent's Industrial Products & Services ("IP&S") strategy.
That strategy--formally endorsed by Parent's Board of Directors--is to
leverage Parent's proven skills in "life-cycle management," which Parent
developed in connection with helping its customers in the mining and
papermaking industries improve their operating efficiency, capacity
utilization rates and profitability, by applying those skills to the
industrial workplace generally.
Prior to commencing the Offer, Parent acquired Common Shares on the open
market at prices ranging from $13 5/8 to $14 1/2 per Common Share, 1,000 of
which Parent subsequently contributed to the Purchaser.
Based on the foregoing, Parent determined to contact the Company to assess
its receptiveness to a potential combination of the Company and Parent.
On April 21, 1997, Jeffery T. Grade, Chairman and Chief Executive Officer of
Parent, and John N. Hanson, President and Chief Operating Officer of Parent,
arranged an afternoon meeting with Marvin L. Isles, Chief Executive Officer
and a director of the Company. Prior to meeting with Mr. Isles, Messrs. Grade
and Hanson and Francis M. Corby, Jr., Executive Vice President for Finance and
Administration and Chief Financial Officer of Parent, met with John A. Becker,
a director of the Company and President and Chief Operating Officer of Firstar
Corporation, which has banking relationships with Parent, and informed Mr.
Becker that Mr. Grade intended to present Mr. Isles with Parent's offer to
acquire the Company.
Later that afternoon Messrs. Grade and Hanson met with Mr. Isles and Douglas
E. Barnett, Vice President and Controller of the Company, at the Company's
offices. During this meeting, Mr. Grade explained Parent's new IP&S strategy
and the reasons Parent had come to believe that the Company would make an
excellent platform from which to implement the IP&S strategy. Mr. Isles
indicated that he believed the IP&S strategy is a sensible strategy and one
that would be appropriate for the Company. Mr. Grade then delivered to Mr.
Isles a letter (reprinted below) in which Parent proposed to acquire the
Company at a price of $19 per Common Share (the "Proposal"). In connection
with the Proposal, Mr. Grade emphasized that Parent's intention is to grow and
expand the Company's businesses and that the acquisition would create
opportunities for the Company's employees and for the Wisconsin communities
that both Parent and the Company serve. Mr. Grade emphasized
25
<PAGE>
that Parent was prepared to move quickly to enter into agreements providing
for the acquisition of the Company by Parent and requested that the Company
respond promptly to the Proposal. The representatives of Parent responded to
questions from Mr. Isles and Mr. Barnett. Mr. Isles stated that he would
respond to the proposal by the end of the day on Wednesday, April 23.
The text of the letter delivered by Mr. Grade to Mr. Isles on April 21, 1997
is as follows:
April 21, 1997
Mr. Marvin L. Isles
Giddings & Lewis, Inc.
President and Chief Executive Officer
142 Doty Street
Fond du Lac, WI 54936-0590
Dear Marv:
Harnischfeger Board of Directors has authorized me to propose to you the
combination of our two companies in a transaction that would provide
Giddings & Lewis shareholders with $19 per share in cash for all of their
shares--approximately a 40% premium to Friday's closing price.
Harnischfeger views Giddings & Lewis as a company with significant
strengths--manufacturer of highly engineered, custom-designed machine
tools and industrial automation products with strong positions in general
manufacturing markets ranging from small job shops to the world's largest
automakers, and with a long-standing reputation for customer service and
aftermarket support. With access to Harnischfeger's strategic, operational
and financial resources, the combination of Giddings & Lewis and our
existing material handling business will make an excellent platform from
which to implement Harnischfeger's Industrial Products & Services (IP&S)
strategy. That strategy--formally endorsed by Harnischfeger's Board of
Directors--is to leverage Harnischfeger's proven skills in "life-cycle
management", which have helped our customers in the mining and papermaking
industries improve their operating efficiency, capacity utilization rates
and profitability, by applying those skills to the industrial workplace
generally.
We believe that by combining Giddings & Lewis with Harnischfeger and
integrating Giddings & Lewis into our IP&S strategy, we will create the
growth platform that enables us to pay the substantial premium we are
proposing. We are a shareholder of Giddings & Lewis and we believe that
Giddings & Lewis cannot, on its own, achieve the value we are offering. We
believe that Giddings & Lewis shareholders will be highly receptive to a
cash transaction that offers them immediate cash realization of a premium
price for their shares.
Harnischfeger, like Giddings & Lewis, is based in Wisconsin. Consistent
with our deep and long-standing commitment to our state and region,
Harnischfeger believes the proposed transaction will provide significant
employment and growth opportunities for Giddings & Lewis over time.
Harnischfeger is also the ideal partner for Giddings & Lewis because the
combination of the two companies will unite Giddings & Lewis with a
company that has consistently demonstrated its ability to successfully
integrate strategic acquisitions, manage product transitions, meet the
evolving needs of its customers, grow its business, and build value for
its shareholders, customers, business partners, employees and communities.
Indeed, once written off as a "Rust Belt" company that could not possibly
measure up against its international competitors, Harnischfeger today is a
global leader whose dramatic growth and operational and financial success
vividly demonstrate the competitiveness, skill and determination of
American industry.
We want to work with you and your Board towards the prompt consummation of
a negotiated transaction. We are available to address any questions or
issues your Board may have, and we are prepared to move
26
<PAGE>
quickly. We see no reason why a definitive agreement could not be reached
within days. We have arranged all the necessary financing. A transaction
with Harnischfeger would not be subject to financing or to any other
significant contingencies.
Because we firmly believe this combination will be in the best interests
of both Harnischfeger's and Giddings & Lewis' shareholders and their
respective other constituencies, we are firmly committed to making it a
reality. In light of the highly complementary strategic fit between our
two companies, and our belief that Giddings & Lewis shareholders would
strongly favor the transaction we propose, we hope you will recognize and
acknowledge the strategic, operational and financial merits of the
transaction and agree to enter into serious discussions leading to a
definitive merger agreement. Delay will not be in anyone's interest. I
urge you to respond to me promptly so we can commence negotiations.
I look forward to hearing from you.
Sincerely,
Jeffery T. Grade
On Tuesday, April 22, Mr. Grade called Mr. Isles to discuss the Proposal and
to respond to any questions Mr. Isles might have. In particular, Mr. Grade
informed Mr. Isles that while Parent would prefer a cash transaction, Parent
would be prepared to consider a transaction in which part of the consideration
would be in Parent stock, if Mr. Isles believed such consideration would be
preferred by the Company's Board of Directors. Mr. Grade also reiterated
Parent's commitment to executing definitive documentation for a business
combination between Parent and the Company by the end of the week and that
Parent and its officers remained available at all times to answer any
questions the Company's Board of Directors might have or to negotiate
definitive documentation. Mr. Isles stated that he was working to arrange a
meeting of the Company's Board of Directors and would call Mr. Grade, as
promised, the next day.
On Wednesday, April 23, 1997, Mr. Isles called Mr. Grade to inform him that
the Company would be prepared to respond to the Proposal on Friday, April 25.
During the April 23 call, Messrs. Grade and Isles briefly discussed various
strategic, operational and personnel and employment issues relating to a
potential combination of the Company with Parent, and Mr. Grade answered a
number of questions posed by Mr. Isles relating to such matters. At the end of
the conversation, Mr. Isles agreed to call Mr. Grade with the Company's
response at approximately 2:00 p.m., local time, on Friday, April 25.
On Friday, April 25, 1997, Mr. Isles called Mr. Grade at the appointed time.
Mr. Isles informed Mr. Grade that the Company's Board of Directors was
unwilling to enter into discussions with Parent on the basis proposed. Mr.
Isles stated that the Company would not enter into negotiations with Parent
unless Parent agreed to be bound by a two-year standstill agreement. Mr. Grade
informed Mr. Isles that he would reflect on these matters and would respond to
him. Later that afternoon Mr. Grade sent Mr. Isles a letter indicating that
Parent interpreted the Company's response as a rejection of Parent's good
faith proposal. The text of the letter was included in a press release, set
forth below, which was issued by Parent that afternoon announcing, among other
things, the Purchaser's intention to commence the Offer. That afternoon,
Parent and the Purchaser also commenced litigation against the Company and
certain of its directors. See Section 15.
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The text of the press release issued by Parent and the Purchaser on April
25, 1997, including the text of the letter delivered by Mr. Grade to Mr. Isles
that day, is as follows:
HARNISCHFEGER ANNOUNCES $19 PER SHARE CASH TENDER OFFER
FOR ALL SHARES OF GIDDINGS & LEWIS, INC. IN A
TRANSACTION VALUED AT $747 MILLION
MILWAUKEE, April 25, 1997--Harnischfeger Industries, Inc. (NYSE: HPH)
announced today that it will commence an all-cash tender offer for all
shares of Giddings & Lewis, Inc. (Nasdaq: GIDL) at a price of $19 per
share. The offer was communicated today in a letter from Jeffery T. Grade,
chairman and chief executive officer of Harnischfeger, to Marvin L. Isles,
president and chief executive officer of Giddings & Lewis ("G & L").
The Harnischfeger offer has a total transaction value of approximately
$747 million, based on the approximately 33.2 million shares of G & L
stock currently outstanding and the assumption of G & L debt, and
represents a premium of approximately 40% over today's G & L closing price
of $13.625 per share. The transaction would create an enterprise with
combined 1996 revenues of $3.6 billion with leadership positions in mining
equipment, pulp and papermaking machinery, and industrial products and
services ("IP&S"). The IP&S group will be comprised of Harnischfeger's
material handling business and G & L.
Following is the complete text of Mr. Grade's letter to Mr. Isles:
April 25, 1997
Mr. Marvin L. Isles
President and Chief Executive Officer
Giddings & Lewis, Inc.
P.O. Box 590
142 Doty Street
Fond du Lac, Wisconsin 54936-0590
Dear Marvin:
I appreciated the opportunity to discuss with you over the last week
Harnischfeger's vision of combining our two companies on a basis that
would maximize the value of Giddings & Lewis, Inc. for all G & L
shareholders and bring significant strategic, operational and
financial benefits to the shareholders, customers, suppliers, business
partners and employees of the combined enterprise.
As I indicated during our discussions, Harnischfeger views G & L as a
company with significant strengths--a manufacturer of highly
engineered, custom-designed machine tools and industrial automation
products with strong positions in general manufacturing markets
ranging from small job shops to the world's largest automakers, and
with a long-standing reputation for customer service and aftermarket
support.
We believe that as part of Harnischfeger, with access to our
strategic, operational and financial resources, the combination of G &
L and our existing complementary material handling business will make
an excellent platform from which to implement our Industrial Products
& Services (IP&S) strategy. As we discussed, that strategy--formally
endorsed by our Board of Directors--is to leverage Harnischfeger's
proven skills in "life-cycle management," which have helped our
customers in the mining and papermaking industries improve their
operating efficiency, capacity utilization rates and profitability, by
applying those skills to the industrial workplace generally.
In light of the strategic fit between our two companies, with which
you concurred, and of our belief that many G & L shareholders would
strongly favor the transaction we propose, we had hoped you
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would recognize and acknowledge the merits of that transaction and
agree to enter into immediate meaningful discussions leading to a
definitive merger agreement. Instead, we interpret your response as a
rejection of our good faith proposal.
Faced with that response, and having thoroughly evaluated the business
combination we are proposing based on public information, we have
decided that the best interests of the shareholders, customers,
suppliers, business partners and employees of both companies, and of
our communities and other constituencies, would be served by taking
our offer directly to your shareholders. Accordingly, Harnischfeger is
offering to acquire all Giddings & Lewis shares outstanding in a
transaction in which G & L shareholders would receive $19, in cash,
for each of their G & L shares.
In considering this offer, you should bear in mind the following:
. The $19 per share offer price represents a premium of approximately
40% over G & L's current market price. We are a shareholder of G &
L and we believe that G & L cannot, on its own, achieve the value
we are offering. We also believe G & L's shareholder base will be
highly receptive to a cash transaction that offers them immediate
cash realization of a premium price for their G & L shares.
. Harnischfeger, like G & L, is based in Wisconsin. Consistent with
our deep and long-standing commitment to our state and region,
Harnischfeger believes the proposed transaction will provide
significant employment and growth opportunities for G & L over
time.
. Harnischfeger is also the ideal partner for G & L because the
combination of the two companies will unite G & L with a company
that has consistently demonstrated its ability to successfully
integrate strategic acquisitions, manage product transitions, meet
the evolving needs of its customers, grow its business, and build
value for its shareholders, customers, suppliers, business
partners, employees and communities. Indeed, once written off as a
"Rust Belt" company that could not possibly measure up against its
international competitors, Harnischfeger today is a global leader
whose dramatic growth and operational and financial success vividly
demonstrate the competitiveness, skill and determination of
American industry.
We would still prefer to work with you and your board towards the
prompt consummation of a negotiated transaction. Our offer is not
subject to financing or any other significant contingencies other than
removal of your takeover defenses. In that regard, we are taking steps
to elect directors who will remove these impediments to our offer if
the incumbent board fails to do so. We are confident that G & L
shareholders will be supportive of these efforts.
We firmly believe that this combination will be in the best interests
of both Harnischfeger's and G & L's shareholders and their respective
other constituencies, and are committed to making this combination a
reality.
Sincerely,
Jeffery T. Grade
cc: Members of the Board of Directors of Giddings & Lewis, Inc.
# # #
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The foundation for the IP&S group is life-cycle management, a strategy
Harnischfeger is successfully implementing in the mining and papermaking
industries, and one that helps industrial customers improve their
operational and financial performance. Through an integrated approach that
recognizes the importance
of maintenance, service and support at every stage of complex industrial
processes, life-cycle management can significantly enhance asset
utilization, minimize work-in-process, and reduce production cost per unit
of output.
Lehman Brothers Inc. is acting as Dealer Manager for the tender offer and
financial advisor to Harnischfeger in connection with the transaction.
Harnischfeger Industries, Inc. is an international holding company with
business segments involved in the manufacture and distribution of
equipment for underground mining (Joy Mining Machinery), surface mining
(P&H Mining Equipment), pulp and papermaking (Beloit Corporation), and
material handling (P&H Material Handling).
# # #
On April 28, 1997, the Purchaser commenced the Offer by publication of a
summary advertisement pursuant to Rule 14d-2(a)(2) under the Exchange Act.
Also on April 28, Parent and the Purchaser initiated the process of soliciting
Written Demands to call the Special Meeting (see Section 12), and requested
the Company's shareholder list and security position listings and other
information pursuant to the federal securities laws and the WBCL. Copies of
the press releases issued by Parent and the Purchaser announcing the proposal
it made to the Company and announcing the commencement of the Offer are
attached as Exhibits (a)(8) and (a)(9) to the Schedule 14D-1, respectively,
and are incorporated herein by reference.
Contacts, etc. with the Company. Except as set forth in this Offer to
Purchase (including the Schedules attached hereto), none of the Purchaser,
Parent or, to the best knowledge of the Purchaser and Parent, any of the
persons listed in Schedule I hereto, or any associate or majority-owned
subsidiary of such persons, beneficially owns any equity security of the
Company, and none of the Purchaser, Parent, or to the best knowledge of the
Purchaser and Parent, any of the other persons referred to above, or any of
the respective directors, executive officers or subsidiaries of any of the
foregoing, has effected any transaction in any equity security of the Company
during the past 60 days.
From time to time, in the ordinary course of business, Parent makes
purchases from and sales to the Company of certain products, which
transactions are on terms and conditions customary for the industry and
negotiated at arm's length. Neither purchases by Parent from the Company nor
sales by Parent to the Company have exceeded $5 million in the aggregate in
any of Parent's or the Company's past three fiscal years.
Except as set forth in this Offer to Purchase, none of the Purchaser,
Parent, or, to the best knowledge of the Purchaser and Parent, any of the
persons listed in Schedule I hereto, has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, without limitation, any contract,
arrangement, understanding or relationship concerning the transfer or the
voting of any securities of the Company, 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, Parent or, to the best knowledge of the
Purchaser and Parent, any of the persons listed in Schedule I hereto has had
any transactions with the Company, or any of its executive officers, directors
or affiliates that would require reporting under the rules of the Commission.
Except as set forth in this Offer to Purchase, as of the date hereof, there
have been no contacts, negotiations or transactions between the Purchaser or
Parent, any of their respective subsidiaries, or, to the best knowledge of the
Purchaser and Parent, any of the persons listed in Schedule I hereto, on the
one hand, and the Company or
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its executive officers, directors or affiliates, on the other hand, concerning
a merger, consolidation or acquisition, tender offer or other acquisition of
securities, election of directors, or a sale or other transfer of a material
amount of assets that would require reporting under the rules of the
Commission.
SECTION 12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY
Purpose. The purpose of the Offer and the Proposed Merger is to enable
Parent to acquire control of, and the entire equity interest in, the Company.
Parent and the Purchaser have proposed that, following the consummation of the
Offer, the Purchaser would effect the Proposed Merger, pursuant to which each
then outstanding Common Share (excluding Common Shares owned by the Purchaser
or Parent, Common Shares held in the treasury of the Company and Common Shares
owned by shareholders who perfect their dissenters' rights under the WBCL, if
any), would be converted into the right to receive an amount in cash equal to
the price per Common Share paid pursuant to the Offer, and the Company would
become a wholly owned subsidiary of Parent. The Offer, as the first step in
the acquisition of the Company, is intended to facilitate the acquisition of
all outstanding Common Shares. The Proposed Merger, as the second step in the
acquisition of the Company, is intended to facilitate the acquisition of any
Common Shares not acquired by the Purchaser in the Offer. Although it is the
Purchaser's current intention to propose and seek to enter into a definitive
merger agreement with the Company with respect to the Proposed Merger and to
consummate the Proposed Merger as promptly as practicable, there can be no
assurance that the Proposed Merger will be consummated or, if consummated, of
the timing or terms thereof. Assuming satisfaction of the Business Combination
Condition, consummation of the Proposed Merger will require the adoption of a
resolution by the Company's Board of Directors approving the Proposed Merger
and the affirmative vote of the holders of a majority of the voting power of
the Common Shares entitled to vote upon such matter. Under certain
circumstances, if the Purchaser owns 90% or more of the outstanding Common
Shares, the Proposed Merger could be consummated without the approval of the
Company's shareholders through a Short-Form Merger (as defined herein);
however, at the present time, even if the Purchaser owns such percentage of
the Common Shares, the Purchaser does not intend to do so.
Parent intends to continue to seek to negotiate with the Company with
respect to the acquisition of the Company. If such negotiations result in a
definitive merger agreement between the Company and Parent, certain material
terms of the Offer may change and Parent would not proceed with any
solicitation with regard to the Special Meeting referred to below.
Accordingly, such negotiations could result in, among other things,
termination or amendment of the Offer and/or submission of a different
acquisition proposal to the Company's shareholders for their approval.
In order to increase the likelihood that the conditions to the Offer will be
satisfied and that the Company and the Purchaser enter into the Proposed
Merger, on April 28, 1997 Parent and the Purchaser took steps to commence a
solicitation of Written Demands to call the Special Meeting at which, among
other things, Parent and the Purchaser will propose that the holders of Common
Shares (i) remove all of the incumbent directors of the Company, (ii) repeal
each provision of the Bylaws or amendments thereto (other than the amendment
referred to in (iii) below) adopted subsequent to March 28, 1997, or adopted
on or prior to that date but not filed by the Company as an exhibit to any
Current Report on Form 8-K, Quarterly Report on Form 10-Q or Annual Report on
Form 10-K of the Company on or prior to March 28, 1997, (iii) amend the Bylaws
to reduce the authorized number of directors of the Company to three, and (iv)
elect three nominees of the Purchaser and Parent as directors of the Company
to fill the vacancies created thereby. Pursuant to the Articles of
Incorporation, removal of the incumbent directors and amendment of the Bylaws
to reduce the number of directors to three at the Special Meeting will be
required to be approved by the affirmative vote of shareholders holding at
least 66 2/3% of the voting power of the then outstanding shares of all
classes of capital stock of the Company generally possessing voting rights in
the election of directors, voting together as a single class. Pursuant to the
Bylaws, the Repeal Proposal (referred to in (ii) above) will be approved if
the number of votes cast in favor of such proposal exceeds the number of votes
cast in opposition to such proposal; provided that, pursuant to the Articles
of Incorporation, to the extent this amendment affects Section 3.01 of the
Bylaws (relating to the powers, number and tenure of directors) or Article IX
of the Bylaws (relating to the indemnification of officers and directors), the
affirmative
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vote of holders of at least 66 2/3% of the voting power of the then
outstanding shares of all classes of capital stock of the Company generally
possessing voting rights in the election of directors, voting together as a
single class, shall be required. Pursuant to the WBCL and the Bylaws, the
directors will each be elected by a plurality of the votes cast at the Special
Meeting, assuming a quorum (a majority of the votes entitled to be cast on
such matter) is present. The nominees of Parent are committed, subject to
their fiduciary duties, to giving all of the Company's shareholders the
opportunity to accept the Offer and receive $19 for each of their Common
Shares.
Under the WBCL and the Bylaws, a special meeting of the Company's
shareholders is required to be held upon the written demand of the Requisite
Holders. Under the Bylaws, the Company's Board of Directors may fix a Demand
Record Date. On April 28, 1997, the Purchaser (as the holder of record of
1,000 Common Shares) delivered to the Secretary of the Company a written
request, in accordance with the Bylaws, that the Company Board fix a Demand
Record Date. The Bylaws also provide that shareholders executing written
demands, under certain circumstances, must agree to reimburse the Company for
certain costs in connection with the Special Meeting. Parent and the Purchaser
have agreed to bear those costs and reimburse reasonable expenses incurred in
connection therewith.
The Special Meeting has not been called, and no date, time, place or record
date for the Special Meeting has been set. Once Parent has received Written
Demands from the Requisite Holders and timely delivers them to the Company,
the Company is required under the Bylaws to call and hold the Special Meeting
within 100 days. Shareholders will be notified of the date, time, place and
record date of the Special Meeting after they are fixed.
THIS OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES OR WRITTEN DEMANDS
FOR ANY MEETING OF THE COMPANY'S SHAREHOLDERS. ANY SUCH SOLICITATION WILL BE
MADE ONLY PURSUANT TO PROXY OR OTHER SOLICITING MATERIALS COMPLYING WITH THE
REQUIREMENTS OF SECTION 14(a) OF THE EXCHANGE ACT AND THE RULES AND
REGULATIONS THEREUNDER.
Plans for the Company. In connection with the Offer, Parent and the
Purchaser have reviewed, and will continue to review, on the basis of publicly
available information, various possible business strategies that they might
consider in the event that the Purchaser acquires control of the Company,
whether pursuant to this Offer, the Proposed Merger or otherwise. If and to
the extent that the Purchaser acquires control of the Company or otherwise
obtains access to the books and records of the Company, Parent and the
Purchaser intend to conduct a detailed review of the Company and its assets,
corporate structure, dividend policy, capitalization, operations, properties,
policies, management and personnel and consider and determine what, if any,
changes would be desirable in light of the circumstances which then exist.
Such strategies could include, among other things, changes in the Company's
business, corporate structure, Articles of Incorporation, Bylaws,
capitalization, management or dividend policy.
Except as described in this Offer to Purchase, Parent and the Purchaser have
no present plans or proposals that would result in an extraordinary corporate
transaction, such as a merger, consolidation, reorganization, liquidation or
sale or transfer of a material amount of assets, involving the Company or any
of its subsidiaries, or any material changes in the Company's present
capitalization, dividend policy, employee benefit plans, corporate structure
or business or any material changes or reductions in the composition of its
management or personnel. Following further review of the Company's businesses,
financial records, personnel, operations and other matters, it is possible
such plans and intentions of Parent and the Purchaser may change.
The Proposed Merger. In general, under the WBCL and the Articles of
Incorporation, assuming satisfaction of the Business Combination Condition,
the Proposed Merger requires the approval of the Company's Board of Directors
and the approval by the affirmative vote of the holders of a majority of the
voting power of the Company's shareholders, as well as compliance with the
laws of the State of Delaware applicable to the Proposed Merger.
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Accordingly, if the Purchaser acquires Common Shares entitling it to
exercise at least a majority of the voting power of the outstanding Common
Shares pursuant to the Offer, the Purchaser would have the voting power to
approve the Proposed Merger without the vote of any other shareholders of the
Company and could effect the Proposed Merger by so voting and by action of the
Boards of Directors of the Purchaser and the Company. The Minimum Tender
Condition requires that there shall have been validly tendered and not
properly withdrawn prior to the Expiration Date a number of Common Shares
which, together with the Common Shares beneficially owned by the Purchaser and
its affiliates, constitutes at least a majority of the total voting power of
all Common Shares outstanding on a fully diluted basis on the date of
purchase. Upon consummation of the Offer, assuming the Minimum Tender
Condition, the Rights Condition, the Business Combination Condition and the
other conditions to the Offer set forth in Section 14 are satisfied or waived,
the Purchaser and Parent will own sufficient Common Shares to approve the
Proposed Merger without the vote of any other shareholder.
Further, the WBCL provides that if a parent corporation owns 90% or more of
each class of outstanding shares of a subsidiary corporation, the parent
corporation may merge the subsidiary corporation into itself upon adoption of
a merger agreement by the board of directors of the parent corporation and
upon complying with certain notice requirements, but without approval of the
shareholders of the parent or subsidiary (a "Short-Form Merger"). Accordingly,
if the Purchaser owns 90% or more of the outstanding Common Shares after
consummation of the Offer, a Short-Form Merger could be effected by action of
the Board of Directors of the Purchaser without the approval of the Company's
shareholders; however, at the present time, the Purchaser does not intend to
effect the Proposed Merger through a Short-Form Merger, even if the Purchaser
owns such percentage of the Common Shares.
Neither Parent nor the Purchaser can give any assurance as to whether, as a
result of information hereafter obtained by either Parent or the Purchaser,
changes in general economic or market conditions or in the business of the
Company, or other presently unforeseen factors, the Proposed Merger will be
submitted to the Company's shareholders or whether the Proposed Merger will be
delayed or abandoned. Whether or not the Proposed Merger is consummated,
Parent and the Purchaser reserve the right to acquire additional Common Shares
following the expiration or consummation of the Offer through private
purchases, market transactions, tender or exchange offers or otherwise on
terms and at prices that may be more or less favorable than those of the Offer
or, subject to any applicable legal restrictions, to dispose of any or all
Common Shares acquired by Parent and the Purchaser.
Dissenters' Rights. Under the WBCL, holders of record and beneficial owners
of the Common Shares may be entitled to dissenters' rights to object to the
Proposed Merger and demand payment of the "fair value" of their Common Shares
in cash, if they properly exercise such rights in connection with the
consummation of the Proposed Merger in accordance with the provisions of the
WBCL. Such dissenters' rights will not be available if the Common Shares are
registered on a national securities exchange or quoted on the National
Association of Securities Dealers, Inc., automated quotations system on the
record date fixed to determine the shareholders of the Company entitled to
notice of a shareholders' meeting at which shareholders are to vote on the
Proposed Merger, unless the Proposed Merger would be a "business combination"
as defined in Section 180.1130(3) of the WBCL. The Proposed Merger would not
be a "business combination" if, among other things, it is consummated as a
Short-Form Merger or, at the time, the Company does not have a class of equity
securities held of record by 500 or more persons and at least 100 shareholders
of record who have unlimited voting rights and who are residents of the State
of Wisconsin. "Fair value" of the Common Shares would be determined
immediately before the consummation of the Proposed Merger, excluding any
appreciation or depreciation in anticipation of the Proposed Merger unless
such exclusion would be inequitable; provided, however, that if the Proposed
Merger is a business combination, "fair value" will be determined pursuant to
Section 180.1130(9)(a) of the WBCL with reference to the public market price
of the Common Shares if available or, if not available, by a good faith
determination of the Company's Board of Directors. The "fair value," as so
determined, could be more or less than the value per Common Share to be paid
pursuant to the Offer and the Proposed Merger.
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The foregoing summary of the rights of dissenting shareholders does not
purport to be a complete statement of the procedures to be followed by
shareholders desiring to exercise their dissenters' rights in connection with
the Proposed Merger. The preservation and exercise of dissenters' rights are
conditioned on strict adherence to the applicable provisions of the WBCL.
"Going Private" Transactions. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain "going private" transactions
and which may under certain circumstances be applicable to the Proposed
Merger. However, Rule 13e-3 would be inapplicable if (i) the Common Shares are
deregistered under the Exchange Act prior to the Proposed Merger or other
business combination or (ii) the Proposed Merger or other business combination
is consummated within one year after the purchase of the Common Shares
pursuant to the Offer and the amount paid per Common Share in the Proposed
Merger or other business combination is at least equal to the amount paid per
Common Share in the Offer. 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 shareholders in
such transaction be filed with the Commission and disclosed to shareholders
prior to the consummation of the transaction. The securities regulations of
the State of Wisconsin (Wisconsin Administrative Code Section DFI-Sec 6.05)
contain provisions that under certain circumstances may require a filing in
connection with the fairness of certain "going private" transactions. The
Purchaser and Parent believe such provisions are not applicable to the Offer
or the Proposed Merger.
SECTION 13. DIVIDENDS AND DISTRIBUTIONS
If, on or after the Applicable Date (April 18, 1997), the Company should (a)
split, combine or otherwise change the Common Shares or its capitalization,
(b) acquire or otherwise cause a reduction in the number of outstanding Common
Shares or other securities or (c) issue or sell additional Common Shares
(other than the issuance of Common Shares under options outstanding prior to
the Applicable Date, in accordance with the terms of such options as publicly
disclosed prior to the Applicable Date), shares of any other class of capital
stock, other voting securities or any securities convertible into, or rights,
warrants or options, conditional or otherwise, to acquire, any of the
foregoing, then, subject to the provisions of Section 14, the Purchaser, in
its sole discretion, may make such adjustments as it deems appropriate in the
Offer Price and other terms of the Offer, including, without limitation, the
number or type of securities offered to be purchased.
If, on or after the Applicable Date, the Company should declare or pay any
cash dividend on the Common Shares (other than regular quarterly cash
dividends in an amount not to exceed $.03 per Common Share) or other
distribution on the Common Shares, or issue with respect to the Common Shares
any additional Common Shares, shares of any other class of capital stock,
other voting securities or any securities convertible into, or rights,
warrants or options, conditional or otherwise, to acquire, any of the
foregoing, payable or distributable to shareholders of record on a date prior
to the transfer of the Common Shares purchased pursuant to the Offer to the
Purchaser or its nominee or transferee on the Company's stock transfer
records, then, subject to the provisions of Section 14, (i) the Offer Price
may, in the sole discretion of the Purchaser, be reduced by the amount of any
such cash dividend or cash distribution and (ii) the whole of any such noncash
dividend, distribution or issuance to be received by the tendering
shareholders will (a) be received and held by the tendering shareholders for
the account of the Purchaser and will be required to be promptly remitted and
transferred by each tendering shareholder to the Depositary for the account of
the Purchaser, accompanied by appropriate documentation of transfer, or (b) at
the direction of the Purchaser, be exercised for the benefit of the Purchaser,
in which case the proceeds of such exercise will promptly be remitted to the
Purchaser. Pending such remittance and subject to applicable law, the
Purchaser will be entitled to all rights and privileges as owner of any such
noncash dividend, distribution, issuance or proceeds and may withhold the
entire Offer Price or deduct from the Offer Price the amount or value thereof,
as determined by the Purchaser in its sole discretion.
SECTION 14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other term or provision of the Offer, the Purchaser will
not be required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) under
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the Exchange Act (relating to a bidder's obligation to pay for or return
tendered securities promptly after the termination or withdrawal of such
bidder's offer), to pay for any Common Shares or Rights not theretofore
accepted for payment or paid for (and the Purchaser may postpone the
acceptance for payment or, subject to the restriction set forth above, payment
for any tendered Common Shares or Rights pursuant to the Offer, and may amend
or terminate the Offer (whether or not any Common Shares or Rights have
theretofore been accepted for payment or paid for)), unless (1) the Minimum
Condition shall have been satisfied, (2) the Rights Condition shall have been
satisfied, (3) the Business Combination Condition shall have been satisfied,
and (4) any waiting period under the HSR Act applicable to the purchase of
Common Shares pursuant to the Offer shall have expired or been terminated.
Furthermore, notwithstanding any other term or provision of the Offer, and in
addition to its other rights under the Offer, the Purchaser will not be
required to accept for payment or, subject as aforesaid, to pay for any Common
Shares or Rights not theretofore accepted for payment or paid for, and may
terminate or amend the Offer if, at any time on or after the Applicable Date
(April 18, 1997), and regardless of any delay in exercising any such rights,
and before the acceptance of such Common Shares or Rights for payment or,
subject to any applicable rules and regulations of the Commission, the payment
therefor, any of the following events or facts shall have occurred (or if such
events or facts shall have occurred prior to the Applicable Date but shall not
have been publicly disclosed until after such date):
(a) there shall be threatened, instituted or pending any action,
proceeding, application, claim or counterclaim by any government or
governmental, regulatory or administrative authority or agency, domestic,
foreign or supranational (each, a "Governmental Entity"), or by any other
person, domestic or foreign, before any court or Governmental Entity,
(i)(A) challenging or seeking to, or which is reasonably likely to, make
illegal, delay or otherwise directly or indirectly restrain or prohibit, or
seeking to, or which is reasonably likely to, impose voting, procedural,
price or other requirements, in addition to those required by federal
securities laws and the Wisconsin Business Combination Law (each as in
effect on the date of this Offer to Purchase), in connection with, the
making of the Offer, the acceptance for payment of, or payment for, some of
or all the Common Shares by the Purchaser, Parent or any other affiliate of
Parent or the consummation by the Purchaser, Parent or any other affiliate
of Parent of a merger or other similar business combination with the
Company, (B) seeking to, or which is reasonably likely to, prevent Parent
from realizing the full benefits of a merger with the Company, (C) seeking
to obtain, or which is reasonably likely to result in, material damages
from Parent or the Purchaser, or (D) otherwise directly or indirectly
challenging, objecting to or otherwise adversely impacting the transactions
contemplated by the Offer, the Proposed Merger or any other similar
business combination, (ii) seeking to, or which is reasonably likely to,
restrain, prohibit or limit the ownership or operation by the Purchaser,
Parent or any other affiliate of Parent of all or any portion of the
business or assets of the Company and its subsidiaries or of the Purchaser,
Parent or any other affiliate of Parent or to compel the Purchaser, Parent
or any other affiliate of Parent to dispose of or hold separate all or any
portion of the business or assets of the Company or any of its subsidiaries
or of the Purchaser, Parent or any other affiliate of Parent or seeking to
impose, or which is reasonably likely to result in, any limitation on the
ability of the Purchaser, Parent or any other affiliate of Parent to
conduct such business or own such assets, (iii) seeking to, or which is
reasonably likely to, impose limitations on the ability of the Purchaser,
Parent or any other affiliate of Parent effectively to acquire or hold or
exercise full rights of ownership of the Common Shares, including, without
limitation, the right to exercise full voting power with respect to any
Common Shares acquired or owned by the Purchaser, Parent or any other
affiliate of Parent on all matters properly presented to the Company's
shareholders or the right to vote any shares of capital stock of any
subsidiary directly or indirectly owned by the Company, (iv) seeking to, or
which is reasonably likely to, require divestiture by the Purchaser, Parent
or any other affiliate of Parent of any Common Shares, (v) seeking, or
which is reasonably likely to result in, any material diminution in the
benefits expected to be derived by the Purchaser, Parent or any other
affiliate of Parent as a result of the transactions contemplated by the
Offer, the Proposed Merger or any other similar business combination with
the Company, (vi) otherwise directly or indirectly relating to the Offer or
the Proposed Merger or which otherwise, in the reasonable judgment of the
Purchaser, might materially adversely affect the Company or any of its
subsidiaries or the Purchaser, Parent or any other affiliate of Parent or
the value of the Common Shares or (vii) in the reasonable judgment of the
Purchaser, adversely affecting the business,
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properties, assets, liabilities, capitalization, shareholders' equity,
condition (financial or otherwise), operations, management, key personnel,
licenses, franchises, results of operations or prospects of the Company or
any of its subsidiaries;
(b) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction proposed,
enacted, enforced, promulgated, amended, issued or deemed applicable to (i)
the Purchaser, Parent or any other affiliate of Parent or the Company or
any of its subsidiaries or (ii) the Offer, the Proposed Merger or other
similar business combination by the Purchaser, Parent or any other
affiliate of Parent with the Company, by any government, legislative body
or court, domestic, foreign or supranational, or Governmental Entity, other
than the routine application of the waiting period provisions of the HSR
Act to the Offer, that, in the reasonable judgment of the Purchaser, might,
directly or indirectly, result in any of the consequences referred to in
clauses (i) through (vii) of paragraph (a) above;
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, capitalization, shareholders' equity,
condition (financial or otherwise), operations, management, key personnel,
licenses, franchises, results of operations or prospects of the Company or
any of its subsidiaries or affiliates or in the general economic or
financial market conditions in the United States or abroad that, in the
reasonable judgment of the Purchaser, is or may be materially adverse to
the Company or any of its subsidiaries, or the Purchaser shall have become
aware of any facts that, in the reasonable judgment of the Purchaser, have
or may have a material adverse impact upon the value of the Company or any
of its subsidiaries or the value of the Common Shares to the Purchaser,
Parent or any other affiliate of Parent;
(d) there shall have occurred or been threatened (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the
United States, (ii) any extraordinary or material adverse change in the
financial markets or major stock exchange indices in the United States or
abroad, including without limitation a decline of at least 15% in either
the Dow Jones Average of Industrial Stocks or the Standard and Poor's 500
Index from that existing at the close of business on the Applicable Date,
or in the market price of the Common Shares, (iii) any change in the
general political, market, economic or financial conditions in the United
States or abroad that could, in the reasonable judgment of the Purchaser,
have a material adverse effect upon the business, properties, assets,
liabilities, capitalization, shareholders' equity, condition (financial or
otherwise), operations, management, key personnel, licenses, franchises,
results of operations or prospects of the Company or any of its
subsidiaries or the trading in, or value of, the Common Shares, (iv) any
material change in United States currency exchange rates or any other
currency exchange rates or a suspension of, or limitation on, the markets
therefor, (v) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (vi) any limitation
(whether or not mandatory) by any government, domestic, foreign or
supranational, or Governmental Entity on, or other event that, in the
reasonable judgment of the Purchaser, might adversely affect, the extension
of credit by banks or other lending institutions, (vii) a commencement of a
war or armed hostilities or other national or international calamity
directly or indirectly involving the United States or (viii) in the case of
any of the foregoing situations described in clauses (i) through (vii) of
this paragraph (d) existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof;
(e) the Company or any of its subsidiaries shall have, directly or
indirectly, (i) split, combined or otherwise changed, or authorized or
proposed a split, combination or other change of, the Common Shares or its
capitalization, (ii) acquired or otherwise caused a reduction in the number
of, or authorized or proposed the acquisition or other reduction in the
number of, outstanding Common Shares or other securities, other than a
redemption of the Rights in accordance with the terms of the Rights
Agreement as publicly disclosed to be in effect on the Applicable Date and
other than the Company's existing Common Share repurchase program on the
terms previously publicly disclosed by the Company, (iii) issued,
distributed or sold, or authorized, proposed or announced the issuance,
distribution or sale of, additional Common Shares (other than the issuance
of Common Shares under options outstanding prior to the
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Applicable Date in accordance with the terms of such options as publicly
disclosed prior to the Applicable Date), shares of any other class of
capital stock, other voting securities or any securities convertible into
or exchangeable for, or rights, warrants or options, conditional or
otherwise, to acquire, any of the foregoing, (iv) declared or paid, or
proposed to declare or pay, any dividend (other than regular quarterly cash
dividends not to exceed $.03 per Common Share having customary and usual
record and payment dates) or other distribution, whether payable in cash,
securities or other property, on or with respect to any shares of capital
stock of the Company (other than a distribution of the Rights Certificates
or a redemption of the Rights in accordance with the Rights Agreement as
publicly disclosed to be in effect on the Applicable Date), (v) altered or
proposed to alter any material term of any outstanding security (including
the Rights) other than to amend the Rights Agreement to render the Rights
inapplicable to the Offer and the Proposed Merger, (vi) issued, distributed
or sold, or authorized or proposed the issuance, distribution or sale of
any debt securities or any securities convertible into or exchangeable for
debt securities or any rights, warrants or options entitling the holder
thereof to purchase or otherwise acquire any debt securities or incurred,
or authorized or proposed the incurrence of, any debt other than in the
ordinary course of business or any debt containing burdensome covenants,
(vii) authorized, recommended, proposed, entered into or announced its
intention to enter into an agreement with respect to, or to cause, any
merger (other than the Proposed Merger), consolidation, liquidation,
dissolution, business combination, acquisition of assets or securities,
disposition of assets or securities, release or relinquishment of any
material contractual or other right of the Company or any of its
subsidiaries or any comparable event not in the ordinary course of
business, (viii) authorized, recommended, proposed or entered into, or
announced its intention to authorize, recommend, propose or enter into, any
agreement or arrangement with any person or group that in the reasonable
judgment of the Purchaser could adversely affect either the value of the
Company or any of its subsidiaries or the value of the Common Shares to the
Purchaser, Parent or any other affiliate of Parent, (ix) entered into any
employment, severance or similar agreement, arrangement or plan with or for
the benefit of any of its employees other than in the ordinary course of
business in accordance with past practice or entered into or amended any
agreements, arrangements or plans so as to provide for increased or
accelerated benefits to the employees as a result of or in connection with
the transactions contemplated by the Offer, the Proposed Merger or any
other business combination, (x) except as may be required by law, taken any
action to terminate or amend any employee benefit plan (as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended) of the Company or any of its subsidiaries, or the Purchaser shall
have become aware of any such action that was not disclosed in publicly
available filings prior to the Applicable Date, (xi) amended, or authorized
or proposed any amendment to, the Articles of Incorporation or Bylaws
(other than any amendment which provides that the Rights are inapplicable
to the Offer and the Proposed Merger and other than any amendment to the
Bylaws proposed by Parent and the Purchaser to be considered at the Special
Meeting), or the Purchaser shall become aware that the Company or any of
its subsidiaries shall have proposed or adopted any such amendment that was
not disclosed in publicly available filings prior to the Applicable Date or
(xii) otherwise acted out of the ordinary course of business, consistent
with past practice;
(f) a tender or exchange offer for any Common Shares shall have been made
or publicly proposed to be made by any other person (including the Company
or any of its subsidiaries or affiliates), or it shall have been publicly
disclosed or the Purchaser shall have otherwise learned that (i) any
person, entity (including the Company or any of its subsidiaries) or
"group" (within the meaning of Section 13(d)(3) of the Exchange Act) shall
have acquired or proposed to acquire beneficial ownership of more than 5%
of any class or series of capital stock of the Company (including the
Common Shares) or any of its subsidiaries, through the acquisition of
stock, the formation of a group or otherwise, or shall have been granted
any right, option or warrant, conditional or otherwise, to acquire
beneficial ownership of more than 5% of any class or series of capital
stock of the Company (including the Common Shares) or any of its
subsidiaries, other than acquisitions of Common Shares for bona fide
arbitrage purposes only and other than as disclosed in a Schedule 13D or
13G on file with the Commission prior to the Applicable Date, (ii) any such
person, entity or group that prior to the Applicable Date, had filed such a
Schedule with the Commission, shall have acquired or proposed to acquire
(other than acquisitions of Common Shares for bona fide arbitrage purposes
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only), through the acquisition of stock, the formation of a group or
otherwise, beneficial ownership of additional shares of any class or series
of capital stock of the Company (including the Common Shares) or any of its
subsidiaries constituting 2% or more of any such class or series, or shall
have been granted any right, option or warrant, conditional or otherwise,
to acquire beneficial ownership of additional shares of any class or series
of capital stock of the Company (including the Common Shares) or any of its
subsidiaries constituting 2% or more of any such class or series, (iii) any
person or group shall have entered into a definitive agreement or an
agreement in principle or made or announced a proposal with respect to a
tender offer or exchange offer or a merger, consolidation or other business
combination with or involving the Company or any of its subsidiaries or
(iv) any person shall have filed a Notification and Report Form under the
HSR Act (or amended a prior filing to increase the applicable filing
threshold set forth therein) or made a public announcement reflecting an
intent to acquire the Company or any assets or subsidiaries of the Company;
(g) the Purchaser shall become aware (i) that any contractual right of
the Company or any of its subsidiaries shall be impaired or otherwise
adversely affected or that any amount of indebtedness of the Company or any
of its subsidiaries shall become accelerated or otherwise become due or
become subject to acceleration prior to its stated due date, in any case
with or without notice or the lapse of time or both, as a result of or in
connection with the transactions contemplated by the Offer or the Proposed
Merger or any other business combination involving the Company, which, in
the aggregate, would be material, (ii) of any covenant, term or condition
in any of the Company's or any of its subsidiaries' instruments or
agreements that has or may have, in the aggregate, a material adverse
effect on (x) the business, properties, assets, liabilities,
capitalization, shareholders' equity, condition (financial or otherwise),
operations, management, key personnel, licenses, franchises, results of
operations or prospects of the Company or any of its subsidiaries
(including, but not limited to, any event of default that may result from
the consummation of the Offer, the acquisition of control of the Company or
any of its subsidiaries or the Proposed Merger or any other business
combination involving the Company) or (y) the value of the Common Shares to
Parent, the Purchaser or any of their respective affiliates or (z) the
consummation by Parent, the Purchaser or any of their respective affiliates
of the Offer or the Proposed Merger or any other business combination
involving the Company or (iii) that any report, document or instrument of
the Company or any of its subsidiaries filed with the Commission contained,
when filed, an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make
the statements made therein, in light of the circumstances under which they
were made, not misleading or that the Company or any of its subsidiaries
shall have failed to file any required report, document or instrument;
(h) any approval, permit, authorization, favorable review or consent of
any Governmental Entity (including those described or referred to in
Section 15) shall not have been obtained on terms satisfactory to the
Purchaser in its reasonable judgment; or
(i) the Purchaser shall have reached an agreement or understanding with
the Company providing for termination of the Offer, or the Purchaser,
Parent or any other affiliate of Parent shall have entered into a
definitive agreement or announced an agreement in principle with the
Company providing for a merger or other business combination with the
Company or the purchase of stock or assets of the Company;
which, in the reasonable judgment of the Purchaser in any such case, and
regardless of the circumstances (including any action or inaction by the
Purchaser, Parent or any other affiliate of Parent) giving rise to any such
condition, makes it inadvisable to proceed with the Offer and/or with such
acceptance for payment or payment.
The foregoing conditions are for the sole benefit of the Purchaser and
Parent and may be asserted by the Purchaser regardless of the circumstances
giving rise to any such condition or may be waived by the Purchaser in whole
or in part at any time and from time to time in its sole discretion. The
failure by the Purchaser at any time to exercise any of the foregoing rights
will not be deemed a waiver of any such right, the waiver of any such right
with respect to particular facts and circumstances will not be deemed a waiver
with respect to any other facts and circumstances and each such right will be
deemed an ongoing right that may be asserted at any
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time and from time to time. Any determination by the Purchaser concerning the
events described in this Section 14 will be final and binding upon all parties
including tendering shareholders.
SECTION 15. CERTAIN LEGAL MATTERS
General. Except as otherwise disclosed herein, based on a review of publicly
available information filed by the Company with the Commission, neither the
Purchaser nor Parent is aware of (i) any license or regulatory permit that
appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the acquisition of
Common Shares by the Purchaser pursuant to the Offer or the Proposed Merger or
(ii) any approval or other action, by any governmental, administrative or
regulatory agency or authority, domestic, foreign or supranational, that would
be required for the acquisition or ownership of Common Shares by the Purchaser
as contemplated herein. Should any such approval or other action be required,
the Purchaser currently contemplates that such approval or action would be
sought. While the Purchaser does not currently intend to delay the acceptance
for payment of Common Shares tendered pursuant to the Offer pending the
outcome of any such matter, there can be no assurance that any such approval
or action, if needed, would be obtained or would be obtained without
substantial conditions or that adverse consequences might not result to the
business of the Company, the Purchaser or Parent or that certain parts of the
businesses of the Company, the Purchaser or Parent might not have to be
disposed of in the event that such approvals were not obtained or any other
actions were not taken. The Purchaser's obligation under the Offer to accept
for payment and pay for Common Shares is subject to certain conditions. See
Section 14.
Antitrust. Under the HSR Act, and the rules and regulations that have been
promulgated thereunder, certain acquisition transactions may not be
consummated unless certain information has been furnished to the Antitrust
Division and the FTC and certain waiting period requirements have been
satisfied. Parent expects to file a Notification and Report Form with respect
to the Offer and the Proposed Merger on April 28, 1997.
Under the provisions of the HSR Act applicable to the Offer, the purchase of
Common Shares pursuant to the Offer may not be consummated until the
expiration of a 15-calendar day waiting period following such filing.
Accordingly, assuming the filing is made as expected on April 28, 1997, the
waiting period with respect to the Offer will expire at 11:59 p.m., New York
City time, on May 13, 1997, unless Parent receives a request for additional
information or documentary material, or the Antitrust Division and the FTC
terminate the waiting period prior thereto. If, within such 15-day period,
either the Antitrust Division or the FTC requests additional information or
material from Parent concerning the Offer, the waiting period will be extended
and would expire at 11:59 p.m., New York City time, on the tenth calendar day
after the date of substantial compliance by Parent with such request. Only one
extension of the waiting period pursuant to a request for additional
information is authorized by the HSR Act. Thereafter, such waiting period may
be extended only by court order or with the consent of Parent. The Purchaser
will not accept for payment Common Shares tendered pursuant to the Offer
unless and until the waiting period requirements imposed by the HSR Act with
respect to the Offer have been satisfied. See Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of
Common Shares pursuant to the Offer and the Proposed Merger. At any time
before or after the Purchaser's acquisition of Common Shares, the Antitrust
Division or the FTC could take such action under the antitrust laws as it
deems necessary or desirable in the public interest, including seeking to
enjoin the acquisition of Common Shares pursuant to the Offer or otherwise or
seeking divestiture of Common Shares acquired by the Purchaser or divestiture
of substantial assets of Parent or its subsidiaries. Private parties and state
attorneys general may also bring action under the antitrust laws under certain
circumstances. Based upon an examination of publicly available information
relating to the businesses in which Parent and the Company are engaged, Parent
and the Purchaser believe that the acquisition of Common Shares by the
Purchaser will not violate the antitrust laws. Nevertheless, there can be no
assurance that a challenge to the Offer or other acquisition of Common Shares
by the Purchaser on antitrust grounds will not be made or, if such a challenge
is made, of the result. See Section 14 for certain conditions to the Offer,
including conditions with respect to litigation and certain governmental
actions.
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Foreign Approvals. According to publicly available information, the Company
also owns property and conducts business in a number of other countries and
jurisdictions, including Germany, Canada and the United Kingdom. In connection
with the acquisition of the Common Shares pursuant to the Offer, the laws of
certain foreign countries and jurisdictions may require the filing of
information with, or the obtaining of the approval of, governmental
authorities in such countries and jurisdictions. In addition, the waiting
period prior to consummation of the Offer associated with such filings or
approvals may extend beyond the scheduled Expiration Date. For example, the
laws of Germany include a mandatory filing requirement which applies to
consummation of the Offer pursuant to which the initial waiting period is one
month, although the relevant authorities in Germany frequently clear such
transactions after a shorter period. The governments in such countries and
jurisdictions might attempt to impose additional conditions on the Company's
operations conducted in such countries and jurisdictions as a result of the
acquisition of the Common Shares pursuant to the Offer or the Proposed Merger.
There can be no assurance that the Purchaser will be able to cause the Company
or its subsidiaries to satisfy or comply with such laws or that compliance or
noncompliance will not have adverse consequences for the Company or any
subsidiary after purchase of the Common Shares pursuant to the Offer or the
Proposed Merger. See Section 14 for certain conditions to the Offer.
Business Combination Law. The Wisconsin Business Combination Law prohibits
Section 1141 Transactions, such as the Proposed Merger, between a Wisconsin
resident domestic corporation (such as the Company) and any Interested
Stockholder for a period of three years after the date the person becomes an
Interested Stockholder. After such three-year period, a Section 1141
Transaction between a Wisconsin resident domestic corporation and such
Interested Stockholder is prohibited unless certain "fair price" provisions
are complied with, the Section 1141 Transaction is approved by the vote of the
holders of a majority of the voting stock not beneficially owned by the
Interested Stockholder or the acquisition of stock resulting in such
stockholder becoming an Interested Stockholder was approved by the
corporation's board of directors prior to the relevant acquisition date. The
Wisconsin Business Combination Law restrictions do not apply to a Section 1141
Transaction with an Interested Stockholder within three years of the date such
stockholder became an Interested Stockholder if either (a) the Interested
Stockholder's acquisition of the corporation's shares on the date the
Interested Stockholder became an Interested Stockholder or (b) the Section
1141 Transaction, is approved by the board of directors of the corporation
prior to the date on which the Interested Stockholder became an Interested
Stockholder.
Parent and the Purchaser are requesting that the Company's Board of
Directors take appropriate action so that the Wisconsin Business Combination
Law is not applicable to the acquisition of Common Shares pursuant to the
Offer or the Proposed Merger. There can be no assurance that the Company's
Board of Directors will do so. In the event that the Company's Board of
Directors fails to do so prior to the intended date of the consummation of the
Offer, the Purchaser expects its nominees to the Company's Board of Directors,
if elected at the Special Meeting, and subject to their fiduciary duties, to
take such appropriate action as shall result in the satisfaction of the
Business Combination Condition.
CONSUMMATION OF THE OFFER IS CONDITIONED UPON THE PURCHASER BEING SATISFIED,
IN ITS REASONABLE JUDGMENT, THAT THE RESTRICTIONS CONTAINED IN THE WISCONSIN
BUSINESS COMBINATION LAW WILL NOT APPLY TO THE ACQUISITION OF COMMON SHARES
PURSUANT TO THE OFFER OR THE PROPOSED MERGER.
The WBCL contains certain other provisions restricting certain business
combinations and other transactions with significant shareholders under
certain circumstances and limiting, under certain circumstances, the voting
power of a shareholder that holds in excess of 20% of the voting power of
certain corporations. The Articles of Incorporation indicate, however, that
the Company has elected not to have such provisions apply to the Company. It
is a condition of the Offer that such provisions not be deemed applicable to
the Offer or the purchase of Common Shares by the Purchaser or Parent. See
Section 14.
Litigation. On April 25, 1997, Parent and the Purchaser commenced an action
in the United States District Court for the Eastern District of Wisconsin
against the Company and certain of the Company's directors (the
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"Action"). Harnischfeger Indus., Inc. v. Isles, et al., C.A. No. 97-C-0488. In
the complaint in the Action, Parent and the Purchaser allege, among other
things, that the defendants have violated the disclosure requirements of the
Exchange Act, and the rules and regulations promulgated by the Commission
thereunder, by making false or misleading statements, or omitting to state
facts required to be disclosed in order to prevent other statements from being
misleading, in connection with: (a) disclosures in the Company Annual Proxy
Statement describing the MSPP; (b) disclosures in such Annual Proxy Statement
concerning the number of nominees the Company has nominated for election at
its April 30, 1997 Annual Meeting and the provisions of the Bylaws concerning
board size and composition; and (c) disclosures in the Company's public
filings concerning the Rights Agreement (sometimes known as a "poison pill").
In addition, Parent and the Purchaser allege in the complaint in the Action
that the defendants are now violating, and threaten to violate, their
fiduciary duties to the Company's shareholders in connection with the
consideration of Parent's acquisition proposal and in connection with the
proxy contest described herein. Among other things, Parent and the Purchaser
allege that, under the circumstances present here, defendants have a fiduciary
duty to redeem the Rights and/or to cause them to be inapplicable to the
Offer. As relief, the complaint seeks a declaration that any proxies obtained
by the Company through the use of its proxy statement for its 1997 Annual
Meeting are null and void, except such proxies as may be obtained following
correction and supplementation of the proxy materials, and injunctive relief
requiring, among other things, the defendants to redeem or cause the
redemption of the Rights, prohibiting the defendants from amending the Rights
Agreement in any way other than to cause its redemption or inapplicability to
the Offer, and prohibiting the defendants from amending, deleting or modifying
any provision of the Bylaws that relates to the right of shareholders to call
a special meeting and/or to take action at a special meeting. According to the
Company Annual Proxy Statement, the Company has obligated itself to (i) pay
the interest on commercial bank loans taken out by the executives
participating in MSPP, (ii) pay 50% of any losses on the Common Shares
incurred (under certain circumstances) by such executives, (iii) pay the
principal of the certain bank loans taken out by such executives to the extent
certain guarantees of the Company become applicable, and (iv) reimburse such
executives for certain taxes paid by them as a result of the Company's
indemnification of such executives' losses. In the Action, Parent has asserted
that as a result of the Company's economic interest in the Common Shares
nominally owned by individual executives (as disclosed in the Company's
publicly filed documents), Common Shares issued in connection with the MSPP
are not, for certain purposes, outstanding, but are instead treasury stock
that may not be voted and may not be counted toward certain calculations,
including the calculation of the number of votes required to approve a motion
or elect directors at a meeting of shareholders.
Other State Laws. As the Company's executive offices and principal place of
business are located in the State of Wisconsin, the Offer may be subject to
Chapter 552 of the Wisconsin Statutes (the "Wisconsin Corporate Take-Over
Law"). The Wisconsin Corporate Take-Over Law makes it unlawful, under certain
circumstances, for any person to make a takeover offer involving a target
company in Wisconsin, which meets certain criteria, or to acquire any equity
securities of such a target company pursuant to the takeover offer, unless a
registration statement has been filed with the Wisconsin division of
securities 10 days prior to the commencement of the takeover offer and has
become effective or such takeover offer is exempted by rule or order of the
division. The Wisconsin Corporate Take-Over Law also imposes certain reporting
and filing requirements on persons making such a takeover offer and makes
unlawful certain fraudulent and deceptive practices, all of which provisions
may be applicable to the Offer. The applicability of the Wisconsin Corporate
Take-Over Law depends upon the percentage of the Company's outstanding Common
Shares held of record by residents of Wisconsin, which is not determinable
with certainty from publicly available information. Parent and the Purchaser
have obtained from the division of securities an exemption order permitting
the Offer to be made without prior registration, provided that no Common
Shares are purchased or taken up pursuant to the Offer unless a registration
statement is effective or registration is found not to be required after the
information necessary to make this determination is obtained from the Company.
If it is found that compliance is required, Parent and the Purchaser presently
intend to comply with the Wisconsin Corporate Take-Over Law, including making
any required filings. Parent and the Purchaser both have reserved their rights
to challenge the constitutionality of the Wisconsin Corporate Take-Over Law or
its applicability to them.
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A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, shareholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In 1982, in Edgar v. MITE Corp., the Supreme
Court of the United States invalidated on constitutional grounds the Illinois
Business Takeover Statute, which, as a matter of state securities law, made
takeovers of corporations meeting certain requirements more difficult.
However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court
held that the Indiana Control Share Acquisition Act was constitutional. Such
Act, by its terms, is applicable only to corporations that have a substantial
number of shareholders in Indiana and are incorporated there. Subsequently, a
number of federal courts ruled that various state takeover statutes were
unconstitutional insofar as they apply to corporations incorporated outside
the state of enactment.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. The Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer, and the Purchaser has not attempted to comply with
any state takeover statutes in connection with the Offer or the Merger, except
for the Wisconsin Corporate Take-Over Law. The Purchaser reserves the right to
challenge the validity or applicability of any state law allegedly applicable
to the Offer or the Proposed Merger, including the Wisconsin Corporate Take-
Over Law, and nothing in this Offer to Purchase nor any action taken in
connection herewith is intended as a waiver of that right. In the event that
it is asserted that one or more takeover statutes apply to the Offer or the
Proposed Merger, and it is not determined by an appropriate court that such
statute or statutes do not apply or are invalid as applied to the Offer or the
Proposed Merger, as applicable, the Purchaser may be required to file certain
documents with, or receive approvals from, the relevant state authorities, and
the Purchaser might be unable to accept for payment or purchase Common Shares
and/or Rights tendered pursuant to the Offer or be delayed in continuing or
consummating the Offer. In such case, the Purchaser may not be obligated to
accept for payment or purchase any Common Shares and/or Rights tendered. See
Section 14.
SECTION 16. FEES AND EXPENSES
Lehman Brothers is acting as Dealer Manager in connection with the Offer and
as Parent's financial advisor with respect to the Offer and the Proposed
Merger. As compensation for such services, Parent has agreed to pay or cause
to be paid to Lehman Brothers (i) if Parent or any of its affiliates acquires
substantially all of the assets of the Company or becomes a party to any
merger or consolidation with the Company, $3.5 million, or (ii) if a
transaction is not consummated, a fee equal to 7% of Parent's profits from the
sale of its Common Shares or of any termination fee received. The first
$250,000 of the fee payable under (i) above is payable within ten days of
commencement of the Offer, regardless of whether the full amount of such fee
ever becomes payable. Parent has also agreed to reimburse Lehman Brothers for
certain reasonable expenses incurred in connection with Lehman Brothers'
engagement, and has also agreed to indemnify Lehman Brothers (and certain
affiliated persons) against certain liabilities and expenses, which would
include, without limitation, certain liabilities under federal securities
laws.
Lehman Brothers has rendered and may from time to time in the future render
various investment banking services to Parent and its affiliates, for which it
has been and is expected to be paid customary fees. In the normal course of
its business, Lehman Brothers is a market maker with respect to the Common
Shares and regularly buys and sells Common Shares for its own account and for
the accounts of its customers, which transactions may result in Lehman
Brothers and its associates having at any time a net "long" or net "short"
position in Common Shares or option contracts with other derivatives in or
relating to the Common Shares. As of April 18, 1997, Lehman Brothers had a net
"long" position of 397 Common Shares.
Georgeson & Company Inc. and Kissel-Blake Inc. have been retained by the
Purchaser as Information Agents in connection with the Offer. The Information
Agents may contact holders of Common Shares by mail, telephone, telex,
telegraph, the internet and personal interview and may request brokers,
dealers and other nominee shareholders to forward material relating to the
Offer to beneficial owners of Common Shares. The Purchaser will pay the
Information Agents reasonable and customary compensation for all such services
in
42
<PAGE>
addition to reimbursing the Information Agents for reasonable out-of-pocket
expenses in connection therewith. The Purchaser has agreed to indemnify the
Information Agents against certain liabilities and expenses in connection with
the Offer, including, without limitation, certain liabilities under the
federal securities laws.
ChaseMellon Shareholder Services, L.L.C. has been retained as the
Depositary. The Purchaser will pay the Depositary reasonable and customary
compensation for its services in connection with the Offer, will reimburse the
Depositary for its reasonable out-of-pocket expenses in connection therewith
and will indemnify the Depositary against certain liabilities and expenses in
connection therewith, including, without limitation, certain liabilities under
the federal securities laws.
Except as set forth above, neither Parent nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person for soliciting
tenders of Common Shares pursuant to the Offer. Brokers, dealers, commercial
banks and trust companies and other nominees will, upon request, be reimbursed
by Parent or the Purchaser for customary clerical and mailing expenses
incurred by them in forwarding offering materials to their customers.
SECTION 17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Common Shares in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. Neither the Purchaser
nor Parent is aware of any jurisdiction in which the making of the Offer or
the acceptance thereof would not be in compliance with the laws of such
jurisdiction. The Purchaser, however, may, in its discretion, take such action
as it may deem necessary to make the Offer in any jurisdiction and extend the
Offer to holders of Common Shares in such jurisdiction. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer is being made on behalf of the Purchaser
by Lehman Brothers or one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Purchaser and Parent have filed with the Commission the Schedule 14D-1,
pursuant to Rule 14d-3 under the Exchange Act, together with Exhibits,
furnishing certain additional information with respect to the Offer, and may
file further amendments thereto. The Schedule 14D-1 and any amendments
thereto, including Exhibits, may be inspected and copies may be obtained in
the manner set forth in Section 8 (except that such material will not be
available at the regional offices of the Commission) and is also available on-
line through the Commission's EDGAR electronic filing and retrieval system.
DSFA CORPORATION
April 28, 1997
43
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets forth
the name, business or residence address, principal occupation or employment at
the present time and during the last five years, and the name and principal
business of any corporation or other organization in which such employment is
conducted or was conducted of each director and executive officer of Parent.
Except as otherwise noted, each of the Parent's directors and executive
officers is a citizen of the United States. The business address of each
executive officer of Parent is 3600 South Lake Drive, St. Francis, Wisconsin
53235. Each occupation set forth opposite a person's name, unless otherwise
indicated, refers to employment with Parent. Directors are indicated by an
asterisk.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME, BUSINESS OR EMPLOYMENT AND MATERIAL
RESIDENCE ADDRESS, AGE OCCUPATIONS FOR PAST FIVE YEARS
---------------------- -------------------------------
<S> <C>
* Donna M. Alvarado........................ Principal of Aguila International, an
The Thurber Center international business development
91 Jefferson Avenue consulting firm based in Columbus, Ohio,
Columbus, Ohio 43215 since 1994. President and Chief Executive
Director since: 1992- Officer of Quest International, a non-profit
Age 48. educational organization based in Granville,
Ohio, from 1989 to 1994. Director, Park
National Bank.
* Larry D. Brady........................... President of FMC Corporation, a world leader
FMC Corporation in production of chemicals and machinery for
200 E. Randolph Drive industry, government and agriculture, since
Chicago, Illinois 60601 1993. Director of FMC Corporation since
Director since: 1995 1989. Chairman of United Defense L.P.
Age 54. Director, National Merit Scholarship
Foundation and National Association of
Manufacturers.
* Francis M. Corby, Jr..................... Executive Vice President for Finance and
Director since: 1996 Administration and Chief Financial Officer
Age 53. since 1995. Senior Vice President, Finance
and Chief Financial Officer from 1986 to
1995.
* John D. Correnti......................... President, Chief Executive Officer and
Nucor Corporation Director of Nucor Corporation, a major steel
2100 Rexford Road producer headquartered in Charlotte, North
Charlotte, North Carolina 28211 Carolina, since 1996. President, Chief
Director since: 1994 Operating Officer and Director of Nucor,
Age 49. from 1991 to 1995. Director, CEM
Corporation, Navistar International
Corporation and North Carolina Board of
Wachovia Bank.
* Harry L. Davis........................... Professor of Creative Management at the
842 Western Avenue University of Chicago since 1994. Professor
Flossmoor, Illinois 60422 of Marketing from 1963 to 1994. Deputy Dean
Director since: 1987 of the Graduate School of Business at the
Age 59. University of Chicago from 1983 to 1993.
Director, Golden Rule Insurance Company.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME, BUSINESS OR EMPLOYMENT AND MATERIAL
RESIDENCE ADDRESS, AGE OCCUPATIONS FOR PAST FIVE YEARS
---------------------- -------------------------------
<S> <C>
* Robert M. Gerrity........................ Chairman and Chief Executive Officer of
Gerrity Partners Antrim Group Inc., a Michigan-based
114 Division Street technology corporation, since December,
Bellaire, Michigan 49615 1996. Director and former President and
Director since: 1994 Chief Executive Officer of Ford New Holland,
Age 59. now New Holland n.v., a London-based
agricultural and industrial equipment
manufacturer. Director, Libralter Engineered
Systems, Rubbermaid, Inc. and Standard Motor
Products, Inc.
* Jeffery T. Grade......................... Chairman and Chief Executive Officer since
Director since: 1983 1993. President and Chief Executive Officer
Age 53. from 1992 to 1993. President and Chief
Operating Officer from 1986 to 1992.
Director, Case Corporation and Coeur D'Alene
Mines Corporation.
* John N. Hanson........................... President and Chief Operating Officer since
Director since: 1996 1996. Executive Vice President and Chief
Age 55. Operating Officer from 1995 to 1996.
President and Chief Executive Officer of Joy
Technologies Inc. from 1994 to 1995.
President, Chief Operating Officer and
Director of Joy Technologies Inc. from 1990
to 1995. Director, Schuller Corporation.
* Robert B. Hoffman........................ Senior Vice President and Chief Financial
Monsanto Company Officer of Monsanto Company, a diversified
800 North Lindbergh Blvd. company in chemicals, pharmaceuticals, food
St. Louis, Missouri 63167 products and agricultural chemicals, since
Director since: 1994 1994. Vice President-International of FMC
Age 60. Corporation, a manufacturer of machinery and
chemical products, from 1990 to 1994.
Director, Kemper Group of Municipal Funds
and Boatmen's Trust Company.
* Ralph C. Joynes.......................... Retired Vice Chairman, President and Chief
3 John Christopher Court Operating Officer of USG Corporation,
Richmond, Virginia 23226 international manufacturer of building
Director since: 1988 materials and construction systems.
Age 68.
* Jean-Pierre Labruyere.................... Chairman and Chief Executive of Labruyere,
Societe Financiere Eberle, a financial holding company based in
Labruyere, Eberle France with global interests in many
70 Avenue Edouard-Herriot business areas including oil and gas
71003 Macon France importation and distribution and food
Director since: 1994 distribution, since 1972. Director, Promodes
Citizenship: French S.A. Martin Maurel Bank--Banque de France
Age 59. Adviser.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME, BUSINESS OR EMPLOYMENT AND MATERIAL
RESIDENCE ADDRESS, AGE OCCUPATIONS FOR PAST FIVE YEARS
---------------------- -------------------------------
<S> <C>
* L. Donald LaTorre........................ Retired President and Chief Operating
Engelhard Corporation Officer, Engelhard Corporation, a world-
101 Wood Avenue leading provider of environmental
Iselin, New Jersey 08830 technologies, specialty chemical products,
Director since: 1997 engineered materials and services, since
Age 59. January 31, 1997. President and Chief
Operating Officer from 1995 to 1997. Senior
Vice President and Chief Operating Officer
from 1990 to 1995. Director, Engelhard
Corporation and N.E. Chemcat Corp.
K. Thor Lundgren........................... Executive Vice President for Law and
Age 49. Government Affairs, Secretary and General
Counsel since December 1994; Senior Vice
President, General Counsel and Secretary
from 1991 to December 1994. Prior to joining
Parent in September 1991, Mr. Lundgren was a
partner with the law firm of Michael, Best &
Friedrich.
* Leonard E. Redon......................... President and Chief Executive Officer,
Eastman Kodak Company Qualex, Inc., a wholesale photoprocessor
343 State Street company headquartered in Durham, North
Rochester, New York 14650 Carolina. Vice President of Eastman Kodak
Director since: 1997 Company, a company engaged worldwide in
Age 45. developing, manufacturing and marketing
consumer and commercial imaging products,
and President, Customer Equipment Services
Division of Eastman Kodak, since 1995.
General Manager and Vice President of
Government and Education Markets from 1994
to 1995. General Manager and Vice President
of Markets Development, U.S. and Canada from
1991 to 1994.
* Donald Taylor............................ Principal in Sullivan Associates, specialists
Sullivan Associates in board of director searches, since 1992.
5215 North Ironwood Road, Suite 107 Managing Director-USA, ANATAR Investments
Milwaukee, Wisconsin 53217 Limited, a venture capital specialist, from
Director since: 1979 1990 to 1992. Director, Banta Corporation,
Age 69. Johnson Controls, Inc., Superior Services,
Inc. and The Enhancers, Inc.
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The directors of the
Purchaser are Jeffery T. Grade, John N. Hanson and Francis M. Corby, Jr. Mr.
Grade is the Chairman of the Board and President of the Purchaser, Mr. Hanson
is Vice President and Secretary, and Mr. Corby is Vice President and
Treasurer. Each director and officer was appointed or elected in April 1997.
Each of such persons is an officer and director of Parent. Additional
information regarding the directors and officers of the Purchaser is set forth
above.
I-3
<PAGE>
SCHEDULE II
PARENT AND THE PURCHASER PURCHASES OF COMMON SHARES
Parent is the beneficial owner of an aggregate of 789,600 Common Shares, of
which the Purchaser is the beneficial owner and record holder of 1,000 Common
Shares. All of such Common Shares were purchased for cash in open market
transactions as follows:
<TABLE>
<CAPTION>
TRANSACTION SHARES PRICE PAID
DATE PURCHASED PER SHARE*
----------- --------- ----------
<S> <C> <C>
28-Feb-97 45,000 $13.8750
03-Mar-97 2,500 $13.6250
04-Mar-97 18,900 $13.6250
04-Mar-97 21,100 $13.7500
05-Mar-97 22,100 $13.7500
11-Mar-97 10,000 $14.0000
12-Mar-97 15,000 $14.0000
13-Mar-97 5,000 $14.0000
14-Mar-97 300,000 $14.1250
24-Mar-97 350,000 $14.5000
</TABLE>
- --------
* Exclusive of commissions.
On April 15, 1997, Parent contributed to the Purchaser 1,000 Common Shares
in exchange for 1,000 shares of Common Stock, par value $.10 per share, of the
Purchaser.
II-1
<PAGE>
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND/BY OVERNIGHT
(FOR ELIGIBLE INSTITUTIONS ONLY) DELIVERY:
Chase Mellon Shareholder Chase Mellon Shareholder
Services, L.L.C. (201) 329-8936 Services, L.L.C.
Reorganization Department Reorganization Department
P.O. Box 3301 CONFIRM BY TELEPHONE: 120 Broadway
South Hackensack, New 13th Floor
Jersey 07606 (201) 296-4860 New York, New York 10271
Questions and requests for assistance may be directed to the Dealer Manager
or Kissel-Blake at their respective addresses or telephone numbers set forth
below. Additional copies of this Offer to Purchase, the Letter of Transmittal
and all other tender offer materials may be obtained from the Information
Agents as set forth below, and will be furnished promptly at the Purchaser's
expense. You may also contact your broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
If you have questions concerning the Written Demand or Proxy material sent or
to be sent to you, please call Georgeson & Company Inc. at the numbers
indicated below.
IF YOU HAVE ANY QUESTIONS CONCERNING THE OFFER, THE OFFER TO PURCHASE OR THE
LETTER OF TRANSMITTAL, OR IF YOU NEED ASSISTANCE TENDERING YOUR COMMON SHARES
PURSUANT TO THE OFFER, PLEASE CALL KISSEL-BLAKE INC. AT ONE OF THE NUMBERS
INDICATED BELOW.
The Information Agents for the Offer are:
GEORGESON KISSEL BLAKE INC.
& COMPANY INC.
Wall Street Plaza 110 Wall Street
New York, NY 10005 New York, New York 10005
Banks and Brokers Call Collect: (212) Banks and Brokers Call: (212) 344-
440-9800 6733
ALL OTHERS CALL TOLL-FREE: (800) 223- ALL OTHERS CALL TOLL-FREE: (800)
2064 554-7733
The Dealer Manager for the Offer is:
LEHMAN BROTHERS
190 South LaSalle Street
25th Floor
Chicago, Illinois 60603
(312) 609-8526 (Call Collect)
<PAGE>
Exhibit (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
GIDDINGS & LEWIS, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED APRIL 28, 1997
BY
DSFA CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
HARNISCHFEGER INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MAY 23, 1997, UNLESS THE OFFER IS EXTENDED.
To The Depositary:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
BY MAIL: BY FACSIMILE BY HAND/BY OVERNIGHT
ChaseMellon Shareholder TRANSMISSION: DELIVERY:
Services, L.L.C. (FOR ELIGIBLE ChaseMellon Shareholder
Reorganization Department INSTITUTIONS ONLY) Services, L.L.C.
P.O. Box 3301 (201) 329-8936 Reorganization Department
South Hackensack, New CONFIRM BY TELEPHONE: 120 Broadway
Jersey 07606 (201) 296-4860 13th Floor
New York, New York 10271
---------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE, OR TRANSMISSION VIA FACSIMILE TO A NUMBER OTHER THAN AS LISTED ABOVE,
DOES NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL
WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CARE-
FULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by shareholders of Giddings &
Lewis, Inc. either if certificates ("Share Certificates") representing Common
Shares (as defined below) and/or certificates ("Rights Certificates")
representing Rights (as defined below) are to be forwarded herewith or, unless
an Agent's Message (as defined below) is utilized, if delivery of Common
Shares and/or Rights is to be made by book-entry transfer (in the case of
Rights, if available) to an account maintained by ChaseMellon Shareholder
Services, L.L.C. (the "Depositary") at The Depository Trust Company ("DTC") or
the Philadelphia Depository Trust Company ("PDTC") (DTC and PDTC, each a
"Book-Entry Transfer Facility" and collectively the "Book-Entry Transfer
Facilities") pursuant to the procedures set forth under Section 2 ("Procedures
for Tendering Common Shares") in the Offer to Purchase dated April 28, 1997
(the "Offer to Purchase"). UNLESS THE RIGHTS CONDITION (AS DEFINED IN THE
OFFER TO PURCHASE) IS SATISFIED, SHAREHOLDERS WILL BE REQUIRED TO TENDER ONE
RIGHT FOR EACH COMMON SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF
COMMON SHARES. UNLESS THE DISTRIBUTION DATE (AS DEFINED IN THE OFFER TO
PURCHASE) OCCURS, A TENDER OF COMMON SHARES WILL ALSO CONSTITUTE A TENDER OF
THE ASSOCIATED RIGHTS. If a shareholder desires to tender Common Shares (and
Rights) and such shareholder's Share Certificates (and, if separate, Rights
Certificates) are not immediately available (including because Rights
Certificates have not yet been distributed by the Rights Agent (as defined
below)) or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date (as defined in the Offer to Purchase),
such shareholder's tender may be effected by following the procedure for
guaranteed delivery set forth in Section 2 ("Procedures for Tendering Common
Shares") in the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO
A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE>
[_]CHECK HERE IF TENDERED COMMON SHARES AND/OR RIGHTS ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS
IN A BOOK-ENTRY TRANSFER FACILITY MAY DELIVER COMMON SHARES AND/OR RIGHTS
BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution: _____________________________________________
Check Box of Applicable Book-Entry Transfer Facility and provide Account
Number and Transaction Code Number:
[_] The Depository Trust Company [_] Philadelphia Depository Trust
Company
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
[_]CHECK HERE IF TENDERED COMMON SHARES AND/OR RIGHTS ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
DEPOSITARY (PLEASE INCLUDE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED
DELIVERY) 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 that Guaranteed Delivery: ______________________________
If Delivered by Book-Entry Transfer to a Book-Entry Transfer Facility:
Check Box of Applicable Book-Entry Transfer Facility and provide Account
Number and Transaction Code Number:
[_] The Depository Trust Company [_] Philadelphia Depository Trust
Company
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
DESCRIPTION OF COMMON SHARES TENDERED
(SEE INSTRUCTIONS 2, 3 AND 4)
- -------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(Please fill in, if blank)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SHARE CERTIFICATE(S) TENDERED
(Attach additional list if necessary)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL NUMBER OF COMMON SHARES
REPRESENTED BY NUMBER OF COMMON SHARES
CERTIFICATE NUMBER(S)* CERTIFICATES* TENDERED**
- ---------------------------------------------------------------------------------
<S> <C> <C>
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
TOTAL COMMON SHARES:
- ---------------------------------------------------------------------------------
</TABLE>
* Not required if tender is made by book-entry transfer.
** If you desire to tender fewer than all Common Shares represented by
any certificate listed above, please indicate in this column the
number of Common Shares you wish to tender. Otherwise, all Common
Shares represented by such certificate will be deemed to have been
tendered. See Instruction 4.
The names and addresses of the registered holders should be printed, if not
already printed above, exactly as they appear on the Share Certificates
tendered hereby. The Share Certificate numbers and number of Common Shares
that the undersigned wishes to tender should be indicated in the appropriate
boxes.
<PAGE>
DESCRIPTION OF RIGHTS TENDERED*
(SEE INSTRUCTIONS 2, 3 AND 4)
- -------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(Please fill in, if blank)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
RIGHTS CERTIFICATE(S) TENDERED*
(Attach additional list if necessary.)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL NUMBER OF RIGHTS
REPRESENTED BY NUMBER OF RIGHTS
CERTIFICATE NUMBER(S)** CERTIFICATES** TENDERED***
- -----------------------------------------------------------------------------------
<S> <C> <C>
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
TOTAL RIGHTS:
- -----------------------------------------------------------------------------------
</TABLE>
* Need not be completed if the Distribution Date has not occurred.
** Not required if tender of Rights is made by book-entry transfer. If
the tendered Rights are represented by separate Rights Certificates,
complete using the certificate numbers of such Rights Certificates.
Shareholders tendering Rights which are not represented by separate
certificates, or if such certificates have not been distributed,
will need to submit an additional Letter of Transmittal if Rights
Certificates are distributed. Shareholders tendering Rights that are
not represented by separate certificates should retain a copy of
these instructions in order to accurately complete the Notice of
Guaranteed Delivery if the Distribution Date occurs.
*** If you desire to tender fewer than all Rights represented by any
certificate listed above, please indicate in this column the number
of Rights you wish to tender. Otherwise, all Rights represented by
such certificate will be deemed to have been tendered. See
Instruction 4.
The names and addresses of the registered holders should be printed, if not
already printed above, exactly as they appear on the Rights Certificates
tendered hereby. The Rights Certificate numbers and number of Rights that the
undersigned wishes to tender should be indicated in the appropriate boxes.
3
<PAGE>
NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to DSFA Corporation (the "Purchaser"), a
Delaware corporation and a wholly owned subsidiary of Harnischfeger
Industries, Inc., a Delaware corporation ("Parent"), the above-described
shares of Common Stock, $.10 par value per share (the "Common Shares"), of
Giddings & Lewis, Inc., a Wisconsin corporation (the "Company"), together with
an equal number of associated preferred share purchase rights (the "Rights")
issued pursuant to the Rights Agreement (the "Rights Agreement"), dated as of
August 23, 1995, between the Company and Firstar Trust Company, as rights
agent (the "Rights Agent"), at a price of $19 per Common Share (and associated
Right), net to the seller in cash, without interest thereon (the "Offer
Price"), upon the terms and subject to the conditions set forth in the Offer
to Purchase, receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, as either may be amended from time to time, together
constitute the "Offer"). Unless the context requires otherwise, all references
to Common Shares herein shall include the associated Rights.
Upon the terms and subject to the conditions of the Offer, subject to, and
effective upon, acceptance for payment of the Common Shares and Rights
tendered herewith in accordance with the terms and subject to the 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 the
Common Shares and Rights that are being tendered hereby (and any and all other
Common Shares, Rights or other securities or rights issued or issuable in
respect thereof on or after April 28, 1997 (collectively, "Distributions"))
and irrevocably constitutes and appoints ChaseMellon Shareholder Services,
L.L.C. (the "Depositary"), the true and lawful agent and attorney-in-fact of
the undersigned, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to the full
extent of the undersigned's rights with respect to such Common Shares and
Rights (and any Distributions), to (i) deliver Share Certificates and Rights
Certificates (and any Distributions), or transfer ownership of such Common
Shares and Rights (and any such Distributions) on the account books maintained
by a Book-Entry Transfer Facility together, in any such case, with all
accompanying evidences of transfer and authenticity to, or upon the order of,
the Purchaser, (ii) present such Common Shares and Rights (and any such
Distributions) for transfer on the books of the Company and (iii) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Common Shares and Rights (and any such Distributions), all in accordance with
the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the tendered Common
Shares and Rights (and any Distributions) and, when the same are accepted for
payment by the Purchaser, the Purchaser will acquire good title thereto, free
and clear of all liens, restrictions, claims and encumbrances, and the same
will not be subject to any adverse claim. The undersigned will, upon request,
execute any additional documents deemed by the Depositary or the Purchaser to
be necessary or desirable to complete the sale, assignment and transfer of the
tendered Common Shares and Rights (and any Distributions).
THE UNDERSIGNED UNDERSTANDS THAT, UNLESS THE RIGHTS CONDITION (AS DEFINED IN
THE OFFER TO PURCHASE) IS SATISFIED, SHAREHOLDERS WILL BE REQUIRED TO TENDER
ONE RIGHT FOR EACH COMMON SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF
COMMON SHARES. If the Distribution Date occurs and Rights Certificates are
distributed by the Company or the Rights Agent to holders of Common Shares
prior to the time a holder's Common Shares are tendered pursuant to the Offer,
in order for Rights (and the corresponding Common Shares) to be validly
tendered, Rights Certificates representing a number of Rights equal to the
number of Common Shares tendered must be delivered to the Depositary or, if
available, a Book-Entry Confirmation (as defined in the Offer to Purchase)
received by the Depositary with respect thereto. If the Distribution Date
occurs and Rights Certificates are not distributed prior to the time Common
Shares are tendered pursuant to the Offer, Rights may be tendered prior to a
shareholder receiving Rights Certificates by use of the guaranteed delivery
procedure described in the Offer to Purchase. In any case, a tender of Common
Shares constitutes an agreement by the tendering shareholder to deliver Rights
Certificates representing a number of Rights equal to the number of Common
Shares tendered pursuant to the Offer to the Depositary within three business
days (as defined in the Offer to Purchase) after the date Rights Certificates
are distributed. The Purchaser reserves the right to require that the
Depositary receive Rights Certificates, or a Book-Entry Confirmation, if
available, with respect to such Rights, prior to accepting the related Common
Shares for payment pursuant to the Offer if the Distribution Date occurs prior
to the Expiration Date. Payment for Common Shares accepted for payment
pursuant to the Offer will in all cases be made only after timely receipt by
the Depositary of (a) Share Certificates for (or a timely Book-Entry
Confirmation with respect to) such Common Shares and, if the Distribution Date
occurs, Rights Certificates for (or a timely Book-Entry Confirmation, if
available, with respect to) the associated Rights,
4
<PAGE>
(b) this Letter of Transmittal (or facsimile hereof), 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 this Letter of Transmittal. Accordingly, tendering shareholders may be paid
at different times depending upon when Share Certificates and/or Rights
Certificates, or Book-Entry Confirmations with respect to Common Shares (or
Rights, if available), are actually received by the Depositary.
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall be binding upon the successors, assignees, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
If, on or after April 28, 1997, the Company should declare or pay any cash
dividend on the Common Shares (other than regular quarterly cash dividends in
an amount not to exceed $.03 per Common Share) or other distribution on the
Common Shares, or issue with respect to the Common Shares any additional
Common Shares, shares of any other class of capital stock, other voting
securities or any securities convertible into, or rights, warrants or options,
conditional or otherwise, to acquire, any of the foregoing, payable or
distributable to shareholders of record on a date prior to the transfer of the
Common Shares purchased pursuant to the Offer to the Purchaser or its nominee
or transferee on the Company's stock transfer records, then, subject to the
provisions of Section 14 ("Certain Conditions of the Offer") of the Offer to
Purchase, (i) the Offer Price may, in the sole discretion of the Purchaser, be
reduced by the amount of any such cash dividend or cash distribution and (ii)
the whole of any such noncash dividend, distribution or issuance to be
received by the tendering shareholders will (a) be received and held by the
tendering shareholders for the account of the Purchaser and will be required
to be promptly remitted and transferred by each tendering shareholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer, or (b) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of such
exercise will promptly be remitted to the Purchaser. Pending such remittance
and subject to applicable law, the Purchaser will be entitled to all rights
and privileges as owner of any such noncash dividend, distribution, issuance
or proceeds and may withhold the entire Offer Price or deduct from the Offer
Price the amount or value thereof, as determined by the Purchaser in its sole
discretion.
The undersigned hereby irrevocably appoints Francis M. Corby, Jr. and K.
Thor Lundgren, and each of them, and any other designees of the Purchaser, the
attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to the full extent of the undersigned's rights with respect to
the Common Shares and Rights tendered herewith and accepted for payment by the
Purchaser (and with respect to any and all Distributions). All such powers of
attorney and proxies are irrevocable and are coupled with an interest in the
tendered Common Shares and Rights. This appointment is effective when, and
only to the extent that, the Purchaser accepts such Common Shares and Rights
for payment pursuant to the Offer. Upon such acceptance for payment, all prior
powers of attorney, proxies and consents given by the undersigned with respect
to such Common Shares, Rights and any Distributions will, without further
action, be revoked and no subsequent powers of attorney, proxies, consents or
revocations may be given (and, if given, will not be deemed effective). Each
such attorney-in-fact and proxy appointed hereby is hereby empowered to
exercise all voting and other rights with respect to such Common Shares,
Rights and any Distributions in respect of any annual, special, adjourned or
postponed meeting of the Company's shareholders, actions by written consent in
lieu of any such meeting or otherwise, as each such attorney-in-fact and proxy
in his sole discretion deems proper. The undersigned understands that the
Purchaser reserves the right to require that, in order for Common Shares and
Rights to be deemed validly tendered, immediately upon the Purchaser's
acceptance for payment of such Common Shares and Rights, the Purchaser must be
able to exercise full voting, consent and other rights with respect to such
Common Shares, Rights and other securities or rights, including voting at any
meeting of shareholders.
The undersigned understands that the valid tender of Common Shares and, if
applicable, Rights pursuant to any of the procedures described in Section 2
("Procedures for Tendering Common Shares") of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the
undersigned and the Purchaser upon the terms and subject to the conditions of
the Offer. Without limiting the foregoing, if the price to be paid in the
Offer is amended in accordance with the Offer, the price to be paid to the
undersigned will be the amended price notwithstanding the fact that a
different price is stated on this Letter of Transmittal.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions", please issue the check for the purchase price and/or return any
Share Certificates and/or Rights Certificates not tendered or accepted for
payment in the name(s) of the registered holder(s) appearing above under
"Description of Common Shares Tendered" and "Description of Rights Tendered",
respectively. Similarly, unless otherwise indicated in the box entitled
"Special Delivery Instructions",
5
<PAGE>
please mail the check for the purchase price and/or return any Share
Certificates and/or Rights Certificates not tendered or accepted for payment
(and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing above under "Description of Common Shares
Tendered" and "Description of Rights Tendered", respectively. In the event
that the boxes entitled "Special Payment Instructions" and "Special Delivery
Instruction" are both completed, please issue the check for the purchase price
and/or return any Share Certificates and/or Rights Certificates not tendered
or accepted for payment (and any accompanying documents, as appropriate) in
the name(s) of, and deliver such check and/or return such Share Certificates
and/or Rights Certificates (and any accompanying documents, as appropriate)
to, the person(s) so indicated. Unless otherwise indicated herein in the box
entitled "Special Payment Instructions", please credit any Common Shares and
Rights tendered herewith by book-entry transfer that are not accepted for
payment by crediting the account at the Book-Entry Transfer Facility
designated above. The undersigned recognizes that the Purchaser has no
obligation, pursuant to the Special Payment Instructions, to transfer any
Common Shares or Rights from the name of the registered holder(s) thereof if
the Purchaser does not accept for payment any of the Common Shares or Rights,
respectively, so tendered.
The undersigned understands that the Purchaser reserves the right to
transfer or assign, in whole or in part, from time to time, to Parent, or to
one or more direct or indirect wholly owned subsidiaries of Parent, the right
to purchase Common Shares or Rights tendered pursuant to the Offer, but any
such transfer or assignment will not relieve the Purchaser of its obligations
under the Offer and will in no way prejudice the rights of tendering
shareholders to receive payment for Common Shares or Rights validly tendered
and accepted for payment pursuant to the Offer.
6
<PAGE>
[_]CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING COMMON SHARES AND/OR
RIGHTS THAT YOU OWN HAVE BEEN LOST OR DESTROYED AND SEE INSTRUCTION 9.
Number of Common Shares and/or Rights represented by the lost or
destroyed certificates:__________________________________________________
SPECIAL PAYMENT INSTRUCTIONS (SEE SPECIAL DELIVERY INSTRUCTIONS
INSTRUCTIONS 1, 5, 6, AND 7) (SEE INSTRUCTIONS 1, 4, 5, 6 AND
7)
To be completed ONLY if Share
Certificates and/or Rights Cer- To be completed ONLY if Share
tificates not tendered or not ac- Certificates and/or Rights Cer-
cepted for payment and/or the tificates not tendered or not ac-
check for the purchase price of cepted for payment and/or the
the Common Shares and/or Rights check for the pur- chase price of
accepted for payment are to be the Common Shares and/or Rights
issued in the name of and sent to accepted for payment are to be
someone other than the under- sent to someone other than the
signed, or if Common Shares undersigned, or to the under-
and/or Rights delivered by book- signed at an address other than
entry transfer that are not ac- that shown above.
cepted for payment are to be re-
turned by credit to an account
maintained at a Book-Entry Trans-
fer Facility other than the ac-
count indicated above.
Mail
[_] Check [_] Certificate(s)
To:
__________________________________
NAME (PLEASE PRINT)
Issue __________________________________
[_] Check [_] Certificate(s) ADDRESS
To: __________________________________
ZIP CODE
__________________________________ __________________________________
NAME (PLEASE PRINT) TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NUMBER
__________________________________
ADDRESS
__________________________________
ZIP CODE
__________________________________
TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NUMBER
(ALSO COMPLETE SUBSTITUTE FORM W-
9 BELOW)
Credit unpurchased Common Shares
and/or Rights delivered by book-
entry transfer to the Book-Entry
Transfer Facility account at:
[_] The Depository Trust Company
[_] Philadelphia Depository Trust Company
__________________________________
ACCOUNT NUMBER
7
<PAGE>
SIGN HERE
(AND COMPLETE SUBSTITUTE FORM W-9 BELOW)
X __________________________________________________________________________
X __________________________________________________________________________
SIGNATURE(S) OF HOLDER(S)
Dated: _______________________________
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Share Certificate(s) and/or Rights Certificate(s) or on a security position
listing or by person(s) authorized to become registered holder(s) by Share
Certificates and/or Rights Certificates and documents transmitted herewith.
If a signature is by an officer on behalf of a corporation or by an
executor, administrator, trustee, guardian, attorney-in-fact, agent or
other person acting in a fiduciary or representative capacity, please
provide the following information. See Instructions 1 and 5.)
____________________________________________________________________________
NAME (PLEASE PRINT)
____________________________________________________________________________
CAPACITY (FULL TITLE)
____________________________________________________________________________
ADDRESS
____________________________________________________________________________
ZIP CODE
____________________________________ ____________________________________
(AREA CODE) TELEPHONE NUMBER TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER (COMPLETE
SUBSTITUTE FORM W-9 BELOW)
SIGNATURE GUARANTEE
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
X __________________________________________________________________________
AUTHORIZED SIGNATURE
____________________________________________________________________________
NAME (PLEASE PRINT)
____________________________________ ____________________________________
FULL TITLE NAME OF FIRM
____________________________________________________________________________
ADDRESS
____________________________________________________________________________
ZIP CODE
______________________________________
(AREA CODE) TELEPHONE NUMBER
Dated: _______________________________
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this Letter
of Transmittal (a) if this Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Instruction 1, includes any
participant in any of the Book-Entry Transfer Facilities' systems whose name
appears on a security position listing as the owner of the Common Shares) of
Common Shares and Rights tendered herewith and such registered holder has not
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on this Letter of Transmittal or (b)
if such Common Shares and Rights are tendered for the account of a financial
institution (including most commercial banks, savings and loan associations
and brokerage houses) that is a member in good standing of the Securities
Transfer Agents Medallion Program (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 SHARE CERTIFICATES AND/OR RIGHTS
CERTIFICATES. This Letter of Transmittal is to be used either if Share
Certificates and/or Rights Certificates are to be forwarded herewith or,
unless an Agent's Message (as defined below) is used, if Common Shares and/or
Rights are to be delivered by book-entry transfer pursuant to the procedure
set forth under Section 2 ("Procedures for Tendering Common Shares") in the
Offer to Purchase. For a shareholder validly to tender Common Shares and
Rights pursuant to the Offer, either (a) a properly completed and duly
executed Letter of Transmittal (or facsimile hereof), together with any
required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and any other required documents, must be received by the
Depositary at one of its addresses set forth herein prior to the Expiration
Date and either certificates for tendered Common Shares and Rights must be
received by the Depositary at one of such addresses or such Common Shares and
Rights must be delivered pursuant to the procedures for book-entry transfer
set forth below (and a Book-Entry Confirmation received by the Depositary), in
each case prior to the Expiration Date, or (b) the tendering shareholder must
comply with the guaranteed delivery procedures set forth below and in Section
2 ("Procedures for Tendering Common Shares") in the Offer to Purchase.
UNLESS THE RIGHTS CONDITION IS SATISFIED, SHAREHOLDERS WILL BE REQUIRED TO
TENDER ONE RIGHT FOR EACH COMMON SHARE TENDERED IN ORDER TO EFFECT A VALID
TENDER OF COMMON SHARES. Accordingly, shareholders who sell their Rights
separately from their Common Shares and do not otherwise acquire Rights may
not be able to satisfy the requirements of the Offer for a valid tender of
Common Shares. Unless the Distribution Date occurs, a tender of Common Shares
will also constitute a tender of the associated Rights.
If the Distribution Date occurs and Rights Certificates are distributed by
the Company or the Rights Agent to holders of Common Shares prior to the time
a holder's Common Shares are tendered pursuant to the Offer, in order for
Rights (and the corresponding Common Shares) to be validly tendered, Rights
Certificates representing a number of Rights equal to the number of Common
Shares tendered must be delivered to the Depositary or, if available, a Book-
Entry Confirmation received by the Depositary with respect thereto. If the
Distribution Date occurs and Rights Certificates are not distributed prior to
the time Common Shares are tendered pursuant to the Offer, Rights may be
tendered prior to a shareholder receiving Rights Certificates by use of the
guaranteed delivery procedure described below and in Section 2 ("Procedures
for Tendering Common Shares") in the Offer to Purchase. In any case, a tender
of Common Shares constitutes an agreement by the tendering shareholder to
deliver Rights Certificates representing a number of Rights equal to the
number of Common Shares tendered pursuant to the Offer to the Depositary
within three business days (as defined in the Offer to Purchase) after the
date Rights Certificates are distributed. The Purchaser reserves the right to
require that the Depositary receive Rights Certificates, or a Book-Entry
Confirmation, if available, with respect to such Rights, prior to accepting
the related Common Shares for payment pursuant to the Offer if the
Distribution Date occurs prior to the Expiration Date.
If a shareholder desires to tender Common Shares and Rights pursuant to the
Offer and such shareholder's Share Certificates or Rights Certificates are not
immediately available (including because Rights Certificates have not yet been
distributed by the Rights Agent) or the procedure for book-entry transfer
cannot be completed on a timely basis or time will not permit all required
documents to reach the Depositary prior to the Expiration Date, such
shareholder's tender may be effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in
the form provided by the Purchaser, is received by the Depositary, on or prior
to the Expiration Date, as provided above and in Section 2 ("Procedures for
Tendering Common Shares") in the Offer to Purchase; and (iii) the certificates
representing all tendered Common Shares and/or Rights, in proper form for
transfer (or a Book-Entry Confirmation with respect to all such Common Shares
and/or Rights), together with a properly completed and duly executed Letter of
Transmittal (or facsimile hereof), 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
9
<PAGE>
the Depositary within (a) in the case of Common Shares, three trading days (as
defined in the Offer to Purchase) after the date of execution of such Notice
of Guaranteed Delivery or (b) in the case of Rights, a period ending on the
later of (1) three trading days after the date of execution of such Notice of
Guaranteed Delivery or (2) three business days after the date Rights
Certificates are distributed to shareholders by the Rights Agent.
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 Common Shares that such participant has
received and agrees to be bound by the terms of this Letter of Transmittal and
that the Purchaser may enforce such agreement against such participant.
THE METHOD OF DELIVERY OF COMMON SHARES, RIGHTS, THIS LETTER OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH A BOOK-ENTRY
TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER.
COMMON SHARES, RIGHTS, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS 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.
3. INADEQUATE SPACE. If the space provided above under "Description of Common
Shares Tendered" or "Description of Rights Tendered" is inadequate, the
certificate numbers, the number of Common Shares or Rights represented by such
Share Certificates or Rights Certificates, respectively, and the number of
Common Shares and Rights tendered should be listed on a separate schedule and
attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Common Shares or Rights represented by any
certificate delivered to the Depositary herewith are to be tendered, fill in
the number of Common Shares or Rights that are to be tendered in the box
entitled "Number of Common Shares Tendered" or "Number of Rights Tendered", as
appropriate. In such cases, new certificate(s) representing the remainder of
the Common Shares or Rights that were represented by the old certificate(s)
will be sent to the registered holder, unless otherwise provided in the box
entitled "Special Delivery Instructions" herein, as soon as practicable after
the expiration or termination of the Offer. All Common Shares and Rights
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If this
Letter of Transmittal is signed by the registered holder of the Common Shares
and Rights tendered hereby, the signature must correspond with the name as
written on the face of the certificates without alteration, enlargement or any
other change whatsoever.
If any Common Shares or Rights tendered hereby are owned of record by two or
more persons, all such persons must sign this Letter of Transmittal.
If any of the Common Shares or Rights tendered hereby 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 certificate.
If this Letter of Transmittal or any certificates or stock powers are signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of
a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to 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
Common Shares and Rights listed and transmitted hereby, no endorsements of
certificates or separate stock powers are required unless payment or
certificates for Common Shares or Rights not tendered or accepted for payment
are to be issued to a person other than the registered holder(s). Signatures
on such certificates or stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name of the registered holder(s) appear(s) on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
10
<PAGE>
6. STOCK TRANSFER TAXES. The Purchaser will pay any stock transfer taxes with
respect to the transfer and sale to it or its order pursuant to the Offer,
except as follows: if payment of the purchase price is to be made to, or if
Share Certificates or Rights Certificates not tendered or accepted for payment
are to be registered in the name(s) of, any person(s) other than the
registered holder(s), or if tendered Share Certificates or Rights Certificates
are registered in the name(s) of any person(s) other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder(s) or such person(s)) payable on
account of the transfer to such person(s) will be deducted from the purchase
price unless satisfactory evidence of the payment of such taxes or exemption
therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES OR RIGHTS
CERTIFICATES LISTED ON THIS LETTER OF TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of, and/or Share Certificates or Rights Certificates not accepted for
payment are to be returned to, a person other than the person signing this
Letter of Transmittal or if a check is to be sent and/or such certificates are
to be returned to a person other than the person signing this Letter of
Transmittal or to an address other than that shown above, the appropriate
boxes on this Letter of Transmittal must be completed. Any shareholder(s)
delivering Common Shares or Rights by book-entry transfer may request that
Common Shares or Rights not accepted for payment be credited to such account
maintained at a Book-Entry Transfer Facility as such shareholder may
designate.
8. WAIVER OF CONDITIONS. The Purchaser expressly reserves the right, in its
sole discretion, to waive, in whole or in part, any one or more of the
conditions to the Offer.
9. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Share Certificates or Rights
Certificates have been lost, destroyed or stolen, the shareholder should
promptly notify the Depositary by checking the box immediately preceding the
special payment/special delivery instruction boxes and indicating the number
of Common Shares or Rights lost or destroyed. The shareholder will then be
instructed as to the steps that must be taken in order to replace the Share
Certificates or Rights Certificates. This Letter of Transmittal and related
documents cannot be processed until the procedures for replacing lost,
destroyed or stolen certificates have been followed.
10. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Dealer Manager or Kissel-Blake
Inc. at their respective addresses or telephone numbers set forth below.
Additional copies of the Offer to Purchase, this Letter of Transmittal, the
Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 may be obtained from Kissel-Blake
Inc. at its address and telephone numbers set forth below, and will be
furnished promptly at the Purchaser's expense.
11. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide the
Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 that is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and
that such shareholder is not subject to backup withholding of federal income
tax. If a tendering shareholder has been notified by the Internal Revenue
Service that such shareholder is subject to backup withholding, such
shareholder must cross out item (2) of the Certification box of the Substitute
Form W-9, unless such shareholder has since been notified by the Internal
Revenue Service that such shareholder is no longer subject to backup
withholding. Failure to provide the information on the Substitute Form W-9 may
subject the tendering shareholder to 31% federal income tax withholding on the
payment of the purchase price of all Common Shares and Rights purchased from
such shareholder. If the tendering shareholder has not been issued a TIN and
has applied for one or intends to apply for one in the near future, such
shareholder should write "Applied For" in the space provided for the TIN in
Part I of the Substitute Form W-9, and sign and date the Substitute Form W-9.
If "Applied For" is written in Part I and the Depositary is not provided with
a TIN within 60 days, the Depositary will withhold 31% on all payments of the
purchase price to such shareholder until a TIN is provided to the Depositary.
11
<PAGE>
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), TOGETHER
WITH ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY
TRANSFER, AN AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE
RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION OF THE OFFER, AND
EITHER SHARE CERTIFICATES AND RIGHTS CERTIFICATES FOR TENDERED COMMON
SHARES AND RIGHTS MUST BE RECEIVED BY THE DEPOSITARY OR COMMON SHARES
AND RIGHTS MUST BE DELIVERED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY
TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION DATE OF THE OFFER, OR
THE TENDERING SHAREHOLDER MUST COMPLY WITH THE PROCEDURES FOR
GUARANTEED DELIVERY.
12
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Common Shares
and Rights are accepted for payment is required by law to provide the
Depositary (as payer) with such shareholder's correct TIN on Substitute Form
W-9 below. If such shareholder is an individual, the TIN is such shareholder's
social security number. If the Depositary is not provided with the correct
TIN, the shareholder may be subject to a $50 penalty imposed by the Internal
Revenue Service and payments that are made to such shareholder with respect to
Common Shares and Rights accepted for payment pursuant to the Offer may be
subject to backup withholding of 31%.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a Form W-8, signed under penalties of
perjury, attesting to such individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional
instructions. A shareholder should consult his or her tax advisor as to such
shareholder's qualification for an exemption from backup withholding and the
procedure for obtaining such exemption.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will
be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained from the Internal Revenue
Service.
Purpose of Substitute Form W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Common Shares and Rights purchased pursuant to the Offer, the
shareholder is required to notify the Depositary of such shareholder's correct
TIN by completing the form below certifying that (a) the TIN provided on
Substitute Form W-9 is correct (or that such shareholder is awaiting a TIN)
and (b) that (i) such shareholder has not been notified by the Internal
Revenue Service that such shareholder is subject to backup withholding as a
result of a failure to report all interest or dividends or (ii) the Internal
Revenue Service has notified such shareholder that such shareholder is no
longer subject to backup withholding.
What Number to Give the Depositary
The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Common
Shares and Rights tendered hereby. If the Common Shares are in more than one
name or are not in the name of the actual owner, consult the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional guidance on which number to report. If the tendering
shareholder has not been issued a TIN and has applied for a number or intends
to apply for a number in the near future, the shareholder should write
"Applied For" in the space provided for the TIN in Part I, and sign and date
the Substitute Form W-9 and complete the box entitled "Certificate of Awaiting
Taxpayer Identification Number". If "Applied For" is written in Part I and the
Depositary is not provided with a TIN within 60 days, the Depositary will
withhold 31% of all payments of the purchase price to such shareholder until a
TIN is provided to the Depositary.
13
<PAGE>
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C., AS DEPOSITARY
- -------------------------------------------------------------------------------
PART I--PLEASE PROVIDE SOCIAL SECURITY OR EMPLOYEE
SUBSTITUTE YOUR TIN IN THE BOX AT IDENTIFICATION NUMBER
FORM W-9 RIGHT AND CERTIFY BY
SIGNING AND DATING BELOW. ______________________
------------------------------------------------------------
(If awaiting TIN
write "Applied For")
PART II--For Payees Exempt From Backup Withholding
DEPARTMENT OF THE
TREASURY INTERNAL (See Enclosed Guidelines)
REVENUE SERVICE
-----------------------------------------------------------
CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY
THAT:
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN) AND CERTIFICATION
1. The number shown on this form is my correct Tax-
payer 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 or
dividends, or (c) the 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 the IRS that you are
currently subject to backup withholding because you have
failed to report all interest and dividends on your tax
return. However, if after being notified by the IRS that
you were subject to backup withholding you received
another notification from the IRS stating that you are
no longer subject to backup withholding, do not cross
out such item 2.
Signature: ___________________________ Dated: _________
NOTE: FAILURE TO COMPLETE THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF
ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. IN ADDITION, FAILURE TO
PROVIDE SUCH INFORMATION MAY RESULT IN A PENALTY IMPOSED BY THE INTERNAL
REVENUE SERVICE. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATION IF YOU WROTE "APPLIED FOR"
INSTEAD OF A TIN IN THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all reportable payments made to me will be withheld
until I provide a number, but will be refunded if I provide a certified
taxpayer identification number within 60 days.
Signature: ___________________________ Dated: _________________________
14
<PAGE>
QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE DEALER MANAGER
OR KISSEL-BLAKE INC. AT THEIR RESPECTIVE ADDRESSES OR TELEPHONE NUMBERS SET
FORTH BELOW. Additional copies of the Offer to Purchase, this Letter of
Transmittal and all other tender offer materials may be obtained from the
Information Agents at their respective addresses and telephone numbers set
forth below, and will be furnished promptly at the Purchaser's expense. You may
also contact your broker, dealer, commercial bank, trust company or other
nominee for assistance concerning the Offer.
The Information Agents for the Offer are:
GEORGESON KISSEL BLAKE INC.
& COMPANY INC.
Wall Street Plaza 110 Wall Street
New York, New York 10005 New York, New York 10005
Banks and Brokers Call Collect: Banks and Brokers Call Collect:
(212) 440-9800 (212) 344-6733
ALL OTHERS CALL TOLL-FREE: (800) ALL OTHERS CALL TOLL-FREE: (800) 554-7733
223-2064
The Dealer Manager for the Offer is:
LEHMAN BROTHERS
190 South LaSalle Street
25th Floor
Chicago, Illinois 60603
(312) 609-8526 (Call Collect)
<PAGE>
Exhibit (a)(3)
LEHMAN BROTHERS
190 South LaSalle Street
25th Floor
Chicago, Illinois 60603
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
GIDDINGS & LEWIS, INC.
AT
$19 NET PER SHARE
BY
DSFA CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
HARNISCHFEGER INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MAY 23, 1997, UNLESS THE OFFER IS EXTENDED.
April 28, 1997
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been appointed by DSFA Corporation, a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of Harnischfeger Industries, Inc.,
a Delaware corporation ("Parent"), to act as Dealer Manager in connection with
the Purchaser's offer to purchase, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated April 28, 1997 (the "Offer
to Purchase") and the related Letter of Transmittal (which, as either may be
amended from time to time, together constitute the "Offer"), all outstanding
shares of Common Stock, $.10 par value per share (the "Common Shares"),
together with (unless and until the Purchaser declares that the Rights
Condition (as defined in the Offer to Purchase) is satisfied) the associated
Rights (as defined in the Offer to Purchase), of Giddings & Lewis, Inc., a
Wisconsin corporation (the "Company"), at $19 per Common Share (and associated
Right), net to the seller in cash, without interest thereon. Please furnish
copies of the enclosed materials to those of your clients for whom you hold
Common Shares registered in your name or in the name of your nominee.
UNLESS THE RIGHTS CONDITION (AS DEFINED IN THE OFFER TO PURCHASE) IS
SATISFIED, SHAREHOLDERS WILL BE REQUIRED TO TENDER ONE RIGHT FOR EACH COMMON
SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF COMMON SHARES. UNLESS THE
DISTRIBUTION DATE (AS DEFINED IN THE OFFER TO PURCHASE) OCCURS, A TENDER OF
COMMON SHARES WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT PROPERLY WITHDRAWN A
NUMBER OF COMMON SHARES WHICH, WHEN ADDED TO THE COMMON SHARES BENEFICIALLY
OWNED BY THE PURCHASER AND ITS AFFILIATES, CONSTITUTES AT LEAST A MAJORITY OF
THE TOTAL VOTING POWER OF ALL SHARES OF CAPITAL STOCK OF THE COMPANY
OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE, (2) THE RIGHTS
HAVING BEEN REDEEMED BY THE BOARD OF DIRECTORS OF THE COMPANY OR THE PURCHASER
BEING SATISFIED, IN ITS REASONABLE JUDGMENT, THAT THE RIGHTS HAVE BEEN
INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER
(AS DEFINED IN THE OFFER TO PURCHASE), AND (3) THE PURCHASER BEING SATISFIED,
IN ITS REASONABLE JUDGMENT, THAT THE RESTRICTIONS CONTAINED IN THE WISCONSIN
BUSINESS COMBINATION LAW (AS DEFINED IN THE OFFER TO PURCHASE) WILL NOT APPLY
TO THE ACQUISITION OF COMMON SHARES PURSUANT TO THE OFFER OR THE PROPOSED
MERGER. SEE THE "INTRODUCTION" AND SECTION 14 ("CERTAIN CONDITIONS OF THE
OFFER") AND SECTION 15 ("CERTAIN LEGAL MATTERS") IN THE OFFER TO PURCHASE. THE
OFFER IS NOT CONDITIONED ON THE RECEIPT OF FINANCING.
<PAGE>
For your information and for forwarding to your clients for whom you hold
Common Shares registered in your name or in the name of your nominee, or who
hold Common Shares registered in their own names, we are enclosing the
following documents:
1. Offer to Purchase, dated April 28, 1997;
2. Letter of Transmittal to be used by shareholders in accepting the Offer
and tendering Common Shares and the associated Rights;
3. Notice of Guaranteed Delivery;
4. Letter to Clients which may be sent to your clients for whose accounts
you hold Common Shares in your name or the name of your nominee, with
space provided for obtaining such clients' instructions with regard to
the Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelope addressed to ChaseMellon Shareholder Services, L.L.C.
(the "Depositary").
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, MAY 23, 1997, UNLESS THE OFFER IS
EXTENDED.
In all cases, payment for Common 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 (as defined in the Offer
to Purchase) with respect to) such Common Shares, and, if the Distribution
Date occurs, Rights Certificates for (or a timely Book-Entry Confirmation, if
available, with respect to) the associated Rights, (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 (as defined in the Offer to Purchase), and (c) any other
documents required by the Letter of Transmittal.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Common Shares validly tendered to the
Purchaser and not withdrawn as, if and when the Purchaser gives oral or
written notice to the Depositary of the Purchaser's acceptance for payment of
such Common Shares pursuant to the Offer. Upon the terms and subject to the
conditions of the Offer, payment for Common 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 validly tendering
shareholders for the purpose of receiving payment from the Purchaser and
transmitting payment to tendering shareholders.
The Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Dealer Manager, the Depositary and the
Information Agents, as described under Section 16 ("Fees and Expenses") in the
Offer to Purchase) for soliciting tenders of Common Shares pursuant to the
Offer. The Purchaser will, however, reimburse you for customary clerical and
mailing expenses incurred by you in forwarding any of the enclosed materials
to your clients.
The Purchaser will pay any stock transfer taxes with respect to the transfer
and sale to it or its order pursuant to the Offer, except as otherwise
provided in Instruction 6 of the Letter of Transmittal. Backup tax withholding
at a 31% rate may be required, however, unless the required tax identification
information is provided. See "Important Tax Information" contained in the
Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates for Common Shares and/or Rights representing the
tendered Common Shares and/or Rights should be delivered or such Common Shares
and/or Rights, if available, should be tendered by book-entry transfer, all in
accordance with the Instructions set forth in the Letter of Transmittal and
the Offer to Purchase.
<PAGE>
If holders of Common Shares and/or Rights wish to tender their Common Shares
and/or Rights, but it is impracticable for them to forward their certificates
or other required documents prior to the desired date of tender, a tender may
be effected by following the guaranteed delivery procedure specified under
Section 2 ("Procedures for Tendering Common Shares") in the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed material may be obtained by contacting,
Kissel-Blake Inc. (the "Information Agent") at its address and telephone
numbers set forth on the back cover page of the Offer to Purchase.
Inquiries with respect to the Offer may also be addressed to Lehman Brothers
Inc. at the address and telephone number set forth on the back cover page of
the Offer to Purchase.
Very truly yours,
LEHMAN BROTHERS INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF PARENT, THE PURCHASER, THE DEPOSITARY, THE
INFORMATION AGENTS OR THE DEALER MANAGER, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE>
Exhibit (a)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
GIDDINGS & LEWIS, INC.
AT
$19 NET PER SHARE
BY
DSFA CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
HARNISCHFEGER INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MAY 23, 1997, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are an Offer to Purchase dated April 28,
1997 (the "Offer to Purchase") and the related Letter of Transmittal (which,
as either may be amended from time to time, together constitute the "Offer")
in connection with the offer by DSFA Corporation, a Delaware corporation ("the
Purchaser") and a wholly owned subsidiary of Harnischfeger Industries, Inc., a
Delaware corporation ("Parent"), to purchase, upon the terms and subject to
the conditions of the Offer, all outstanding shares of Common Stock, $.10 par
value per share (the "Common Shares"), together with (unless and until the
Purchaser declares that the Rights Condition (as defined in the Offer to
Purchase) is satisfied) any associated Rights (as defined in the Offer to
Purchase), of Giddings & Lewis, Inc., a Wisconsin corporation (the "Company"),
at $19 per Common Share (and associated Right), net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions of the
Offer.
UNLESS THE RIGHTS CONDITION IS SATISFIED, SHAREHOLDERS WILL BE REQUIRED TO
TENDER ONE RIGHT FOR EACH COMMON SHARE TENDERED IN ORDER TO EFFECT A VALID
TENDER OF COMMON SHARES. UNLESS THE DISTRIBUTION DATE (AS DEFINED IN THE OFFER
TO PURCHASE) OCCURS, A TENDER OF COMMON SHARES WILL ALSO CONSTITUTE A TENDER
OF THE ASSOCIATED RIGHTS.
THE ENCLOSED MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF COMMON
SHARES AND/OR RIGHTS HELD BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR
NAME. WE ARE THE HOLDER OF RECORD OF COMMON SHARES AND/OR RIGHTS HELD BY US
FOR YOUR ACCOUNT. A TENDER OF SUCH COMMON SHARES AND/OR RIGHTS 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 COMMON SHARES AND/OR RIGHTS HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish us to tender on your behalf
any or all of the Common Shares and Rights held by us for your account,
pursuant to the terms and conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender offer price is $19 per Common Share (and associated
Right), net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions of the Offer.
2. The Offer is being made for all outstanding Common Shares together
with any associated Rights.
3. The Offer and withdrawal rights expire at 12:00 midnight, New York
City time, on Friday, May 23, 1997, unless the Offer is extended.
<PAGE>
4. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (A) THERE BEING
VALIDLY TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT
PROPERLY WITHDRAWN A NUMBER OF COMMON SHARES WHICH, WHEN ADDED TO THE
COMMON SHARES BENEFICIALLY OWNED BY THE PURCHASER AND ITS AFFILIATES,
CONSTITUTES AT LEAST A MAJORITY OF THE TOTAL VOTING POWER OF ALL
SHARES OF CAPITAL STOCK OF THE COMPANY OUTSTANDING ON A FULLY DILUTED
BASIS ON THE DATE OF PURCHASE, (B) THE RIGHTS HAVING BEEN REDEEMED BY
THE BOARD OF DIRECTORS OF THE COMPANY OR THE PURCHASER BEING
SATISFIED, IN ITS REASONABLE JUDGMENT, THAT THE RIGHTS HAVE BEEN
INVALIDATED OR ARE OTHERWISE INAPPLICABLE TO THE OFFER AND THE
PROPOSED MERGER (AS DEFINED IN THE OFFER TO PURCHASE), AND (C) THE
PURCHASER BEING SATISFIED, IN ITS REASONABLE JUDGMENT, THAT THE
RESTRICTIONS CONTAINED IN THE WISCONSIN BUSINESS COMBINATION LAW (AS
DEFINED IN THE OFFER TO PURCHASE) WILL NOT APPLY TO THE ACQUISITION
OF COMMON SHARES PURSUANT TO THE OFFER OR THE PROPOSED MERGER. SEE
THE "INTRODUCTION" AND SECTION 14 ("CERTAIN CONDITIONS OF THE OFFER")
AND SECTION 15 ("CERTAIN LEGAL MATTERS") IN THE OFFER TO PURCHASE.
THE OFFER IS NOT CONDITIONED ON THE RECEIPT OF FINANCING.
5. The Purchaser will pay any stock transfer taxes with respect to the
transfer and sale to it or its order pursuant to the Offer, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Backup tax withholding at a 31% rate may be required, however, unless
the required tax identification information is provided. See
"Important Tax Information" contained in the Letter of Transmittal.
If you wish to have us tender any or all of your Common Shares and Rights,
please so instruct us by completing, executing and returning to us the
instruction form contained in this letter. An envelope in which to return your
instructions to us is enclosed. If you authorize the tender of your Common
Shares and Rights, all such Common Shares and Rights will be tendered unless
otherwise specified on the instruction form contained in this letter. PLEASE
FORWARD YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO
TENDER COMMON SHARES AND RIGHTS ON YOUR BEHALF PRIOR TO EXPIRATION OF THE
OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal. The Offer is not being made to (nor will tenders be accepted from
or on behalf of) holders of Common Shares in any jurisdiction in which the
making of the Offer or the acceptance thereof would not be in compliance with
the securities, blue sky or other laws of such jurisdiction. The Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Common Shares in
such jurisdiction. In any jurisdiction where the securities, blue sky or other
laws require the Offer to be made by a licensed broker or dealer, the Offer is
being made on behalf of the Purchaser by Lehman Brothers Inc. or one or more
registered brokers or dealers licensed under the laws of such jurisdictions.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
GIDDINGS & LEWIS, INC.
BY DFSA CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated April 28, 1997 (the "Offer to Purchase") and the related
Letter of Transmittal (which, as either may be amended from time to time,
together constitute the "Offer") in connection with the offer by DSFA
Corporation (the "Purchaser"), a Delaware corporation and a wholly owned
subsidiary of Harnischfeger Industries, Inc., a Delaware corporation
("Parent"), to purchase all the outstanding shares of Common Stock, $.10 par
value per share (the "Common Shares"), together with (unless and until the
Purchaser declares that the Rights Condition (as defined in the Offer to
Purchase) is satisfied) any associated Rights (as defined in the Offer to
Purchase), of Giddings & Lewis, Inc. (the "Company"), at $19 per Common Share
(and associated Right), net to the undersigned in cash, without interest
thereon, upon the terms and subject to the conditions of the Offer.
UNLESS THE RIGHTS CONDITION IS SATISFIED, SHAREHOLDERS WILL BE REQUIRED TO
TENDER ONE RIGHT FOR EACH COMMON SHARE TENDERED IN ORDER TO EFFECT A VALID
TENDER OF COMMON SHARES. UNLESS THE DISTRIBUTION DATE (AS DEFINED IN THE OFFER
TO PURCHASE) OCCURS, A TENDER OF COMMON SHARES WILL ALSO CONSTITUTE A TENDER
OF THE ASSOCIATED RIGHTS.
This will instruct you to tender to the Purchaser on my behalf the number of
Common Shares and Rights indicated below (or if no number is indicated in
either appropriate space below, all Common Shares and Rights) held by you (or
your nominee) for the account of the undersigned, upon the terms and subject
to the conditions set forth in the Offer.
Account Number: _______________________________________________
NUMBER OF COMMON SHARES TO BE TENDERED (check ONE box):
[_] All Common Shares and Rights [_] Common Shares and
Rights
(Unless otherwise indicated, it will be assumed that all the Common Shares and
Rights held for your account are to be tendered)
SIGN HERE
X______________________________________________________________
X______________________________________________________________
Signature(s)
_______________________________________________________________
Name(s) (Please Print)
_______________________________________________________________
Address(es)
_______________________________________________________________
Zip Code
_____________________________ _____________________________
(Area Code) Telephone Number Tax Identification or Social
Security Number(s)
Dated: ______________________
3
<PAGE>
Exhibit (a)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
GIDDINGS & LEWIS, INC.
TO
DSFA CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
HARNISCHFEGER INDUSTRIES, INC.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery (or one substantially in the form hereof)
must be used to accept the Offer (as defined herein) if (i) certificates
("Share Certificates") representing shares of Common Stock, $.10 par value per
share (the "Common Shares"), of Giddings & Lewis, Inc., a Wisconsin
corporation (the "Company") and/or certificates ("Rights Certificates")
representing the associated preferred share purchase rights (the "Rights")
issued pursuant to the Rights Agreement, dated as of August 23, 1995, between
the Company and Firstar Trust Company, as rights agent (the "Rights Agent"),
are not immediately available (including because Rights Certificates have not
yet been distributed by the Rights Agent), (ii) the procedure for book-entry
transfer, as set forth in the Offer to Purchase (as defined below), cannot be
completed on a timely basis or (iii) time will not permit all required
documents to reach ChaseMellon Shareholder Services, L.L.C. (the "Depositary")
prior to the Expiration Date (as defined in the Offer to Purchase). This
Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary. See Section 2
("Procedures for Tendering Common Shares") in the Offer to Purchase.
To The Depositary:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
BY MAIL: BY FACSIMILE TRANSMISSION: BY HAND/BY OVERNIGHT
ChaseMellon Shareholder DELIVERY:
Services, L.L.C.
(FOR ELIGIBLE INSTITUTIONS ONLY)
(201) 329-8936 ChaseMellon Shareholder
Reorganization CONFIRM BY TELEPHONE: Services, L.L.C.
Department (201) 296-4860 Reorganization
P.O. Box 3301 Department
South Hackensack, New 120 Broadway
Jersey 07606 13th Floor
New York, New York 10271
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER
OTHER THAN AS LISTED ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNA-
TURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED
BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE
GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON
THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to DSFA Corporation, a Delaware corporation
and a wholly owned subsidiary of Harnischfeger Industries, Inc., a Delaware
corporation, upon the terms and conditions set forth in the Offer to Purchase
dated April 28, 1997 (the "Offer to Purchase") and the related Letter of
Transmittal (which, as either may be amended from time to time, together
constitute the "Offer"), receipt of each of which is hereby acknowledged, the
number of Common Shares and/or Rights indicated below pursuant to the
guaranteed delivery procedures set forth in Section 2 ("Procedures for
Tendering Common Shares") in the Offer to Purchase:
- ------------------------------------- -------------------------------------
NAME(S) OF RECORD HOLDER(S) NUMBER OF COMMON SHARES (IF RIGHTS,
- ------------------------------------- SO INDICATE)
- -------------------------------------
ADDRESS(ES) -------------------------------------
CERTIFICATE NOS. (IF AVAILABLE)
[_]The Depository Trust Company
- -------------------------------------
ZIP CODE Check box (and indicate account
number) if Common Shares or Rights
will be tendered by book-entry
transfer effected by:
[_]Philadelphia Depository Trust
Company
- -------------------------------------
(AREA CODE) TELEPHONE NUMBER -------------------------------------
ACCOUNT NUMBER
X
------------------------------------ Dated:
SIGNATURE(S) OF RECORD HOLDER(S) --------------------------------
X Dated:
------------------------------------ --------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, an entity that is a member in good standing of the
Securities Transfer Agents Medallion Program (an "Eligible Institution"),
hereby (a) represents that the tender of Common Shares and/or Rights effected
hereby complies with Rule 14e-4 under the Securities Exchange Act of 1934, as
amended, and (b) guarantees delivery to the Depositary, at one of its
addresses set forth above, of Share Certificates and/or Rights Certificates
tendered hereby, in proper form for transfer, or confirmation of the book-
entry transfer of such Common Shares and/or Rights into the Depositary's
account at The Depository Trust Company or the Philadelphia Depository Trust
Company, in either case together with delivery of a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantee, or, in the case of book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase), and any other documents
required by the Letter of Transmittal, (i) in the case of Common Shares,
within three trading days (as defined in the Offer to Purchase) after the date
of execution of this Notice of Guaranteed Delivery or (ii) in the case of
Rights, within a period ending on the later of (1) three trading days after
the date of execution of this Notice of Guaranteed Delivery or (2) three
business days (as defined in the Offer to Purchase) after the date Rights
Certificates are distributed to shareholders by the Rights Agent.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
Share Certificates to the Depositary within the time period indicated herein.
Failure to do so could result in financial loss to such Eligible Institution.
- ------------------------------------- X------------------------------------
NAME OF FIRM AUTHORIZED SIGNATURE
- ------------------------------------- -------------------------------------
ADDRESS NAME (PLEASE PRINT)
- ------------------------------------- -------------------------------------
ZIP CODE TITLE
- ------------------------------------- Dated:
--------------------------------
(AREA CODE) TELEPHONE NUMBER
NOTE: DO NOT SEND SHARE CERTIFICATES OR RIGHTS CERTIFICATES WITH THIS NOTICE.
SHARE CERTIFICATES AND RIGHTS CERTIFICATES SHOULD BE SENT
WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
Exhibit (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF --
- --------------------------------------------------------------------------------
<S> <C>
1. Individual The individual
2. Two or more individuals (joint account) The actual owner
of the account
or, if combined
funds, the first
individual on
the account(1)
3. Custodian account of a minor (Uniform Gift to Minors Act) The minor(2)
4. a The usual revocable savings trust The grantor-
account (grantor is also trustee) trustee(1)
b So-called trust account that is not a legal or valid The actual
trust under State law owner(1)
5. Sole proprietorship The owner(3)
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF --
- ------------------------------------------------------------------------------
<S> <C>
6. Sole proprietorship The owner(3)
7. A valid trust, estate, or pension trust The legal
entity(4)
8. Corporate The corporation
9. Association, club, religious, charitable, educational, The organization
or other tax-exempt organization account
10. Partnership The partnership
11. A broker or registered nominee The broker or
nominee
12. Account with the Department of Agriculture in the name The public
of a public entity (such as a State or local government, entity
school district, or prison) that receives agricultural
program payments
</TABLE>
- -------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business
or "doing business as" name. You may use either your social security
number or your employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your num-
ber, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of
the Social Security Administration or the Internal Revenue Service and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding include the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), an individual retire-
ment plan or a custodial account under section 403(b)(7) if the account
satisfies the requirements of section 401(f)(2).
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any political subdivision or instrumentality thereof.
. A foreign government or any political subdivision, agency or instrumental-
ity thereof.
. An international organization or any agency or instrumentality thereof.
. A dealer in securities or commodities registered in the U.S. or a posses-
sion of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a)
. An entity registered at all times during the tax year under the Investment
Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident alien partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Section 404(k) payments made by an ESOP.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Mortgage interest paid to you.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDEN-
TIFICATION NUMBER, WRITE "EXEMPT" IN PART II OF THE FORM, AND RETURN IT TO THE
PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.-- Section 6109 requires most recipients of dividend, in-
terest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are re-
quired to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Cer-
tain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your taxpayer identification number to a payer, you are sub-
ject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or pat-
ronage dividends in gross income, such failure will be treated as being due to
negligence and will be subject to a penalty of 5% on any portion of an under-
payment attributable to that failure unless there is clear and convincing evi-
dence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying certi-
fications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
Exhibit (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Common Shares or Rights. The Offer is made solely by the
Offer to Purchase dated April 28, 1997 and the related Letter of
Transmittal The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Common Shares or Rights
in any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction.
The Purchaser may, in its discretion, take such action
as it may deem necessary to make the Offer in any
jurisdiction and extend the Offer to holders of
Common Shares and Rights in such jurisdiction.
In any jurisdiction where the securities,
blue sky or other laws require the Offer to
be made by a licensed broker or dealer,
the Offer is being made on behalf of
the Purchaser by Lehman Brothers Inc.
or one or more registered brokers or
dealers licensed under the laws of
such jurisdictions.
Notice of Offer to Purchase for Cash All Outstanding Shares of Common Stock
(including the associated preferred share purchase rights)
of
GIDDINGS & LEWIS, INC.
at
$19 Net Per Share
by
DSFA CORPORATION
a wholly owned subsidiary of
HARNISCHFEGER INDUSTRIES, INC.
DSFA Corporation (the "Purchaser"), a Delaware corporation and a wholly owned
subsidiary of Harnischfeger Industries, Inc., a Delaware corporation
("Parent"), is offering to purchase all outstanding shares of Common Stock,
$.10 par value per share (the "Common Shares"), together with any associated
preferred share purchase rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of August 23, 1995, between Giddings & Lewis, Inc., a
Wisconsin corporation (the "Company"), and Firstar Trust Company, as rights
agent, of the Company, at a price of $19 per Common Share (and associated
Right), net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated April
28, 1997 (the "Offer to Purchase") and the related Letter of Transmittal
(which, as either may be amended from time to time, together constitute the
"Offer"). Unless the context otherwise requires, all references to Common
Shares shall include the Rights.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, MAY 23, 1997, UNLESS THE OFFER IS EXTENDED.
Unless the Rights are redeemed by the Board of Directors of the Company or
the Purchaser is satisfied, in its reasonable judgment, that the Rights have
been invalidated or are otherwise inapplicable to the Offer and the Proposed
Merger (as defined below), shareholders are required to tender one Right for
each Common Share tendered in order to effect a valid tender of Common Shares
in accordance with the procedures set forth in Section 2 of the Offer to
Purchase. Unless the Distribution Date (as defined in the Offer to Purchase)
occurs prior to the Expiration Date (as defined in the Offer to Purchase), a
tender of Common Shares will also constitute a tender of the associated
Rights.
The Offer is conditioned upon, among other things, (1) there being validly
tendered prior to the expiration of the Offer and not properly withdrawn a
number of Common Shares, which, when added to the Common Shares beneficially
owned by the Purchaser and its affiliates, constitutes at least a majority of
the total voting power of all shares of capital stock of the Company
outstanding on a fully diluted basis on the date of purchase, (2) the Rights
having been redeemed by the Board of Directors of the Company or the Purchaser
being satisfied, in its reasonable judgment, that the Rights have been
invalidated or are otherwise inapplicable to the Offer and the Proposed
Merger, and (3) the Purchaser being satisfied, in its reasonable judgment,
that the restrictions contained in Section 180.1141 of the Wisconsin Business
Corporation Law (the "WBCL") will not apply to the acquisition of Common
Shares pursuant to the Offer or to the Proposed Merger. The Offer is not
conditioned on the receipt of financing.
The purpose of the Offer and the Proposed Merger is to enable the Parent
to acquire control of, and the entire equity interest in, the Company. Parent
and the Purchaser have also proposed that, following the consummation of the
Offer, the Purchaser would effect a merger or similar business combination
with the Company (the "Proposed Merger"), pursuant to which each then
outstanding Common Share (excluding Common Shares owned by the Purchaser or
Parent, Common Shares held in the treasury of the Company and Common Shares
owned by shareholders who perfect dissenters' rights under the WBCL, if any),
would be converted into the right to receive an amount in cash equal to the
price paid per Common Share pursuant to the Offer, and the Company would become
a wholly owned subsidiary of Parent. The Offer, as the first step in the
acquisition of the Company, is intended to facilitate the acquisition of all
outstanding Common Shares. The Proposed Merger, as the second step in the
acquisition of the Company, is intended to facilitate the acquisition of any
Common Shares not acquired by the Purchaser in the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Common Shares and Rights validly tendered to
the Purchaser and not withdrawn as, if and when the Purchaser gives oral or
written notice to ChaseMellon Shareholder Services, L.L.C. (the "Depositary")
of the Purchaser's acceptance for payment of such Common Shares and Rights
pursuant to the Offer. Upon the terms and subject to the conditions of the
Offer, payment for Common Shares and Rights 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 validly tendering shareholders for the
purpose of receiving payment from the Purchaser and transmitting payment to
tendering shareholders. Under no circumstances will interest be paid on the
purchase price of the Common Shares and Rights to be paid by the Purchaser,
regardless of any extension of the Offer or delay in making such payment. In
all cases, payment for Common 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 (as defined in the Offer
to Purchase) with respect to) such Common Shares, and, if the Distribution
Date occurs, certificates for (or a timely Book-Entry Confirmation with
respect to) the associated Rights, (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 (as
defined in the Offer to Purchase), and (c) any other documents required by the
Letter of Transmittal.
Except as otherwise provided below, tenders of Common Shares and Rights
pursuant to the Offer are irrevocable. Common Shares and Rights tendered
pursuant to the Offer may be withdrawn pursuant to the procedures set forth
under Section 3 of the Offer to Purchase at any time prior to 12:00 midnight,
New York City time, on Friday, May 23, 1997 and, unless theretofore accepted
for payment by the Purchaser pursuant to the Offer, may also be withdrawn at
any time after June 26, 1997. If the Purchaser extends the Offer, is delayed
in its acceptance for payment of Common Shares and Rights or is unable to
purchase Common Shares
<PAGE>
and Rights 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 Common Shares and
Rights and such Common Shares and Rights may not be withdrawn except to the
extent that tendering shareholders are entitled to withdrawal rights as
described in Section 3 of the Offer to Purchase. Any such delay will be
accompanied by an extension of the Offer to the extent required by law. Common
Shares or Rights may not be withdrawn unless the associated Rights or Common
Shares, as the case may be, are also withdrawn. A withdrawal of Common Shares
or Rights will also constitute a withdrawal of the associated Rights or Common
Shares, as the case may be.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of the Offer to Purchase and
must specify the name of the person having tendered the Common Shares and
Rights to be withdrawn, the number of Common Shares and Rights to be withdrawn
and the name of the registered holder of the Common Shares and Rights to be
withdrawn, if different from the name of the person who tendered the Common
Shares and Rights. If certificates for Common Shares or Rights have been
delivered or otherwise identified to the Depositary, then, prior to the
physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and, unless such Common
Shares or Rights have been tendered by an Eligible Institution (as defined in
the Offer to Purchase), the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Common Shares or Rights have been
delivered pursuant to the procedure for book-entry transfer as set forth in
Section 2 of the Offer to Purchase, any notice of withdrawal must also specify
the name and number of the account at the appropriate Book-Entry Transfer
Facility (as defined in the Offer to Purchase) to be credited with the
withdrawn Common Shares or Rights and otherwise comply with such Book-Entry
Transfer Facility's procedures. Withdrawals of tenders of Common Shares or
Rights may not be rescinded, and any Common Shares or Rights properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. Withdrawn Common Shares and Rights, however, may be retendered by again
following one of the procedures described in Section 2 of the Offer to
Purchase at any time on or prior to the Expiration Date. All questions as to
the form and validity (including time of receipt) of notices of withdrawal
will be determined by the Purchaser, in its sole discretion, whose
determination will be final and binding on all parties. None of the Purchaser,
Parent, any of their affiliates or assigns, the Depositary, the Information
Agents, 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.
Subject to the applicable rules and regulations of the U.S. Securities and
Exchange Commission, the Purchaser reserves the right, in its sole discretion,
at any time and from time to time, and regardless of whether or not any of the
events set forth in Section 14 of the Offer to Purchase shall have occurred or
shall have been determined by the Purchaser to have occurred, to (a) extend
the period of time during which the Offer is open, and thereby delay
acceptance for payment of and the payment for any Common Shares, by giving
oral or written notice of such extension and delay to the Depositary and (b)
waive any condition or amend the Offer in any other respect by giving oral or
written notice of such waiver or amendment to the Depositary. In the case of
an extension, Rule 14e-1(d) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), requires that announcement of such extension 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.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Exchange Act, as amended, is contained
in the Offer to Purchase and is incorporated herein by reference.
Requests are being made to the Company for the use of the Company's
shareholder lists and security position listings for the purpose of, among
other things, disseminating the Offer to holders of Common Shares. The Offer
to Purchase, the related Letter of Transmittal and other relevant materials
will be mailed to record holders of Common 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 shareholder lists, or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Common
Shares, by the Purchaser following receipt of such lists or listings from the
Company, or by the Company if it so elects.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to Lehman Brothers
Inc., the Dealer Manager, or to Georgeson & Company Inc. and Kissel-Blake
Inc., the Information Agents, at their respective addresses and telephone
numbers set forth below. Additional copies of the Offer to Purchase, the
Letter of Transmittal, the Notice of Guaranteed Delivery and other related
materials may be obtained from the Information Agents or from brokers,
dealers, commercial banks and trust companies, and will be furnished promptly
at the Purchaser's expense.
The Information Agents for the Offer are:
GEORGESON
& COMPANY INC. KISSELL BLAKE INC
110 Wall Street
Wall Street Plaza New York, New York 10005
New York, New York 10005 Banks and Brokers Call: (212) 344-6733
Banks and Brokers Call All Others Call Toll-Free: (800) 554-7733
Collect: (212) 440-9800
All Others Call Toll Free:
(800) 223-2064
The Dealer Manager for the Offer is:
LEHMAN BROTHERS
190 South LaSalle Street
25th Floor
Chicago, Illinois 60603
(312) 609-8525 (Call Collect)
April 28, 1997
<PAGE>
Exhibit (a)(8)
HARNISCHFEGER ANNOUNCES $19 PER SHARE CASH TENDER OFFER
FOR ALL SHARES OF GIDDINGS & LEWIS, INC. IN A
TRANSACTION VALUED AT $747 MILLION
MILWAUKEE, April 25, 1997 -- Harnischfeger Industries, Inc.
(NYSE: HPH) announced today that it will commence an all-cash
tender offer for all shares of Giddings & Lewis, Inc. (Nasdaq:
GIDL) at a price of $19 per share. The offer was communicated
today in a letter from Jeffery T. Grade, chairman and chief
executive officer of Harnischfeger, to Marvin L. Isles, presi-
dent and chief executive officer of Giddings & Lewis ("G & L").
The Harnischfeger offer has a total transaction value of
approximately $747 million, based on the approximately 33.2
million shares of G & L stock currently outstanding and the
assumption of G & L debt, and represents a premium of approxi-
mately 40% over today's G & L closing price of $13.625 per
share. The transaction would create an enterprise with com-
bined 1996 revenues of $3.6 billion with leadership positions
in mining equipment, pulp and papermaking machinery, and indus-
trial products and services ("IP&S"). The IP&S group will be
comprised of Harnischfeger's material handling business and
G & L.
<PAGE>
Following is the complete text of Mr. Grade's letter to
Mr. Isles:
April 25, 1997
Mr. Marvin L. Isles
President and Chief Executive Officer
Giddings & Lewis, Inc.
P.O. Box 590
142 Doty Street
Fond du Lac, Wisconsin 54936-0590
Dear Marvin:
I appreciated the opportunity to discuss with you over the last
week Harnischfeger's vision of combining our two companies on a
basis that would maximize the value of Giddings & Lewis, Inc.
for all G & L shareholders and bring significant strategic,
operational and financial benefits to the shareholders, custom-
ers, suppliers, business partners and employees of the combined
enterprise.
As I indicated during our discussions, Harnischfeger views
G & L as a company with significant strengths--a manufacturer
of highly engineered, custom-designed machine tools and indus-
trial automation products with strong positions in general man-
ufacturing markets ranging from small job shops to the world's
largest automakers, and with a long-standing reputation for
customer service and aftermarket support.
We believe that as part of Harnischfeger, with access to our
strategic, operational and financial resources, the combination
of G & L and our existing complementary material handling busi-
ness will make an excellent platform from which to implement
our Industrial Products & Services (IP&S) strategy. As we dis-
cussed, that strategy--formally endorsed by our Board of
Directors--is to leverage Harnischfeger's proven skills in
"life-cycle management," which have helped our customers in the
mining and papermaking industries improve their operating ef-
ficiency, capacity utilization rates and profitability, by
applying those skills to the industrial workplace generally.
In light of the strategic fit between our two companies, with
which you concurred, and of our belief that many G & L share-
holders would strongly favor the transaction we propose, we had
hoped you would recognize and acknowledge the merits of that
transaction and agree to enter into immediate meaningful dis-
cussions leading to a definitive merger agreement. Instead, we
interpret your response as a rejection of our good faith pro-
posal.
<PAGE>
Faced with that response, and having thoroughly evaluated the
business combination we are proposing based on public informa-
tion, we have decided that the best interests of the sharehold-
ers, customers, suppliers, business partners and employees of
both companies, and of our communities and other constituen-
cies, would be served by taking our offer directly to your
shareholders. Accordingly, Harnischfeger is offering to
acquire all Giddings & Lewis shares outstanding in a transac-
tion in which G & L shareholders would receive $19, in cash,
for each of their G & L shares.
In considering this offer, you should bear in mind the follow-
ing:
. The $19 per share offer price represents a premium of ap-
proximately 40% over G & L's current market price. We are
a shareholder of G & L and we believe that G & L cannot,
on its own, achieve the value we are offering. We also
believe G & L's shareholder base will be highly receptive
to a cash transaction that offers them immediate cash
realization of a premium price for their G & L shares.
. Harnischfeger, like G & L, is based in Wisconsin. Consis-
tent with our deep and long-standing commitment to our
state and region, Harnischfeger believes the proposed
transaction will provide significant employment and growth
opportunities for G & L over time.
. Harnischfeger is also the ideal partner for G & L because
the combination of the two companies will unite G & L with
a company that has consistently demonstrated its ability
to successfully integrate strategic acquisitions, manage
product transitions, meet the evolving needs of its cus-
tomers, grow its business, and build value for its share-
holders, customers, suppliers, business partners,
employees and communities. Indeed, once written off as a
"Rust Belt" company that could not possibly measure up
against its international competitors, Harnischfeger today
is a global leader whose dramatic growth and operational
and financial success vividly demonstrate the competitive-
ness, skill and determination of American industry.
We would still prefer to work with you and your board towards
the prompt consummation of a negotiated transaction. Our offer
is not subject to financing or any other significant contingen-
cies other than removal of your takeover defenses. In that
regard, we are taking steps to elect directors who will remove
these impediments to our offer if the incumbent board fails to
do so. We are confident that G & L shareholders will be sup-
portive of these efforts.
-2-
<PAGE>
We firmly believe that this combination will be in the best
interests of both Harnischfeger's and G & L's shareholders and
their respective other constituencies, and are committed to
making this combination a reality.
Sincerely,
Jeffery T. Grade
cc: Members of the Board of Directors of Giddings & Lewis,
Inc.
# # #
The foundation for the IP&S group is life-cycle management, a
strategy Harnischfeger is successfully implementing in the min-
ing and papermaking industries, and one that helps industrial
customers improve their operational and financial performance.
Through an integrated approach that recognizes the importance
of maintenance, service and support at every stage of complex
industrial processes, life-cycle management can significantly
enhance asset utilization, minimize work-in-process, and reduce
production cost per unit of output.
Lehman Brothers Inc. is acting as Dealer Manager for the tender
offer and financial advisor to Harnischfeger in connection with
the transaction.
Harnischfeger Industries, Inc. is an international holding com-
pany with business segments involved in the manufacture and
distribution of equipment for underground mining (Joy Mining
-3-
<PAGE>
Machinery), surface mining (P&H Mining Equipment), pulp and
papermaking (Beloit Corporation), and material handling (P&H
Material Handling).
# # #
-4-
<PAGE>
Exhibit (a)(9)
HARNISCHFEGER COMMENCES $19 PER SHARE ALL-CASH
TENDER OFFER FOR GIDDINGS & LEWIS
MILWAUKEE, April 28, 1997 -- Harnischfeger Industries, Inc. (NYSE: HPH)
today commenced its all-cash tender offer announced Friday, April 25,
for all shares of Giddings & Lewis, Inc. (Nasdaq: GIDL) at a price of
$19 per share.
Tender offer materials are being filed with the U.S. Securities
and Exchange Commission and will be sent to holders of G & L
shares.
The tender offer and withdrawal rights will expire at 12:00 midnight
on May 23, 1997, unless extended.
# # #
Harnischfeger Industries, Inc. (NYSE: HPH) is an international holding
com-pany with business segments involved in the manufacture and
distribution of equipment for underground mining (Joy Mining
Machinery), surface mining (P&H Mining Equipment), pulp and papermaking
(Beloit Corporation), and material handling (P&H Material Handling).
<PAGE>
Exhibit (b)(1)
[Letterhead of Chase Securities]
CHASE SECURITIES INC.
270 Park Avenue
New York, New York 10017
THE CHASE MANHATTAN BANK
270 Park Avenue
New York, New York 10017
April 21, 1997
Francis M. Corby, Jr.
Executive Vice President
Harnischfeger Industries, Inc.
P.O. Box 554
Milwaukee, WI 53201
Re: Harnischfeger Industries, Inc.
$1,000,000,000 Credit Facilities
--------------------------------
Dear Mr. Corby:
Harnischfeger Industries, Inc. ("Harnischfeger") has advised The Chase Manhattan
-------------
Bank ("Chase") and Chase Securities Inc. ("CSI") that Harnischfeger proposes,
----- ---
through a wholly-owned subsidiary ("Acquisition Corp."), to acquire Giddings &
-----------------
Lewis, Inc., a Wisconsin corporation ("Target").
------
Chase and CSI understand Harnischfeger proposes that the acquisition of Target
will be made by a cash tender offer (the "Tender Offer") followed by a merger of
------------
Acquisition Corp. with and into Target (the "Merger").
------
You have further advised us that in order to finance the Tender Offer and the
Merger, to refinance certain indebtedness of Harnischfeger and its subsidiaries
and Target and its
<PAGE>
2
subsidiaries and for working capital and general corporate purposes,
Harnischfeger will require unsecured credit facilities (the "Facilities") of up
----------
to $1,000,000,000.
You have requested CSI to arrange and Chase to provide the Facilities. CSI and
Chase are pleased to advise you that CSI is willing to act as exclusive
syndication agent and exclusive advisor and arranger for the Facilities, and
Chase hereby commits to provide the entire amount of the Facilities and to act
as exclusive administrative agent and exclusive documentation agent in respect
thereof. Attached hereto as Exhibit A is a Summary of Terms and Conditions (the
---------
"Term Sheet"; and together with this letter, the "Commitment") setting forth the
---------- ----------
principal terms and conditions pursuant and subject to which Chase is committing
to make available the Facilities.
Although Chase is committing to provide the entire amount of the Facilities, we
intend to syndicate the Facilities to a group of financial institutions
(together with Chase, the "Lenders") mutually satisfactory to Chase and you.
-------
CSI intends to commence syndication efforts immediately following the execution
and delivery of the Commitment, and you agree actively to assist CSI in
completing a satisfactory syndication. Such assistance shall include (i)
Harnischfeger using commercially reasonable efforts to ensure that the
syndication efforts benefit materially from the existing lending relationships
of Target (to the extent practicable) and you, (ii) direct contact between
Harnischfeger's and Target's (to the extent practicable) senior management and
advisors and the proposed Lenders, (iii) your preparing with our assistance a
Confidential Information Memorandum and other marketing materials to be used in
connection with the syndication and (iv) the hosting, with CSI, of one or more
meetings of prospective Lenders. Communications with Target, if any, will, of
course, be directed through you and your advisors. CSI understands and agrees
that contacts with Target may not be practicable.
CSI, in consultation with Harnischfeger, will manage all aspects of the
syndication of the Facilities, including in making decisions as to the selection
of institutions to be approached and when they will be approached, when their
commitments will be accepted, which institutions will participate, the
allocations of the commitments among the Lenders and the amount and distribution
of fees among the Lenders. CSI understands, however, that the composition of
the Lender group and other issues related to the syndication are important to
you; we will work with you to the extent possible to achieve a syndication that
satisfies your corporate objectives. Additional agents or co-agents will be
appointed subject to the approval of CSI, Chase and Harnischfeger. It is agreed
that no Lender will receive compensation outside the terms contained herein, in
the Term Sheet and in the Fee Letter referred to below in order to obtain its
commitment to participate in the Facilities. To assist CSI in its syndication
efforts, you agree promptly to prepare and provide to CSI and Chase all
information with respect to Harnischfeger and Acquisition Corp., the Merger and
the other transactions contemplated hereby, including all financial statements
and projections (the "Projections"), as we may reasonably request in connection
-----------
with the arrangement and syndication of the Facilities. You hereby represent
and covenant that (a) all written information and data concerning Harnischfeger,
its subsidiaries and the transaction contemplated hereby other than the
Projections (the "Information") that is or has been made available by you or any
-----------
of your authorized representatives in connection with the transaction
contemplated hereby is and will be complete
<PAGE>
3
and correct in all material respects as of the respective dates thereof and does
not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such
statements are made and (b) the Projections that have been or will be made
available to Chase or CSI by you or any of your authorized representatives have
been or will be prepared in good faith based upon reasonable assumptions. In
arranging the Facilities, Chase and CSI will be using and relying on the
Information and the Projections without independent verification thereof.
As consideration for Chase's commitment hereunder and CSI's agreement to perform
the services described herein, you agree to pay to Chase the fees set forth in
the Fee Letter dated the date hereof and delivered herewith (the "Fee Letter").
----------
Once paid, such fees shall not be refundable under any circumstances.
Chase's commitment to provide financing hereunder is subject to the negotiation,
execution and delivery of appropriate credit agreements (collectively and
individually, "Credit Agreement") and other definitive documents (collectively,
----------------
including the Credit Agreement, the "Loan Documents") which are yet to be
--------------
negotiated and must be based upon and substantially consistent with the Term
Sheet. The terms and conditions of Chase's commitment hereunder are not limited
to those set forth in the Commitment. Those matters that are not covered by the
provisions of the Commitment are subject to the approval and agreement of Chase,
CSI and you.
Chase's commitment hereunder and CSI's agreement to perform the services
described herein are also subject to (i) since the date of the most recent
audited financial statements of Harnischfeger or Target, there not occurring or
becoming known to us any material adverse condition or material adverse change
in or affecting the business, operations, property, condition (financial or
otherwise) or prospects of Harnischfeger or Target and their respective
subsidiaries taken as a whole, (ii) our not becoming aware after the date hereof
of any information or other matter affecting Harnischfeger or the transactions
contemplated hereby which is inconsistent in a material and adverse manner with
any such information or other matter disclosed to us prior to the date hereof,
(iii) there not having occurred and continuing to exist a material disruption of
or material adverse change in financial, banking or capital market conditions
that, in our reasonable judgment, would be expected to materially impair the
satisfactory syndication of the Facilities and (iv) a clear market shall have
been given, at the time of syndication, such that Harnischfeger will not be in
the financial markets to obtain additional financing (other than in respect of
an Australian dollar financing identified to Chase) or to amend and/or obtain
waiver provisions in existing financing agreements for borrowed money. It is
understood that a filing of a universal shelf registration statement and
takedowns thereunder in the public securities market are permitted under the
clear market condition, so long as reasonable advance notice thereof is given to
Chase and CSI.
This Commitment is further based upon and subject to the accuracy and
completeness of the information concerning Target that is publicly available.
<PAGE>
4
This Commitment shall become effective only upon the written acceptance of this
letter and the Fee Letter together with payment of the sum required pursuant to
the Fee Letter to be paid upon such acceptance.
By executing this letter agreement, you agree to (i) indemnify and hold harmless
Chase, CSI and their respective officers, directors, employees, affiliates,
agents and controlling persons from and against any and all losses, claims,
damages and liabilities to which any such person may become subject arising out
of the Tender Offer, the Merger, the Commitment in respect of the Tender Offer
Loan (as defined in the Term Sheet) or the Tender Offer Loan, regardless of
whether any of such indemnified parties is a party thereto, and to reimburse
each such indemnified parties upon demand for any reasonable and necessary legal
or other expenses incurred in connection with investigating or defending any of
the foregoing, provided, however, that the foregoing indemnity will not, as to
--------
any indemnified party, apply to losses, claims, damages, liabilities or related
expenses to the extent they arise from the willful misconduct or gross
negligence of any indemnified party, and (ii) to pay or reimburse Chase, CSI and
their affiliates on demand for all costs and expenses (including all reasonable
and necessary fees and disbursements of Simpson Thacher & Bartlett, or any other
counsel to Chase and CSI) arising in connection with the preparation, execution
and delivery of this Commitment, the conditions precedent to and funding of
loans under the Facilities, whether or not any of the transactions contemplated
hereby are consummated. You further agree to indemnify and hold harmless such
indemnified parties from and against any and all losses, claims, damages and
liabilities arising out of the Commitment or the execution, delivery,
enforcement and performance, or consummation, of the Loan Documents and the
Loans, to the extent the same do not arise out of the Tender Offer, the Merger,
the Commitment in respect of the Tender Offer Loan or the Tender Offer Loan in
the same manner, and subject to the same requirements and limitations, as
provided for in the existing Harnischfeger credit agreement. Harnischfeger has
advised Chase and CSI that it expects that the fees and disbursements of counsel
will be reasonable and typical and that the scope and nature of the legal
services requested by Chase will be only as are appropriate under the
circumstances. As requested by Harnischfeger, counsel to Chase and CSI will
provide timely and customarily detailed reports on accrued fees and expenses and
discuss with Harnischfeger the nature of the requested services. Expense
reimbursement provisions in the Loan Documents with respect to enforcement
expenses shall be substantially similar to and consistent with the provisions
therefor in Harnischfeger's existing credit agreement, and the indemnification
provisions in the Loan Documents shall be consistent with the first two
sentences of this paragraph. The provisions contained in this paragraph and the
immediately preceding paragraph shall remain in full force and effect regardless
of whether definitive financing documentation shall be executed and delivered
and notwithstanding the termination of this Commitment.
By executing this letter, you acknowledge that this letter, the Term Sheet and
the Fee Letter are the only agreements between you and Chase and CSI with
respect to the Facilities and set forth the entire understanding of the parties
with respect thereto as of the date hereof. Neither this Commitment nor the Fee
Letter may be changed except pursuant to a writing signed by each of the
respective parties thereto. This Commitment shall be governed by, and construed
in accordance with, the laws of the State of New York.
<PAGE>
5
The terms and conditions of this letter, the Term Sheet and the Fee Letter are
confidential and, without our prior concurrence, may not be disclosed in whole
or in part to any other person or entity, other than Harnischfeger's Board of
Directors, affiliates, employees, agents or auditors, who agree to be bound by
the provisions of this paragraph and except as otherwise required by applicable
laws and regulations. After acceptance of this Commitment, the terms and
conditions of the Commitment may be disclosed by Harnischfeger to Target's Board
of Directors, affiliates, employees, agents or auditors, who agree to be bound
by the provisions of this paragraph, but in no event shall the Fee Letter be so
disclosed.
You acknowledge that Chase and CSI and their affiliates may be providing
financing or other services to other companies that have or may in the future
have interests conflicting with your own interests in the transactions
contemplated hereby. Chase and CSI agree that they will not use information
obtained from you in the course of the transactions contemplated hereby in
connection with the performance by Chase or CSI of services for such other
companies, and will not furnish any such information to such other companies or
otherwise use any such information in a manner inconsistent with its
confidential nature. You acknowledge that Chase and CSI have no obligation to
use in connection with the transactions contemplated hereby or to furnish to you
confidential information obtained by them from other companies.
We are pleased to have the opportunity to work with Harnischfeger to
successfully complete this important financing. Please indicate your acceptance
of this Commitment by signing and returning the enclosed copy hereof, together
with an executed copy of the Fee Letter, to Chase, no later than 5:00 p.m.,
Chicago time, on April 21, 1997 when, if not so accepted, the Commitment will
terminate. Upon Harnischfeger's timely acceptance of this offer and the
execution and delivery of the Fee Letter, the Commitment shall remain in effect
until the earlier of the date upon which the definitive documentation relating
to the Facilities is executed and June 15, 1997, after which date the Commitment
shall expire (unless extended by mutual, written agreement of the parties
hereto).
<PAGE>
6
This letter agreement and the Fee Letter may be signed in any number of
counterparts, each of which shall be an original and all of which when taken
together shall constitute one agreement.
This letter agreement supersedes and replaces the letter agreement also dated
the date hereof previously delivered to you.
Very truly yours,
THE CHASE MANHATTAN BANK
By: /s/ B.J. Lillis
--------------------------------
Name: B.J. Lillis
Title: Managing Director
CHASE SECURITIES INC.
By: /s/ Brian S. Hunnicutt
--------------------------------
Name: Brian S. Hunnicutt
Title: Vice President
Accepted and agreed to as of
this 21st day of April, 1997:
HARNISCHFEGER INDUSTRIES, INC.
By: /s/ Francis M. Corby, Jr.
--------------------------------
Name: Francis M. Corby, Jr.
Title: Executive Vice President
Finance and Administration
<PAGE>
EXHIBIT A
SUMMARY OF TERMS AND CONDITIONS
-------------------------------
HARNISCHFEGER INDUSTRIES, INC.
$1,000,000,000 CREDIT FACILITY
Borrower: Harnischfeger Industries, Inc. ("Harnischfeger")
-------------
Administrative
Agent/
Documentation
Agent: The Chase Manhattan Bank ("Chase")
-----
Arranger/
Syndication Agent: Chase Securities Inc.
Lenders: The financial institutions (including Chase) participating
as lenders (the "Lenders").
-------
Purpose: Available to fund (through a capital contribution or loan by
Harnischfeger to Acquisition Corp. of the Tender Offer Loan)
Acquisition Corp.'s purchase of shares of Target's common
stock (the "Shares") pursuant to the Tender Offer, to fund
------
the payment of other costs and expenses relating to
the Tender Offer, to refinance certain indebtedness of
Harnischfeger and its subsidiaries and Target and its
subsidiaries and for working capital and general corporate
purposes.
Facilities: Up to $1,000,000,000 in aggregate principal amount under two
facilities as follows:
(A) $500,000,000 364-day facility (the "364-Day Facility");
----------------
and
(B) $500,000,000 five-year facility (the "Five-Year
---------
Facility"; and together with the 364-Day Facility, the
--------
"Facilities").
----------
Each Facility shall be a revolving credit facility (each
advance under a Facility being a "Loan"). In addition,
----
following further discussions, Harnischfeger may elect to
have one or both of the Facilities include a syndicated
letter of credit facility and/or an auction bid facility
(each, an "Optional Facility"), each of which (if
-----------------
<PAGE>
included) shall be on conventional terms and conditions for
credits of this type.
At all times prior to the Tender Offer Funding Date (as
defined below), subject to the terms and conditions set
forth in the Credit Agreement (as defined below), an
aggregate amount of up to $240,000,000 shall be available
under the Facilities, and Harnischfeger may elect whether
revolving credit advances shall be made under the 364-Day
Facility, the Five-Year Facility or both Facilities during
such period.
On the date (the "Tender Offer Funding Date") on which
-------------------------
payment is due for the purchase of Shares accepted for
purchase pursuant to the Tender Offer, subject to the terms
and conditions set forth in the Credit Agreement, Loans
(collectively, the "Tender Offer Loan") shall be
-----------------
made available under the Facilities in an aggregate
amount of up to the lesser of (i) $760,000,000 and (ii) the
sum of the amount required to purchase the Shares pursuant
to the Tender Offer and the permitted related costs and
expenses payable and paid in connection with the
consummation of the Tender Offer on the Tender Offer Funding
Date.
From and after the Tender Offer Funding Date, the Facilities
shall continue to be available as revolving credit
facilities (together with, if applicable, the Optional
Facilities). During such period, Loans and other financial
accommodations may be used for working capital and general
corporate purposes, including but not limited to the
refinancing of the senior indebtedness of the Target
following the acquisition of all of the issued and
outstanding capital stock of the Target.
At no time (whether prior to, at the time of, or following
the Tender Offer Funding Date) shall the aggregate
outstanding principal amount of Loans (together with any
financial accommodations under the Optional Facilities)
exceed an amount equal to $1,000,000,000, as such amount may
be reduced in accordance with the terms of the Credit
Agreement.
Final Maturity: (A) With respect to the 364-Day Facility, due and payable in
full no later than 364 days from the signing date of the
Credit Agreement (the "Signing Date"); provided, that upon
------------ --------
the request of Harnischfeger and in the
discretion of the Lenders, the 364-Day Facility may be
renewed for additional 364-day periods.
<PAGE>
(B) With respect to the Five-Year Facility, due and payable
in full no later than the fifth anniversary of the Signing
Date.
Interest Rate
Definitions: ALTERNATE BASE RATE. Chase's alternate base rate in effect
from time to time.
LIBOR. The average London Interbank Offered Rate for 1-, 2-,
3- or 6- month eurodollar deposits as quoted by Reference
Banks, rounded upwards, if necessary, to the nearest 1/16%,
for deposits with major international banks in the London
Interbank Market. "Reference Banks" will be comprised of
Chase and no more than two other banking institutions
selected by Harnischfeger and acceptable to Chase. Cost of
reserves under Regulation D of the Federal Reserve Board, if
any actual cost applies, will be billed by the Lenders
directly to Harnischfeger.
Interest Payments: Interest shall accrue on the unpaid principal balance of the
Loans at a rate per annum equal to LIBOR or Alternate Base
Rate plus the applicable margin described in the pricing
grid attached hereto as Schedule I. Interest shall be paid
----------
at the end of an interest period or quarterly,
whichever is earlier. Interest shall be computed on the
basis of a 360-day year and actual days elapsed for any
calculation in respect of LIBOR, Fed Funds rate and bid
advances, and on the basis of a 365/366-day year for any
calculation in respect of the Prime Rate.
Facility Fee: The rate per annum on the commitments (whether used or
unused) under each Facility as described on Schedule I,
----------
payable to the Lenders pro rata quarterly in
arrears and calculated on the basis of actual days elapsed
and a 360-day year.
Documentation: The Facilities will be governed by one or more credit
agreements (individually or collectively, the "Credit
------
Agreement") and other related documents (collectively, the
---------
"Loan Documents") satisfactory to all parties, which shall
--------------
contain suitable conditions, representations, warranties,
covenants, defaults and other provisions mutually acceptable
to Harnischfeger, the Administrative Agent and the Lenders
and shall include, but not be limited to the following:
(A) Harnischfeger will make certain representations and
warranties consistent with the representations and
warranties contained in Article IV of the Amended and
Restated Credit Agreement (the "Existing Credit Agreement")
-------------------------
dated as of
<PAGE>
November 25, 1994, as amended by the amendment thereto dated
as of November 13, 1995, among Harnischfeger, the financial
institutions party thereto from time to time as lenders and
Chemical Bank (now known as Chase), as agent, with such
modifications (including to the representation regarding the
use of proceeds) as appropriate to permit the consummation
of the Tender Offer and such other changes that are mutually
acceptable to Harnischfeger, the Administrative Agent and
the Lenders.
(B) Harnischfeger will covenant and agree to provisions
consistent with the provisions set forth in Article V of the
Existing Credit Agreement, with such modifications
(including to the covenant regarding the use of proceeds) as
appropriate to permit the consummation of the Tender Offer
and such other changes that are mutually acceptable to
Harnischfeger, the Administrative Agent and the Lenders;
provided, that the 50% threshold in Section 5.02(a)(i)(B)
--------
of the Existing Credit Agreement shall be changed to (i) 65%
for the first two years of the Facilities and (ii) 50%
thereafter; provided, further that the minimum consolidated
-----------------
net worth amount set forth in Section 5.02(b) of the
Existing Credit Agreement shall be increased from
$516,236,000 to $650,000,000. Such covenants will be
modified as required to assure compliance by the Lenders
with all applicable requirements or regulations of the Board
of Governors of the Federal Reserve System and other
applicable law.
Additional representations, warranties and covenants,
mutually acceptable to the Administrative Agent and
Harnischfeger, shall relate to (i) the consummation of the
Tender Offer and the Merger and (ii) the treatment of the
Target as a "Restricted Subsidiary" (as defined in the
Existing Credit Agreement).
(C) The events of default under the Credit Agreement shall
be substantially similar to and consistent with the Events
of Default set forth in Article VI of the Existing Credit
Agreement, provided that the $5,000,000 thresholds in
--------
clause (i) of Section 6.01(h) of the Existing Credit
Agreement shall be increased in each case to $25,000,000.
(D) The definition of "Requisite Lenders" contained in
-----------------
Article I of the Existing Credit Agreement shall be modified
to refer to "fifty percent (50%)" instead of "sixty percent
(60%)".
(E) Except as contemplated hereby or as Chase and
Harnischfeger may agree are appropriate, the other terms and
provisions of the
<PAGE>
Loan Documents shall be substantially similar to and
consistent with the Existing Credit Agreement.
Conditions to
the Tender
Offer Loan: The funding of the Tender Offer Loan will be subject to
conditions precedent typical, in Chase's practice, for this
type of facility and any other conditions as Chase and
Harnischfeger may agree are appropriate in the context of
the proposed transaction, including without limitation, the
satisfaction of the following conditions:
(i) The terms and conditions of the offer to purchase made
in the Tender Offer and of the merger agreement for the
Merger shall have been approved by the Administrative Agent
and the Lenders (in the case of the Tender Offer, prior to
the making thereof); following commencement of the Tender
Offer, the terms of the offer to purchase shall not have
been amended, waived or modified as to price, consideration,
conditions, termination or expiration or in any other
material respect without the prior approval of the
Administrative Agent and the Lenders.
(ii) All conditions precedent to the consummation of the
Tender Offer shall have been satisfied or waived with the
Lenders' consent and the number of Shares being validly
tendered to Acquisition Corp. and not properly withdrawn
prior to the expiration of the Tender Offer shall represent
no less than the minimum number of Shares (the "Minimum
-------
Number of Shares"), determined on a fully diluted basis
----------------
after giving effect to the exercise of any uncancelled
warrants, rights, options, conversion privileges or similar
rights, necessary under Wisconsin law and the articles of
incorporation and by-laws of Target to elect a majority of
the Board of Directors of Target and to consummate the
Merger of Acquisition Corp. with and into Target.
(iii) There are no legal impediments to the Merger that are
not reasonably within the control of Harnischfeger to
overcome.
(iv) No "fair price", "moratorium", "business combination",
"control share acquisition" or other form of anti-takeover
statute, regulation, charter or by-law provision, is or
shall become applicable which would cause or is likely to
cause any material adverse consequences to Acquisition
Corp., Harnischfeger, Target or the Tender Offer or Merger,
unless such provision has been complied with without any
such material adverse consequence or waived or rescinded or
is otherwise inapplicable to the Tender Offer and the
Merger.
<PAGE>
(v) Target and its Board of Directors shall have taken all
necessary action to amend the Shareholder Rights Agreement
(the "Rights Agreement") to provide for the redemption or
----------------
annulment or inapplicability (without any substantial cost
other than payment of the redemption price of $.01 per Right
(as defined in the Rights Agreement)) of all interests
outstanding under or issued pursuant to the Rights Agreement
and to otherwise avoid the occurrence of any material
adverse consequences to Acquisition Corp. or Target as a
consequence of the Tender Offer or the Merger.
(vi) All regulatory approvals (including, without
limitation, all such approvals with respect to antitrust
matters) necessary to consummate the Tender Offer shall have
been obtained, all applicable waiting periods shall have
expired and the Administrative Agent shall be satisfied that
all material regulatory approvals necessary to consummate
the Merger have been obtained or can be timely obtained. The
Administrative Agent shall have been satisfied in good faith
that all transactions contemplated hereby comply with all
applicable requirements or regulations of the Board of
Governors of the Federal Reserve System and other applicable
law.
(vii) There shall be no order, injunction or restraining
order which would prevent or delay the consummation of, or
impose material adverse conditions on, the Tender Offer or
the Merger. There shall not exist any pending or threatened
litigation which, in the good faith judgment of the
Administrative Agent, would likely have a material adverse
effect on the ability of Harnischfeger or Acquisition Corp.
to consummate the Tender Offer or on the ability of
Harnischfeger or Acquisition Corp. to consummate the Merger
or to perform any material obligation contemplated hereby or
thereby or on the Administrative Agent's and Lenders' rights
and remedies.
(viii) Neither Target nor any of its subsidiaries shall have
taken, or be taking, any action (including any
reorganization, recapitalization, asset sale, stock purchase
or distribution to its stockholders) that would, in the good
faith judgment of the Administrative Agent, have a material
adverse effect on the condition (financial or otherwise),
business, operations, assets or prospects of Target or its
subsidiaries or on the consummation of the Tender Offer or
the Merger. In the good faith judgment of the Administrative
Agent, no material adverse
<PAGE>
change shall have otherwise occurred in the condition
(financial or otherwise), business, operations, assets or
prospects of Harnischfeger and its subsidiaries since the
date of its last audited financial statements delivered
prior to the date of the Commitment.
(ix) The Administrative Agent shall be satisfied as to
compliance with applicable laws, regulations and orders
(including those relating to Harnischfeger's and Target's
business and corporate governance) and applicable
contractual obligations (including those of Harnischfeger
and Target) deemed material by the Administrative Agent.
(x) The Administrative Agent shall have received such
financial and other information, in form and substance
satisfactory to the Administrative Agent, regarding Target
and its subsidiaries, as it shall have reasonably requested,
including, without limitation, the most recent interim
financial statements filed with the Securities and Exchange
Commission.
(xi) All fees payable under this Commitment and the Fee
Letter on the Signing Date shall have been paid and all
other conditions set forth in the Commitment Letter and the
Fee Letter shall have been met.
(xii) The Credit Agreement and the other Loan Documents
(including opinions of the Harnischfeger's counsel
satisfactory to the Administrative Agent) shall have been
executed and delivered by Harnischfeger on terms
satisfactory to the Administrative Agent, and no event which
is, or upon notice or passage of time would be, an event of
default under the Credit Agreement shall have occurred.
(xiii) The Administrative Agent shall have received, and
shall have approved, (a) Harnischfeger's (and its
subsidiaries') then current projected balance sheets and
income statements through 2002, and such projections shall
not be materially less favorable, as determined by the
Administrative Agent, than those provided to the
Administrative Agent prior to the issuance of the Commitment
Letter and (b) such other financial information (including
any subsequently prepared annual or quarterly financial
statements) as the Administrative Agent may reasonably
request.
<PAGE>
Conditions to
Loans other
than the Tender
Offer Loan: The initial borrowing under the Facilities of Loans other
than the Tender Offer Loan (which is subject to the
conditions precedent set forth above) will be subject to
conditions precedent substantially similar to and consistent
with those contained in Section 3.01 of the Existing Credit
Agreement and, in addition, shall include, but not be
limited to, the following additional condition that the
Existing Credit Agreement will have been terminated upon the
effectiveness of, and be replaced by, the Credit Agreement
and the Loan Documents.
Loans requested after the initial funding of Loans under the
Facilities (other than the Tender Offer Loan) shall be
subject to conditions precedent substantially similar to and
consistent with those contained in Section 3.02 of the
Existing Credit Agreement (after giving effect to the
modifications to the Existing Credit Agreement otherwise
contemplated herein).
Voluntary
Prepayment: Harnischfeger may prepay any outstanding Loans at any time
without penalty in a minimum amount of $10,000,000 subject
to three business days' prior written notice to the
Administrative Agent, provided that (i) any LIBOR advance
prepaid at any time other than its maturity shall be subject
to reimbursement of break-funding costs and related
expenses, if any, and (ii) Harnischfeger may not prepay any
Loan made under an auction bid facility.
Expenses: Expenses and legal fees incurred by the Administrative Agent
in connection with the preparation, arrangement,
syndication, negotiation, closing, enforcement and
administration of the Facilities shall be for the account of
Harnischfeger on the terms and subject to the conditions of
the Commitment Letter.
Increased Costs/
Change of
Circumstance/
Capital Adequacy/
Indemnities: The Loan Documents will contain customary and mutually
acceptable provisions protecting and indemnifying Lenders in
the event of unavailability of funding, illegality,
increased costs, capital adequacy charges and funding
losses, and will provide for a mutually acceptable
indemnification of Lenders and the Administrative Agent,
each of the foregoing to be substantially similar to and
consistent with the corresponding provisions in the Existing
Credit Agreement and additional indemnities in respect of
any other losses, costs or expenses incurred by Lenders or
Administrative Agent as a result of any litigation claims
asserted in
<PAGE>
connection with the Tender Offer or the Merger (whether or
not the Lenders or Administrative Agent is named as a party
thereto).
Assignments/
Participations: Any Lender may, at its discretion, may assign all or a
portion of its commitment (i) in minimum amounts of
$10,000,000 with the prior approval of the Administrative
Agent and Harnischfeger, which approval shall not be
unreasonably withheld, to any Eligible Assignee (definition
to be acceptable to Harnischfeger, Administrative Agent and
Lenders) and (ii) without such approval (so long as such
assignment would not result in increased costs to
Harnischfeger) to any affiliate of such Lender or any other
Lender. In addition, each Lender may sell participations
with the transferability of voting rights limited to changes
in principal, rates, fees and final maturity. Participants
shall not have any rights relating to indemnification for
taxes, increased costs or other liabilities arising under
the Loan Documents unless the Lender which granted the
participation to such Participant is so entitled. Each
Lender may also assign, without the consent of any party,
its rights and interest under the Credit Agreement to any
Federal Reserve Bank.
Taxes/Other Costs: All payments will be made free and clear of any taxes,
duties, withholding or other deductions whatsoever.
Other Conditions: Any matters not covered by, or made clear, in this Term
Sheet are subject to mutual agreement of the parties.
Governing Law
and Jurisdiction: State of New York.
This Summary of Terms and Conditions does not attempt to describe all of the
terms and conditions that would pertain to the Facilities, nor do its terms
suggest the specific phrasing of documentation clauses. Instead, it is intended
to outline certain points of business understanding around which the Facilities
will be structured. The closing of any financing transaction relating to the
Facilities would be subject to various conditions precedent, including, without
limitation, the conditions set forth above.
<PAGE>
SCHEDULE I
Pricing Grid
------------
The Facility Fee and Applicable Interest Rate Spreads for
the Facilities will be based on a ratings grid as follows:
<TABLE>
<CAPTION>
364-Day Facility:
<S> <C> <C> <C> <C> <C>
less than
Rating A-/A3 BBB+/Baa1 BBB/Baa BBB-/Baa3 BBB-/Baa3
- ------------------------------------------------------------------------
Undrawn Cost 6.0 7.0 8.0 10.0 17.5
- ------------------------------------------------------------------------
Drawn 25.0 27.5 30.0 32.5 50.0
Cost
- ------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Five-Year Facility:
<S> <C> <C> <C> <C> <C>
less than
Rating A-/A3 BBB+/Baa1 BBB/Baa BBB-/Baa3 BBB-/Baa3
- ------------------------------------------------------------------------
Undrawn Cost 8.0 9.0 10.0 12.5 20.0
- ------------------------------------------------------------------------
Drawn 25.0 27.5 30.0 32.5 50.0
Cost
- ------------------------------------------------------------------------
</TABLE>
At any time the Borrower's ratio of funded debt to total capital is greater than
or equal to 55%, the applicable margin would be increased by 5.0 basis points.
If ratings are given by both Moody's and Standard & Poor's and such ratings are
not comparable, the Facility Fee and Applicable Interest Rate Spread will be
determined using the higher of the two ratings, unless such ratings are two or
more steps apart, in which case the step immediately below the higher rating
will be used.
<PAGE>
Exhibit (g)(1)
PRELIMINARY SOLICITATION STATEMENT.
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 28, 1997.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
GIDDINGS & LEWIS, INC.
(Name of Registrant as Specified in its Charter)
HARNISCHFEGER INDUSTRIES, INC.
and
DSFA CORPORATION
(Name of Persons Filing Proxy Statement)
----------------
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-
11.
[_] Fee paid previously with preliminary materials:
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PRELIMINARY SOLICITATION MATERIALS DATED APRIL 28, 1997
SUBJECT TO COMPLETION
----------------
The information included herein is as it is expected to be when the
definitive solicitation statement is mailed to shareholders of Giddings &
Lewis, Inc. This solicitation statement will be revised to reflect actual
facts at the time of filing of the definitive solicitation statement.
----------------
SOLICITATION STATEMENT
OF
HARNISCHFEGER INDUSTRIES, INC.
AND
DSFA CORPORATION
TO CALL A
SPECIAL MEETING OF SHAREHOLDERS
OF
GIDDINGS & LEWIS, INC.
----------------
INTRODUCTION
This Solicitation Statement and the accompanying WHITE Written Demand Cards
("Written Demands") are being furnished to holders of outstanding shares of
Common Stock, $.10 par value per share ("Shares"), of Giddings & Lewis, Inc.,
a Wisconsin corporation (the "Company"), in connection with the solicitation
of Written Demands to call a Special Meeting of shareholders of the Company.
The Written Demands are being solicited by Harnischfeger Industries, Inc., a
Delaware corporation ("Parent" or "Harnischfeger"), and DSFA Corporation (the
"Purchaser"), a newly formed Delaware corporation and wholly owned subsidiary
of Parent, for the purpose of demanding that the Company call a special
meeting of shareholders of the Company (the "Special Meeting") for the purpose
of considering and voting on proposals (together, the "Special Meeting
Proposals") to:
(1) remove all of the current members of the Board of Directors of the
Company (the "Company Board") and any person or persons elected or
designated prior to the Special Meeting to fill any vacancy or newly
created directorship;
(2) repeal each provision of the Company's By-laws (the "Company By-
laws") or amendments thereto (other than the amendment referred to in (3)
below) adopted subsequent to March 28, 1997, or adopted on or prior to that
date but not filed by the Company as an exhibit to any Current Report on
Form 8-K, Quarterly Report on Form 10-Q or Annual Report on Form 10-K of
the Company on or prior to March 28, 1997;
(3) amend Article III of the Company By-laws to fix the number of
directors of the Company at three; and
(4) elect Jeffery T. Grade, John N. Hanson, and Francis M. Corby, Jr.
(together, the "Parent Nominees") as the directors of the Company,
effective immediately, to hold office until the annual meeting of
shareholders in 1998, 1999 and 2000, respectively, and until their
respective successors are elected and qualified.
On April 28, 1997, the Purchaser commenced a tender offer to purchase all
outstanding Shares (and associated Rights (as defined below)) at a price of
$19 per Share (and associated Right), net to the seller in cash, upon the
terms and subject to the conditions set forth in an Offer to Purchase dated
April 28, 1997 (the
<PAGE>
"Offer to Purchase") and in the related Letter of Transmittal (the "Letter of
Transmittal") (which, as either may be amended from time to time, together
constitute the "Offer"). Parent and the Purchaser have also proposed that,
following completion of the Offer, the Purchaser would effect a merger with
the Company (the "Proposed Merger") in which holders of any remaining Shares
would receive the same price per Share as the price per Share to be paid in
the Offer. The purpose of the Offer and the Proposed Merger is to enable
Parent to acquire control of, and the entire equity interest in, the Company.
The Special Meeting Proposals are intended to facilitate and expedite the
consummation of the Offer and the Proposed Merger by removing the Company's
current directors and replacing them with the Parent Nominees, all of whom are
committed, subject to their fiduciary duties, to, among other things, giving
the Company's shareholders the opportunity to receive the consideration for
their Shares contemplated by the Offer and the Proposed Merger, as described
more fully below. As used herein, unless the context otherwise requires, the
term "Shares" shall include the associated preferred share purchase rights
(the "Rights") issued pursuant to the Rights Agreement, dated as of August 23,
1995 (the "Rights Agreement"), between the Company and Firstar Trust Company,
as rights agent.
THE PARENT NOMINEES ARE COMMITTED, SUBJECT TO THEIR FIDUCIARY DUTIES, TO
GIVING YOU, AS THE OWNERS OF THE COMPANY, THE OPPORTUNITY TO ACCEPT THE
PURCHASER'S PENDING OFFER AND RECEIVE $19 IN CASH FOR YOUR SHARES PURSUANT TO
THE OFFER.
COMPLETING, SIGNING, DATING AND RETURNING THE ENCLOSED WHITE WRITTEN DEMAND
CARD WILL HELP ENABLE YOU, AS THE OWNERS OF THE COMPANY, TO DECIDE WHETHER YOU
WILL HAVE THE OPPORTUNITY TO SELL YOUR SHARES TO THE PURCHASER FOR $19 PER
SHARE IN CASH PURSUANT TO ITS PENDING OFFER. ACCORDINGLY, PARENT AND THE
PURCHASER URGE YOU TO COMPLETE, SIGN AND DATE THE ENCLOSED WHITE WRITTEN
DEMAND CARD AND RETURN IT IN THE ENCLOSED, PRE-ADDRESSED ENVELOPE IMMEDIATELY.
THE WRITTEN DEMANDS WILL NOT CONFER ANY RIGHTS TO VOTE ON MATTERS BROUGHT
BEFORE THE SPECIAL MEETING AND NO PROXIES FOR SUCH VOTES ARE BEING SOLICITED
WITH THIS SOLICITATION STATEMENT. PARENT AND THE PURCHASER WILL SEND COMPANY
SHAREHOLDERS ADDITIONAL PROXY MATERIALS SOLICITING PROXIES TO VOTE ON THE
SPECIAL MEETING PROPOSALS.
Under the Wisconsin Business Corporation Law (the "WBCL") and the Company
By-laws, a special meeting of the Company's shareholders is required to be
held upon the written demand of the holders of record of shares representing
at least 10% of all the votes entitled to be cast on any issue proposed to be
considered at the special meeting (the "Requisite Holders"). Under the Company
By-laws, the Company Board may fix a record date to determine the shareholders
entitled to make such a demand (a "Demand Record Date"). On April 28, 1997,
the Purchaser (as the holder of record of 1,000 Shares) delivered to the
Secretary of the Company a written request that the Company Board fix a Demand
Record Date and, in accordance with the Company By-laws, on , 1997, the
Company announced that the Demand Record Date is , 1997. The Company By-
laws also provide that shareholders executing Written Demands, under certain
circumstances, must agree to reimburse the Company for certain costs in
connection with the Special Meeting. Parent and the Purchaser have agreed to
bear those costs and reimburse shareholders executing Written Demands for all
such costs and for any reasonable expenses incurred in connection therewith.
See "Solicitation of Written Demands; Calling of the Special Meeting" below.
The Special Meeting has not been called, and no date, time, place or record
date for the Special Meeting has been set. Once Parent has received Written
Demands from the Requisite Holders and delivers them to the Company, the
Company is required under the Company By-laws to call and hold the Special
Meeting within specified time periods. See "Solicitation of Written Demands;
Calling of the Special Meeting" below. Shareholders will be notified of the
date, time, place and record date of the Special Meeting after they are fixed.
The principal executive offices of the Company are located at 142 Doty Street,
Fond du Lac, Wisconsin 54935.
According to the Company's Annual Report on Form 10-K for the Fiscal Year
Ended December 31, 1996 (the "Company 10-K"), there were 33,186,898 Shares
outstanding as of March 10, 1997 and, as of
ii
<PAGE>
December 31, 1996, there were outstanding pursuant to one or more of the
Company's stock or option or other incentive plans (the "Company Plans")
options to purchase 1,105,712 Shares, 576,271 of which were exercisable as of
such date. According to the Company's Proxy Statement dated as of March 21,
1997 filed with the Securities and Exchange Commission (the "Commission") in
connection with the Company's Annual Meeting of Shareholders to be held April
30, 1997, on March 13, 1997, certain members of the Company's senior
management team and other key employees purchased an aggregate of 282,355
Shares upon the exercise of options in connection with the Company's
Management Stock Purchase Program (the "MSPP") adopted by the Company that
same day. According to the Company's publicly filed documents, the Company has
no class of capital stock issued and outstanding as of the date hereof other
than the Shares.
Based upon the foregoing, assuming no options have been issued or exercised
since December 31, 1996 (other than options exercised in connection with the
MSPP, which are assumed to have been issued on the date of exercise) or will
be issued or exercised prior to the Demand Record Date, and assuming no Shares
have been issued or cancelled since December 31, 1996 (other than Shares
issued upon the exercise of options in connection with the MSPP) or will be
issued or cancelled prior to the Demand Record Date, Written Demands from the
holders of at least 2,557,326 Shares (excluding the 789,600 Shares owned by
Parent and the Purchaser) must be received by Parent and the Purchaser and
timely delivered to the Company in order to properly demand that the Company
call the Special Meeting. The actual number of Shares with respect to which
Written Demands must be received will depend upon the number of Shares issued
and outstanding on the Demand Record Date. For purposes of the foregoing
calculations, the Purchaser has assumed that the Shares issued in connection
with the MSPP are outstanding; however, Parent has asserted in litigation
against the Company that as a result of the Company's economic interest in the
Shares nominally owned by individual executives (as disclosed in the Company's
publicly filed documents), Shares issued in connection with the MSPP are not,
for certain purposes, outstanding, but are instead treasury stock that may not
be voted and may not be counted toward certain calculations, including the
calculation of the number of shares required to call the Special Meeting. See
Section 15 of the Offer to Purchase. Any assumptions made herein are made
without prejudice to the Purchaser's position with respect to such issue.
According to the Company By-laws, in order for shareholders to demand the
Special Meeting, Written Demands must be received by the Secretary of the
Company within 70 days after the Demand Record Date.
THIS SOLICITATION IS BEING MADE BY PARENT AND THE PURCHASER AND NOT ON
BEHALF OF THE COMPANY'S BOARD OF DIRECTORS.
----------------
IMPORTANT
THE CALLING OF THE SPECIAL MEETING AND THE ELECTION OF THE PARENT NOMINEES
TO THE COMPANY BOARD WILL FACILITATE THE OFFER AND THE PROPOSED MERGER. IF YOU
WANT THE OPPORTUNITY TO RECEIVE THE CONSIDERATION CONTEMPLATED BY THE OFFER
AND THE PROPOSED MERGER, WE URGE YOU TO PROMPTLY COMPLETE, SIGN, DATE AND MAIL
THE ENCLOSED WHITE WRITTEN DEMAND CARD. FAILURE TO COMPLETE, SIGN, DATE AND
MAIL A WRITTEN DEMAND HAS THE SAME EFFECT AS OPPOSING THE CALL OF THE SPECIAL
MEETING.
Written Demands should be delivered as promptly as possible, by fax (both
sides) or by mail (using the enclosed envelope), to either of Parent's
information agents, Georgeson & Company Inc. ("Georgeson") and Kissel-Blake
Inc. ("Kissel-Blake", and together with Georgeson, the "Information Agents").
Georgeson's address is Wall Street Plaza, New York, New York 10005. Kissel-
Blake's address is 110 Wall Street, New York, New York 10005.
IMPORTANT NOTE: IF ANY OF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE
FIRM, BANK, BANK NOMINEE OR OTHER NOMINEE, ONLY IT CAN EXECUTE A WRITTEN
DEMAND WITH RESPECT TO SUCH SHARES AND WILL DO SO ONLY UPON RECEIPT OF YOUR
SPECIFIC INSTRUCTIONS. ACCORDINGLY, PLEASE CONTACT THE PERSON RESPONSIBLE FOR
YOUR ACCOUNT AND INSTRUCT THAT PERSON TO EXECUTE THE WHITE WRITTEN DEMAND.
This Solicitation Statement is dated , 1997. This Solicitation
Statement and accompanying WHITE Written Demand card are first being furnished
to Company shareholders on or about , 1997.
iii
<PAGE>
If you have any questions concerning the tender offer material you have
previously received, or need assistance tendering your Shares pursuant to the
Offer, please call Kissel-Blake at one of the following numbers: banks and
brokers call (212) 344-6733, all others call toll-free (800) 554-7733.
IF YOU HAVE ANY QUESTIONS REGARDING YOUR WRITTEN DEMAND, OR NEED ASSISTANCE
IN RETURNING YOUR WRITTEN DEMAND, PLEASE CALL:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
Facsimile:
iv
<PAGE>
PURPOSE OF THIS SOLICITATION;
REASONS FOR THE SPECIAL MEETING
The Purchaser commenced its Offer to purchase all outstanding Shares at a
price of $19 per Share (and associated Right), in cash, on April 28, 1997. The
purpose of the Offer and the Proposed Merger is to enable Parent to acquire
control of, and the entire equity interest in, the Company. The Offer, as the
first step in the acquisition of the Company, is intended to facilitate the
acquisition of all outstanding Shares. The Proposed Merger, as the second step
in the acquisition of the Company, is intended to facilitate the acquisition
of any Shares not acquired by the Purchaser in the Offer. The purpose of the
Special Meeting is to allow the shareholders of the Company to act to remove
certain obstacles to Parent's and the Purchaser's ability and willingness to
consummate the Offer and the Proposed Merger. Pursuant to this Solicitation
Statement, Parent and the Purchaser are soliciting Written Demands from
holders of outstanding Shares to call the Special Meeting. Once Parent has
received Written Demands from the Requisite Holders, Parent will deliver such
Written Demands to the Company, and the Company Board will thereafter be
required, pursuant to the Company By-laws and the WBCL, to cause the Special
Meeting to be called and held.
OBSTACLES TO THE OFFER
There are a number of obstacles to Parent's ability to consummate the Offer
and the Proposed Merger, which can be removed, absent the cooperation of the
Company's current Board of Directors, by the approval by the Company's
shareholders of the Special Meeting Proposals at the Special Meeting or at
another duly called and held special or annual meeting of the Company's
shareholders. These obstacles include the Company's "poison pill" Rights
Agreement and certain provisions of the WBCL restricting business
combinations, such as the Proposed Merger, that have not been approved by the
Company Board. To date, the Company Board has refused to remove these
obstacles to permit you, as the shareholders of the Company, to have the
opportunity to determine the future of your Company and your investment.
Rights Agreement. According to the Company 10-K and the Company's
Registration Statement on Form 8-A dated August 23, 1995 (the "Company 8-A"),
on August 23, 1995 the Company adopted the Rights Agreement and the Company
Board declared a dividend of one Right for each outstanding Share. The Rights
are described in the Company 8-A, and such description of the Rights is
summarized in Section 8 of the Offer to Purchase.
According to the Company 8-A, under the Rights Agreement, if the Purchaser
were to acquire 20% or more of the Shares, unless the Rights were previously
redeemed or invalidated or were otherwise rendered inapplicable to the Offer,
each holder of record of a Right (other than the Purchaser) would have the
right to receive Shares having a fair market value (calculated as provided in
the Rights Agreement) equal to twice the exercise price for such Rights. As a
result, the Rights could severely dilute the Purchaser's equity interest in
the Company and its voting power and thereby make the Purchaser's acquisition
of the Company prohibitively expensive.
However, the Company 8-A states that, under the Rights Agreement, the
Company Board may redeem the Rights in whole, but not in part, at a price of
$.01 per Right at any time prior to a person becoming an "Acquiring Person",
as defined in the Rights Agreement (generally, a person or group that becomes
the beneficial owner of 20% or more of the Shares). In addition, the Company
8-A also states that, other than provisions relating to the principal economic
terms of the Rights, the terms of the Rights may be amended by the Company
Board without the consent of the holders of the Rights, except that from and
after the Distribution Date (as defined in the Rights Agreement and in the
Offer to Purchase), no such amendment may adversely affect the interests of
the holders of the Rights.
Business Combination Prohibition. Section 180.1141 of the WBCL ("Section
180.1141") prohibits certain business combinations and other transactions
(each, a "Section 180.1141 Transaction"), such as the Proposed
1
<PAGE>
Merger, between a Wisconsin resident domestic corporation (such as the
Company) and any "Interested Stockholder" (defined generally as any person
that, directly or indirectly, owns or, subject to certain exceptions, has the
right to exercise 10% or more of the voting power of the outstanding voting
stock of a Wisconsin resident domestic corporation) for a period of three
years after the date the person becomes an Interested Stockholder. After such
three year period, a Section 180.1141 Transaction between a Wisconsin resident
domestic corporation and such Interested Stockholder is prohibited unless (a)
certain "fair price" provisions are complied with, (b) the Section 180.1141
Transaction is approved by the affirmative vote of the holders of a majority
of the voting stock not beneficially owned by the Interested Stockholder or
(c) the acquisition of stock resulting in such stockholder becoming an
Interested Stockholder was approved by the corporation's board of directors
prior to the relevant acquisition date.
The Section 180.1141 restrictions do not apply to a Section 180.1141
Transaction with an Interested Stockholder within three years of the date such
stockholder became an Interested Stockholder if either (x) the Interested
Stockholder's acquisition of the corporation's shares on the date the
Interested Stockholder became an Interested Stockholder or (y) the Section
180.1141 Transaction, is approved by the board of directors of the corporation
prior to the date on which the Interested Stockholder became an Interested
Stockholder.
EFFECT OF REMOVAL OF CURRENT DIRECTORS AND ELECTION OF PARENT NOMINEES
The potential effects of the Rights Agreement and Section 180.1141 prevent
Parent and the Purchaser from completing the Offer and the Proposed Merger,
absent the requisite action of the Company Board. To date, the Company Board
has refused to remove these obstacles to permit you, as the shareholders of
the Company, to have the opportunity to determine the future of your Company
and your investment. Parent and the Purchaser initiated the demand of the call
of the Special Meeting so that the Company's shareholders will have the
opportunity to consider and vote upon the Special Meeting Proposals, which
would result in the removal of all of the current members of the Company Board
and in the election of the Parent Nominees as the directors of the Company.
Parent and the Purchaser intend, after removal and replacement of the Company
Board, to enter into a merger agreement with the Company providing for the
acquisition of the Shares by the Purchaser as contemplated by the Offer and
the Proposed Merger. The Proposed Merger could be made available to the
Company's shareholders, in accordance with Section 180.1141 and without the
Rights being exercisable, with the approval of the Company Board.
THE PARENT NOMINEES WILL, IF ELECTED, SUBJECT TO THEIR FIDUCIARY DUTIES, AS
DESCRIBED BELOW, BE ABLE TO ACT TO REDEEM THE RIGHTS OR OTHERWISE MAKE THEM
INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER AND TO APPROVE THE OFFER AND
THE PROPOSED MERGER UNDER SECTION 180.1141 AND TO TAKE SUCH OTHER ACTIONS AS
MAY BE NECESSARY TO GIVE ALL OF THE COMPANY'S SHAREHOLDERS THE OPPORTUNITY TO
ACCEPT THE PURCHASER'S PENDING OFFER AND RECEIVE $19 FOR EACH OF THEIR SHARES.
ACCORDINGLY, DEMANDING A SPECIAL MEETING AND VOTING FOR THE PARENT NOMINEES
WILL ENHANCE YOUR CHANCES OF BEING ABLE TO TAKE ADVANTAGE OF THE OFFER.
CONDITIONS OF THE OFFER
Because of the potential effects of the Rights Agreement and Section
180.1141, the Purchaser's ability and willingness to accept for payment Shares
tendered to it in the Offer, and to consummate the Proposed Merger, are
subject to certain terms and conditions, including (1) the Rights having been
redeemed by the Company Board or the Purchaser being satisfied, in its
reasonable judgment, that the Rights have been invalidated or are otherwise
inapplicable to the Offer and the Proposed Merger (the "Rights Condition"),
and (2) the Purchaser being satisfied, in its reasonable judgment, that the
restrictions contained in Section 180.1141 will not apply to the acquisition
of Shares pursuant to the Offer or the Proposed Merger (the "Business
Combination Condition"). Each of the Rights Condition and the Business
Combination Condition is likely to be satisfied if the Special Meeting
Proposals are approved and the current directors of the Company are removed
and replaced by the Parent Nominees.
2
<PAGE>
The Offer is also subject to the condition that there must be validly
tendered prior to expiration of the Offer and not properly withdrawn a number
of Shares (the "Minimum Number of Shares") which, when added to the Shares
beneficially owned by the Purchaser and its affiliates, constitutes at least a
majority of the total voting power of all shares of capital stock of the
Company outstanding on a fully diluted basis on the date of purchase (the
"Minimum Condition"). For purposes of the Offer, "on a fully diluted basis"
means, as of any date, the number of Shares outstanding, together with Shares
that the Company could then be required to issue pursuant to options
outstanding at that date under the Company Plans (assuming all such options
are then exercisable) or otherwise (other than in connection with the Rights
Agreement). Based on publicly available information filed by the Company with
the Commission, and on certain assumptions set forth in the Offer to Purchase,
the Minimum Number of Shares would be approximately 16,497,883. The actual
Minimum Number of Shares will depend upon the facts as they exist on the date
of purchase. For purposes of the foregoing calculations, the Purchaser has
assumed that the Shares issued in connection with the MSPP are outstanding;
however, Parent has asserted in litigation against the Company that as a
result of the Company's economic interest in the Shares nominally owned by
individual executives (as disclosed in the Company's publicly filed
documents), Shares issued in connection with the MSPP are not, for certain
purposes, outstanding, but are instead treasury stock that may not be voted
and may not be counted toward certain calculations, including the calculation
of the number of shares required to call the Special Meeting. See Section 15
of the Offer to Purchase. Any assumptions made herein are made without
prejudice to the Purchaser's position with respect to such issue.
Certain other conditions to the Offer are described in Section 14 of the
Offer to Purchase. Subject to the applicable rules of the Commission, the
Purchaser expressly reserves the right, in its sole discretion, to waive any
one or more of the conditions to the Offer.
A copy of the Tender Offer Statement on Schedule 14D-1, which was filed by
Parent and the Purchaser with the Commission on April 28, 1997, and all
amendments thereto, may be obtained by mail from the Commission upon payment
of the Commission's customary charges, by writing to its principal office at
450 Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549.
Such material is also available for inspection and copying at the principal
office of the Commission at the address set forth immediately above, and at
the Commission's regional offices at Seven World Trade Center, 13th Floor, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. The Commission also maintains an Internet site on the
World Wide Web at <http://www.sec.gov> that contains reports, proxy statements
and other information. The information also should be available at The Nasdaq
Stock Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
IF YOU BELIEVE THAT YOU SHOULD HAVE THE OPPORTUNITY TO DECIDE THE FUTURE OF
YOUR COMPANY AND TO RECEIVE $19 NET PER SHARE IN CASH FOR ALL OF YOUR SHARES,
PARENT AND THE PURCHASER URGE YOU TO COMPLETE, SIGN, DATE AND RETURN YOUR
WHITE WRITTEN DEMAND CARD PROMPTLY.
CALLING THE SPECIAL MEETING WILL BE AN IMPORTANT STEP IN SECURING THE
CONSUMMATION OF THE OFFER AND THE PROPOSED MERGER. HOWEVER, YOU MUST TENDER
YOUR SHARES PURSUANT TO THE OFFER IF YOU WISH TO PARTICIPATE IN THE OFFER.
YOUR EXECUTION OF THE WHITE WRITTEN DEMAND CARD DOES NOT OBLIGATE YOU TO VOTE
IN FAVOR OF THE SPECIAL MEETING PROPOSALS OR TO TENDER YOUR SHARES PURSUANT TO
THE OFFER, AND YOUR FAILURE TO EXECUTE THE WHITE WRITTEN DEMAND CARD DOES NOT
PREVENT YOU FROM VOTING IN FAVOR OF THE SPECIAL MEETING PROPOSALS OR FROM
TENDERING YOUR SHARES PURSUANT TO THE OFFER.
Parent intends to continue to seek to negotiate with the Company with
respect to the acquisition of the Company. If such negotiations result in a
definitive merger agreement between the Company and Parent, certain material
terms of the Offer may change and Parent may elect not to proceed with any
solicitation of proxies for use at the Special Meeting. Accordingly, such
negotiations could result in, among other things, termination or amendment of
the Offer and/or submission of a different acquisition proposal to the Company
shareholders for their approval.
3
<PAGE>
If the Purchaser should terminate or materially amend the terms of the Offer
prior to the Special Meeting, Parent or the Purchaser will disseminate such
information regarding such changes to the Company's shareholders and, in
appropriate circumstances, will provide the Company's shareholders with a
reasonable opportunity to revoke their proxies prior to the Special Meeting.
SOLICITATION OF WRITTEN DEMANDS;
CALLING OF THE SPECIAL MEETING
Call of Special Meeting; Demand Record Date. Under the WBCL and the Company
By-laws, a special meeting of the Company's shareholders is required to be
held upon the written demand of the Requisite Holders. Under the Company By-
laws, the Company Board may fix a record date to determine the shareholders
entitled to make such a demand. The Demand Record Date may not precede the
date upon which the resolution fixing the Demand Record Date is adopted by the
Company Board and may not be more than 10 days after the date upon which the
resolution fixing the Demand Record Date is adopted by the Company Board. The
Company By-laws provide that the Company Board shall promptly, but in all
events within 10 days after the date on which a valid request to fix a Demand
Record Date is received, adopt a resolution fixing the Demand Record Date and
shall make a public announcement of such Demand Record Date. In addition, the
Company By-laws provide that if no Demand Record Date has been fixed by the
Company Board within 10 days after the date on which such request is received
by the Company's Secretary, the Demand Record Date shall be the 10th day after
the first date on which a valid written request to set a Demand Record Date is
received by the Company's Secretary. On April 28, 1997 the Purchaser (as the
record holder of 1,000 Shares) delivered to the Company a request that the
Company set a Demand Record Date, and on , 1997, the Company announced
that the Company Board had fixed , 1997 as the Demand Record Date. Once
Parent has received Written Demands from the Requisite Holders (all of whom
must be holders on the Demand Record Date) and timely delivers such Written
Demands to the Company, the Company is required under the Company By-laws and
the WBCL to call and hold the Special Meeting within specified time periods
described below.
The foregoing notwithstanding, pursuant to the Company By-laws, the Company
is not required to call the Special Meeting upon the demand of the Requisite
Holders unless the Soliciting Shareholders (as defined below), jointly and
severally, agree to pay the Company's costs of holding the Special Meeting,
including the costs of preparing and mailing proxy materials for the Company's
own solicitation (the "Company Costs"), provided that if each of the
resolutions introduced by any Soliciting Shareholder at such meeting is
adopted, and each of the individuals nominated by or on behalf of any
Soliciting Shareholder for election as a director at such meeting is elected,
then the Soliciting Shareholders shall not be required to pay such costs.
Under the Company By-laws, a "Soliciting Shareholder" is any shareholder
signing a Written Demand delivered to the Company, if the total number of such
shareholders is 10 or fewer, or, if the total number of shareholders signing
Written Demands delivered to the Company is more than 10, each person who
either (1) was a participant (as defined in Rule14a-11 promulgated under the
Securities Exchange Act of 1934, as amended) in any solicitation of such
Written Demands or (2) at the time of the delivery to the Company of the
Written Demands had engaged or intended to engage in any solicitation of
proxies for use at the Special Meeting. The Company By-laws also provide that
certain affiliates of Soliciting Shareholders may, upon the reasonable and
good faith determination of the Company Board, be deemed to be Soliciting
Shareholders. By signing a Written Demand, a shareholder is agreeing that if
it is or becomes a Soliciting Shareholder with respect to the demand of the
Special Meeting, it will, jointly and severally with any other Soliciting
Shareholder, pay the Company Costs, as provided in the Company By-laws.
However, Parent has agreed to pay any Company Costs required to be paid by
itself and any other Soliciting Shareholder pursuant to the relevant provision
of the Company By-laws and has agreed to reimburse in full the other
Soliciting Shareholders for any reasonable expenses incurred by such parties
in connection therewith.
Special Meeting Record Date. Under the Company By-laws, the Company Board
may fix a record date for the purpose of determining the holders of Shares who
are entitled to notice of and to vote at the Special Meeting (the "Special
Meeting Record Date"), which shall not be a date later than the 30th day after
the Delivery Date (as defined below), and, if the Company Board fails to fix
the Special Meeting Record Date within 30 days after the Delivery Date, then
the close of business on such 30th day will be the Special Meeting Record
4
<PAGE>
Date. The Company By-laws define the "Delivery Date" to be the date valid
Written Demands from the Requisite Holders who are record holders as of the
Demand Record Date are delivered to the Company. In accordance with the
Company By-laws and the WBCL, shareholders of the Company will be given notice
of the Special Meeting Record Date after it has been set.
Date, Time, and Place of Special Meeting. Under the Company By-laws, the
Company Board may fix the date and time of the Special Meeting; provided such
date may not be more than 70 days after the Special Meeting Record Date; and
provided further that in the event the Company Board fails to fix a meeting
date within 10 days after the Delivery Date, the Special Meeting is to be held
at 2:00 p.m. local time on the 100th day after the Delivery Date (unless such
day is not a business day, in which case the meeting is to be held on the
first preceding business day). Under the Company By-laws, the Company Board or
the Chairman of the Board, the President or the Secretary of the Company may
designate the place of the Special Meeting. Shareholders of the Company are
required to be given notice of the time and place of the Special Meeting in
accordance with the Company By-laws.
WRITTEN DEMAND PROCEDURES
Only holders of record as of the close of business on the Demand Record Date
will be entitled to execute Written Demands for a Special Meeting. If you are
a shareholder of record on the Demand Record Date, you will retain your demand
rights even if you sell your Shares after the Demand Record Date or if you
tender your Shares pursuant to the Offer, whether before or after the Demand
Record Date. The tender of Shares pursuant to the Offer does not constitute
the grant to Parent or the Purchaser of a Written Demand or any voting rights
or rights to execute a Written Demand with respect to the tendered Shares
until such time as such Shares are accepted for payment by the Purchaser.
ACCORDINGLY, IT IS IMPORTANT THAT YOU COMPLETE, SIGN, DATE AND RETURN THE
WHITE WRITTEN DEMAND CARD, EVEN IF YOU SELL SUCH SHARES AFTER THE DEMAND
RECORD DATE OR TENDER SUCH SHARES PURSUANT TO THE OFFER.
IF ANY OF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK, BANK
NOMINEE OR OTHER NOMINEE, ONLY IT CAN EXECUTE A WRITTEN DEMAND FOR SUCH SHARES
AND WILL DO SO ONLY UPON RECEIPT OF YOUR SPECIFIC INSTRUCTIONS. ACCORDINGLY,
PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT THAT
PERSON TO EXECUTE THE WHITE WRITTEN DEMAND CARD.
You may revoke your Written Demand at any time prior to the Delivery Date by
executing and delivering a later dated WHITE Written Demand card or other
written revocation clearly stating that your Written Demand is no longer
effective to the Secretary of the Company at Giddings & Lewis, Inc., 142 Doty
Street, Fond du Lac, Wisconsin 54935. Parent and the Purchaser request that
you send a copy of any revocation sent to the Company to Harnischfeger
Industries, Inc., 3600 South Lake Drive, St. Francis, Wisconsin 53235, c/o K.
Thor Lundgren, Executive Vice President for Law and Government Affairs,
Secretary and General Counsel. Execution of a proxy in connection with the
Special Meeting will not revoke your Written Demand.
SPECIAL MEETING PROPOSALS; REQUIRED VOTE
At the Special Meeting, Parent and the Purchaser intend to present the
following resolutions for adoption by the Company's shareholders, in the order
set forth below.
(1) REMOVAL OF ALL CURRENT DIRECTORS. The text of the first resolution
proposed by Parent and the Purchaser for adoption at the Special Meeting by
the Company's shareholders reads as follows:
"RESOLVED, that all of the directors of the Company, including Marvin L.
Isles, Ben R. Stuart, John A. Becker, John W. Guffey, Jr., Ruth M. Davis,
and Benjamin F. Garmer, III, and any other person who is a director of the
Company at the time this resolution takes effect, be, and all of them
hereby are, removed from such office, effective immediately."
5
<PAGE>
According to the Company's Restated Articles of Incorporation, as heretofore
amended (the "Company Charter"), approval of this resolution requires the
affirmative vote of holders of at least 66 2/3% of the voting power of the
then outstanding shares of all classes of capital stock of the Company
generally possessing voting rights in the election of directors, voting
together as a single class.
(2) REPEAL OF LATER-ADOPTED BY-LAWS. The text of the second resolution
proposed by Parent and the Purchaser for adoption at the Special Meeting by
the Company's shareholders reads as follows:
"RESOLVED, that each and every provision of the By-laws of the Company and
each and every amendment thereto (other than the amendment proposed by the
proponent of this resolution at the meeting of the Company's shareholders
at which this resolution is adopted) adopted subsequent to March 28, 1997,
or adopted on or prior to that date but not filed by the Company as an
exhibit to any Current Report on Form 8-K, Quarterly Report on Form 10-Q or
Annual Report on Form 10-K of the Company on or prior to March 28, 1997,
be, and each of them hereby is, repealed and of no effect."
According to the Company By-laws, this resolution will be approved if the
number of votes cast in favor of the resolution exceeds the number of votes
cast in opposition to the resolution; provided that, pursuant to the Company
Charter, to the extent this amendment affects Section 3.01 of the Company By-
laws (relating to the powers, number and tenure of directors) or Article IX of
the Company By-laws (relating to the indemnification of officers and
directors), the affirmative vote of holders of at least 66 2/3% of the voting
power of the then outstanding shares of all classes of capital stock of the
Company generally possessing voting rights in the election of directors,
voting together as a single class, shall be required. March 28, 1997 is the
filing date of the Company 10-K with the Commission.
(3) REDUCTION IN THE NUMBER OF DIRECTORS. The text of the third resolution
proposed by Parent and the Purchaser for adoption at the Special Meeting by
the Company's shareholders reads as follows:
"RESOLVED, that the By-laws of the Company be amended, effective
immediately, to delete the first sentence of paragraph (b) of Section 3.01
of Article III thereof in its entirety and to replace such sentence with
the following language:
"(b) The number of directors of the Corporation shall be three (3),
divided into three (3) classes of one (1), one (1) and one (1)
director, respectively."
According to the Company Charter, approval of this resolution requires the
affirmative vote of holders of at least 66 2/3% of the voting power of the
then outstanding shares of all classes of capital stock of the Company
generally possessing voting rights in the election of directors, voting
together as a single class.
(4) ELECTION OF PARENT NOMINEES. Parent and the Purchaser intend to propose
at the Special Meeting that, following the removal of all incumbent directors
of the Company from office and the reduction of the size of the Company Board
to three, the shareholders of the Company elect the three Parent Nominees
named below as directors of the Company to fill the vacancies created by the
removal of such incumbent directors and such reduction in the size of the
Company Board. The text of the fourth resolution proposed by Parent and the
Purchaser for adoption at the Special Meeting by the Company's shareholders
reads as follows:
"RESOLVED, that the shareholders of the Company hereby elect Jeffery T.
Grade, John N. Hanson, and Francis M. Corby, Jr. as directors of the
Company, effective immediately, to hold office until the annual meeting of
shareholders in 1998, 1999 and 2000, respectively, and until their
respective successors are elected and qualified."
According to the WBCL and the Company By-laws, each Parent Nominee to be
elected will be elected by a plurality of the votes cast by the Shares
entitled to vote at the Special Meeting (assuming a quorum is present).
Parent's and the Purchaser's primary purpose in seeking to elect the Parent
Nominees to the Company Board is to obtain the redemption of the Rights (or
the amendment of the Rights Agreement to make the Rights
6
<PAGE>
inapplicable to the Offer and the Proposed Merger) and the approval of the
Offer and the Proposed Merger under Section 180.1141, thereby facilitating the
consummation of the Offer and the Proposed Merger. However, if elected the
Parent Nominees would be responsible for managing the business and affairs of
the Company. Each director has an obligation under applicable law to discharge
his duties as a director on an informed basis, in good faith, with the care an
ordinarily careful and prudent person in a like position would exercise under
similar circumstances and in a manner the director honestly believes to be in
the best interests of the Company. Accordingly, circumstances may arise in
which the interests of Parent, the Purchaser, and their affiliates, on the one
hand, and the interests of other shareholders of the Company, on the other
hand, may differ. In any such case, the Parent Nominees intend to discharge
fully their obligations under applicable law.
THE PARENT NOMINEES ARE COMMITTED, SUBJECT TO THEIR FIDUCIARY DUTIES, TO
GIVING YOU, AS THE OWNERS OF THE COMPANY, THE OPPORTUNITY TO ACCEPT THE
PURCHASER'S PENDING OFFER AND TO RECEIVE $19 PER SHARE IN CASH FOR YOUR SHARES
PURSUANT TO THE OFFER.
The Parent Nominees have furnished the following information concerning
their principal occupations or employment and certain other matters. Jeffery
T. Grade, John N. Hanson, and Francis M. Corby, Jr., if elected, would hold
office until the Company's Annual Meeting of Shareholders in 1998, 1999 and
2000, respectively, and until a successor has been elected and qualified.
NAME, AGE AND PRINCIPAL OCCUPATION AND
DATE OF ELECTION TO BUSINESS EXPERIENCE
PRESENT POSITIONS DURING LAST FIVE YEARS
------------------- ------------------------
Jeffery T. Grade..................... Chairman and Chief Executive Officer
Director of Parent since: 1983 of Parent since 1993. Chairman of the
Director of the Purchaser since: Board and President of the Purchaser
April 1997 since April 1997. President and Chief
Age 53. Executive Officer of Parent from 1992
to 1993. President and Chief
Operating Officer of Parent from 1986
to 1992. Director, Case Corporation
and Coeur D'Alene Mines Corporation.
John N. Hanson....................... President and Chief Operating Officer
Director of Parent since: 1996 of Parent since 1996. Vice President
Director of the Purchaser since: and Secretary of the Purchaser since
April 1997 April 1997. Executive Vice President
Age 55. and Chief Operating Officer of Parent
from 1995 to 1996. President and
Chief Executive Officer of Joy
Technologies Inc. from 1994 to 1995.
President, Chief Operating Officer
and Director of Joy Technologies Inc.
from 1990 to 1995. Director, Schuller
Corporation.
Francis M. Corby, Jr................. Executive Vice President for Finance
Director of Parent since: 1996 and Administration and Chief
Director of the Purchaser since: Financial Officer of Parent since
April 1997 1995. Vice President and Treasurer of
Age 53. the Purchaser since April 1997.
Senior Vice President, Finance and
Chief Financial Officer of Parent
from 1986 to 1995.
The business address of each Parent Nominee is 3600 South Lake Drive, St.
Francis, Wisconsin 53235. Each of the Parent Nominees is a citizen of the
United States.
Each of the Parent Nominees has consented to serve as a director of the
Company, if elected. Parent and the Purchaser do not expect that any of the
Parent Nominees will be unable to stand for election if the Special Meeting is
held, but, in the event that any vacancy in the Parent Nominees should occur,
Parent will name a
7
<PAGE>
substitute nominee. In addition, Parent reserves the right (i) to nominate
additional nominees to fill any director positions created by the Company
Board prior to or at the Special Meeting, and (ii) to nominate or substitute
additional persons if the Company makes or announces any changes to the
Company By-laws or takes or announces any other action that has, or if
consummated would have, the effect of disqualifying any or all of the Parent
Nominees.
According to the Company's publicly filed documents, non-employee directors
of the Company generally are eligible to receive an annual fee and an
additional fee for each meeting of the Company Board attended, along with
certain stock incentive benefits, in accordance with the policies of the
Company; however, each Parent Nominee has indicated that he intends to forego
such fees and stock incentive benefits, if elected. In addition, each of the
Parent Nominees is and is expected to continue to be an employee of Parent,
and, as such, will continue to receive his normal compensation in connection
with such employment. The Parent Nominees, if elected, will be indemnified by
the Company for service as a director of the Company to the extent
indemnification is provided to the directors of the Company under the Company
Charter, the Company By-laws, the WBCL and any other customary practices and
policies. In addition, Parent has agreed to indemnify the Parent Nominees
against certain claims, damages and expenses arising from their standing for
election at the Special Meeting. Schedule II sets forth certain additional
information concerning the Parent Nominees as well as certain information
regarding ownership of Shares by Parent, the Purchaser and the Parent
Nominees.
IF THE SPECIAL MEETING IS NOT CALLED, OR IF EACH OF THE SPECIAL MEETING
PROPOSALS IS NOT APPROVED BY THE COMPANY'S SHAREHOLDERS, AND AS A RESULT
CERTAIN CONDITIONS TO THE OFFER ARE NOT SATISFIED, PARENT AND THE PURCHASER
MAY EITHER (I) TERMINATE THE OFFER OR (II) CONTINUE TO PURSUE THE OFFER AND
THE SATISFACTION OF THE CONDITIONS TO THE OFFER THROUGH NEGOTIATION,
LITIGATION AND OTHER MEANS.
VOTING AT THE SPECIAL MEETING
The Company Charter provides that holders of Shares are entitled to one vote
for each Share held by them on all matters brought before the Company's
shareholders for a vote, including each of the Special Meeting Proposals.
SOLICITATION OF WRITTEN DEMANDS
Written Demands may be solicited by mail, telephone, telecopier or the
Internet and in person. Solicitations may be made by directors, officers,
investor relations personnel and other employees of Parent or the Purchaser,
none of whom will receive additional compensation for such solicitations.
Parent has requested banks, brokerage houses and other custodians, nominees
and fiduciaries to forward all of its solicitation materials to the beneficial
owners of the Shares they hold of record. Parent will reimburse these record
holders for customary clerical and mailing expenses incurred by them in
forwarding these materials to their customers.
Parent has retained Georgeson and Kissel-Blake for solicitation and advisory
services in connection with (i) this solicitation and (ii) the solicitation of
proxies in connection with the votes to be taken at the Special Meeting, if
called. Parent has also retained Georgeson and Kissel-Blake to act as
Information Agents in connection with the Offer. Parent will pay usual and
customary compensation for all such services, including fees aggregating up to
$ , and will reimburse each of the Information Agents for reasonable out-of-
pocket expenses in connection therewith. Parent has agreed to indemnify each
of the Information Agents against certain liabilities and expenses in
connection with the Offer, including, without limitation, certain liabilities
under the federal securities laws. Georgeson and Kissel-Blake will solicit
Written Demands and proxies from individuals, brokers, bank nominees and other
institutional holders. It is anticipated that Georgeson and Kissel-Blake will
employ approximately 50 and 42 employees, respectively, to solicit Written
Demands and proxies in connection with the calling of and voting at the
Special Meeting.
8
<PAGE>
Lehman Brothers Inc. ("Lehman Brothers") is acting as Dealer Manager in
connection with the Offer and as Parent's financial advisor with respect to
the Offer and the Proposed Merger. As compensation for such services, Parent
has agreed to pay or cause to be paid to Lehman Brothers (i) if Parent or any
of its affiliates acquires substantially all of the assets of the Company or
becomes a party to any merger or consolidation with the Company, $3.5 million,
or (ii) if a transaction is not consummated, a fee equal to 7% of Parent's
profits from the sale of its Shares or of any termination fee received. The
first $250,000 of the fee payable under (i) above is payable within ten days
of commencement of the Offer, regardless of whether the full amount of such
fee ever becomes payable. Parent has also agreed to reimburse Lehman Brothers
for certain reasonable expenses incurred in connection with Lehman Brothers'
engagement, and has also agreed to indemnify Lehman Brothers (and certain
affiliated persons) against certain liabilities and expenses, which would
include, without limitation, certain liabilities under the federal securities
laws.
Lehman Brothers has advised Parent and the Purchaser that it does not admit
that it or any of its directors, officers or employees is a "participant" as
defined in Schedule 14A promulgated under the Securities Exchange Act of 1934,
as amended, in the solicitation of Written Demands or proxies, or that
Schedule 14A requires the disclosure of certain information concerning Lehman
Brothers. In connection with Lehman Brothers' role as financial advisor to
Parent, Lehman Brothers and the following investment banking employees of
Lehman Brothers may, for the purpose of assisting in the solicitation of
Written Demands to call the Special Meeting and proxies for the Special
Meeting, communicate in person, by telephone or otherwise with a limited
number of institutions, brokers or other persons who are shareholders of the
Company: G. Tilles, S. Mohr, J. Seaman and J. Lucci. Lehman Brothers will not
receive any fee for or in connection with such solicitation activities apart
from the fees which it is otherwise entitled to receive as described above. In
the normal course of its business, Lehman Brothers is a market maker with
respect to the Shares and regularly buys and sells Shares for its own account
and for the accounts of its customers, which transactions may result in Lehman
Brothers and its associates having at any time a net "long" or net "short"
position in Shares or option contracts with other derivatives in or relating
to the Shares. As of April 18, 1997, Lehman Brothers had a net "long" position
of 397 Shares.
The entire expense of soliciting Written Demands and proxies for the Special
Meeting is being borne by Parent. Parent does not currently intend to seek
reimbursement for such expenses from the Company. Costs incidental to such
Written Demands and proxies include expenditures for printing, postage, legal
and related expenses and are expected to be approximately $1.1 million. Total
costs incurred to date in furtherance of or in connection with such Written
Demands and proxies are approximately $25,000. In addition, Parent has agreed
to pay any Company Costs required to be paid by itself and any other
Soliciting Shareholder pursuant to Section 2.03 of the Company By-laws and has
agreed to reimburse in full the other Soliciting Shareholders for any
reasonable expenses incurred by such parties in connection therewith. Parent
is unable to estimate the amount of such Company Costs. See "Solicitation of
Written Demands; Calling of Special Meeting".
SHAREHOLDER PROPOSALS
According to the Company's proxy statement for the 1997 Annual Meeting of
Shareholders, proposals which shareholders of the Company intend to present at
and have included in the Company's proxy statement for the 1998 annual meeting
must be received by the Company by the close of business on November 21, 1997.
In addition, the proxy statement states that a shareholder who otherwise
intends to present business at the 1998 annual meeting (including nominating
persons for election as directors) must comply with the requirements set forth
in the Company By-laws. The proxy statement states that, among other things,
to bring business before an annual meeting, a shareholder must give written
notice thereof to the Secretary of the Company in advance of the meeting in
compliance with the terms and within the time periods specified in the Company
By-laws.
9
<PAGE>
OTHER INFORMATION
Parent and the Purchaser. Parent, whose principal offices are located in St.
Francis, Wisconsin, is a Delaware corporation and a holding company for
subsidiaries involved in the worldwide manufacture and distribution of surface
mining equipment; underground mining equipment; pulp and papermaking
machinery; and material handling equipment. In early fiscal 1996, Parent
completed the acquisition of Dobson Park Industries plc ("Dobson"), an
industrial engineering group with interests in underground mining equipment,
industrial electronic control systems, toys and plastics. Dobson's principal
subsidiary, Longwall International, is engaged in the manufacture, sale and
service of mining equipment for the international underground coal mining
industry and has been integrated into the Parent's Mining Equipment Segment.
In March 1996, Parent completed the purchase of the assets of the pulp
machinery division of Ingersoll-Rand Company.
Parent is the direct successor to a business begun over 100 years ago in
Wisconsin which, through its subsidiaries, manufactures and markets products
classified into three industry segments: Mining Equipment, Pulp and
Papermaking Machinery, and Material Handling.
The Purchaser is a newly incorporated Delaware corporation and a wholly
owned subsidiary of Parent which to date has not conducted any business other
than in connection with the Offer and the Proposed Merger. The principal
executive offices of Parent and the Purchaser are located at 3600 South Lake
Drive, St. Francis, Wisconsin 53235. Parent owns all of the outstanding shares
of the Purchaser.
From time to time, in the ordinary course of business, Parent makes
purchases from and sales to the Company of certain products, which
transactions are on terms and conditions customary for the industry and
negotiated at arm's length. Neither purchases by Parent from the Company nor
sales by Parent to the Company have exceeded $5 million in the aggregate in
any of Parent's or the Company's past three fiscal years.
Directors and Executive Officers. Certain information about the directors
and executive officers of Parent and the Purchaser who may also assist
Georgeson and Kissel-Blake in soliciting proxies and Written Demands is set
forth in the attached Schedule I.
Other Information. Schedule II sets forth certain information relating to
Shares owned by Parent and the Purchaser. Schedule III sets forth certain
information, as made available in public documents, regarding Shares held by
the Company's principal shareholders and its management.
THIS SOLICITATION STATEMENT IS NEITHER A REQUEST FOR THE TENDER OF SHARES
NOR AN OFFER WITH RESPECT THERETO. THE PURCHASER'S PENDING OFFER IS BEING MADE
ONLY BY MEANS OF THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL.
FOR ADDITIONAL COPIES OF THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL,
CALL THE INFORMATION AGENTS FOR THE OFFER AT ONE OF THE FOLLOWING NUMBERS:
BANKS AND BROKERS CALL (212) 344-6733, ALL OTHERS CALL TOLL-FREE (800) 554-
7733.
PLEASE INDICATE YOUR SUPPORT OF THE PURCHASER'S PENDING OFFER BY COMPLETING,
SIGNING AND DATING THE ENCLOSED WHITE WRITTEN DEMAND CARD AND RETURNING IT
PROMPTLY TO THE INFORMATION AGENTS IN THE ENCLOSED ENVELOPE. NO POSTAGE IS
NECESSARY IF THE ENVELOPE IS MAILED IN THE UNITED STATES.
YOUR SUPPORT IS IMPORTANT! PLEASE COMPLETE, SIGN, DATE AND MAIL THE
ACCOMPANYING WHITE WRITTEN DEMAND CARD PROMPTLY.
HARNISCHFEGER INDUSTRIES, INC.
DSFA CORPORATION
, 1997
10
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets forth
the name, business or residence address, principal occupation or employment at
the present time and during the last five years, and the name and principal
business of any corporation or other organization in which such employment is
conducted or was conducted of each director and executive officer of Parent.
Except as otherwise noted, each of the Parent's directors and executive
officers is a citizen of the United States. The business address of each
executive officer of Parent is 3600 South Lake Drive, St. Francis, Wisconsin
53235. Each occupation set forth opposite a person's name, unless otherwise
indicated, refers to employment with Parent. Directors are indicated by an
asterisk.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME, BUSINESS OR EMPLOYMENT AND MATERIAL
RESIDENCE ADDRESS, AGE OCCUPATIONS FOR PAST FIVE YEARS
---------------------- -------------------------------
<S> <C>
* Donna M. Alvarado........................ Principal of Aguila International, an
The Thurber Center international business development
91 Jefferson Avenue consulting firm based in Columbus, Ohio,
Columbus, Ohio 43215 since 1994. President and Chief Executive
Director since: 1992- Officer of Quest International, a non-profit
Age 48. educational organization based in Granville,
Ohio, from 1989 to 1994. Director, Park
National Bank.
* Larry D. Brady........................... President of FMC Corporation, a world leader
FMC Corporation in production of chemicals and machinery for
200 E. Randolph Drive industry, government and agriculture, since
Chicago, Illinois 60601 1993. Director of FMC Corporation since
Director since: 1995 1989. Chairman of United Defense L.P.
Age 54. Director, National Merit Scholarship
Foundation and National Association of
Manufacturers.
* Francis M. Corby, Jr..................... Executive Vice President for Finance and
Director since: 1996 Administration and Chief Financial Officer
Age 53. since 1995. Senior Vice President, Finance
and Chief Financial Officer from 1986 to
1995.
* John D. Correnti......................... President, Chief Executive Officer and
Nucor Corporation Director of Nucor Corporation, a major steel
2100 Rexford Road producer headquartered in Charlotte, North
Charlotte, North Carolina 28211 Carolina, since 1996. President, Chief
Director since: 1994 Operating Officer and Director of Nucor,
Age 49. from 1991 to 1995. Director, CEM
Corporation, Navistar International
Corporation and North Carolina Board of
Wachovia Bank.
* Harry L. Davis........................... Professor of Creative Management at the
842 Western Avenue University of Chicago since 1994. Professor
Flossmoor, Illinois 60422 of Marketing from 1963 to 1994. Deputy Dean
Director since: 1987 of the Graduate School of Business at the
Age 59. University of Chicago from 1983 to 1993.
Director, Golden Rule Insurance Company.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME, BUSINESS OR EMPLOYMENT AND MATERIAL
RESIDENCE ADDRESS, AGE OCCUPATIONS FOR PAST FIVE YEARS
---------------------- -------------------------------
<S> <C>
* Robert M. Gerrity........................ Chairman and Chief Executive Officer of
Gerrity Partners Antrim Group Inc., a Michigan-based
114 Division Street technology corporation, since December,
Bellaire, Michigan 49615 1996. Director and former President and
Director since: 1994 Chief Executive Officer of Ford New Holland,
Age 59. now New Holland n.v., a London-based
agricultural and industrial equipment
manufacturer. Director, Libralter Engineered
Systems, Rubbermaid, Inc. and Standard Motor
Products, Inc.
* Jeffery T. Grade......................... Chairman and Chief Executive Officer since
Director since: 1983 1993. President and Chief Executive Officer
Age 53. from 1992 to 1993. President and Chief
Operating Officer from 1986 to 1992.
Director, Case Corporation and Coeur D'Alene
Mines Corporation.
* John N. Hanson........................... President and Chief Operating Officer since
Director since: 1996 1996. Executive Vice President and Chief
Age 55. Operating Officer from 1995 to 1996.
President and Chief Executive Officer of Joy
Technologies Inc. from 1994 to 1995.
President, Chief Operating Officer and
Director of Joy Technologies Inc. from 1990
to 1995. Director, Schuller Corporation.
* Robert B. Hoffman........................ Senior Vice President and Chief Financial
Monsanto Company Officer of Monsanto Company, a diversified
800 North Lindbergh Blvd. company in chemicals, pharmaceuticals, food
St. Louis, Missouri 63167 products and agricultural chemicals, since
Director since: 1994 1994. Vice President-International of FMC
Age 60. Corporation, a manufacturer of machinery and
chemical products, from 1990 to 1994.
Director, Kemper Group of Municipal Funds
and Boatmen's Trust Company.
* Ralph C. Joynes.......................... Retired Vice Chairman, President and Chief
3 John Christopher Court Operating Officer of USG Corporation,
Richmond, Virginia 23226 international manufacturer of building
Director since: 1988 materials and construction systems.
Age 68.
* Jean-Pierre Labruyere.................... Chairman and Chief Executive of Labruyere,
Societe Financiere Eberle, a financial holding company based in
Labruyere, Eberle France with global interests in many
70 Avenue Edouard-Herriot business areas including oil and gas
71003 Macon France importation and distribution and food
Director since: 1994 distribution, since 1972. Director, Promodes
Citizenship: French S.A. Martin Maurel Bank--Banque de France
Age 59. Adviser.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME, BUSINESS OR EMPLOYMENT AND MATERIAL
RESIDENCE ADDRESS, AGE OCCUPATIONS FOR PAST FIVE YEARS
---------------------- -------------------------------
<S> <C>
* L. Donald LaTorre........................ Retired President and Chief Operating
Engelhard Corporation Officer, Engelhard Corporation, a world-
101 Wood Avenue leading provider of environmental
Iselin, New Jersey 08830 technologies, specialty chemical products,
Director since: 1997 engineered materials and services, since
Age 59. January 31, 1997. President and Chief
Operating Officer from 1995 to 1997. Senior
Vice President and Chief Operating Officer
from 1990 to 1995. Director, Engelhard
Corporation and N.E. Chemcat Corp.
K. Thor Lundgren........................... Executive Vice President for Law and
Age 49. Government Affairs, Secretary and General
Counsel since December 1994; Senior Vice
President, General Counsel and Secretary
from 1991 to December 1994. Prior to joining
Parent in September 1991, Mr. Lundgren was a
partner with the law firm of Michael, Best &
Friedrich.
* Leonard E. Redon......................... President and Chief Executive Officer,
Eastman Kodak Company Qualex, Inc., a wholesale photoprocessor
343 State Street company headquartered in Durham, North
Rochester, New York 14650 Carolina. Vice President of Eastman Kodak
Director since: 1997 Company, a company engaged worldwide in
Age 45. developing, manufacturing and marketing
consumer and commercial imaging products,
and President, Customer Equipment Services
Division of Eastman Kodak, since 1995.
General Manager and Vice President of
Government and Education Markets from 1994
to 1995. General Manager and Vice President
of Markets Development, U.S. and Canada from
1991 to 1994.
* Donald Taylor............................ Principal in Sullivan Associates, specialists
Sullivan Associates in board of director searches, since 1992.
5215 North Ironwood Road, Suite 107 Managing Director-USA, ANATAR Investments
Milwaukee, Wisconsin 53217 Limited, a venture capital specialist, from
Director since: 1979 1990 to 1992. Director, Banta Corporation,
Age 69. Johnson Controls, Inc., Superior Services,
Inc. and The Enhancers, Inc.
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The directors of the
Purchaser are Jeffery T. Grade, John N. Hanson and Francis M. Corby, Jr. Mr.
Grade is the Chairman of the Board and President of the Purchaser, Mr. Hanson
is Vice President and Secretary, and Mr. Corby is Vice President and
Treasurer. Each director and officer was appointed or elected in April 1997.
Each of such persons is an officer and director of Parent. Additional
information regarding the directors and officers of the Purchaser is set forth
above.
I-3
<PAGE>
SCHEDULE II
SHARES HELD BY PARENT AND THE PURCHASER
I. TRANSACTIONS IN SHARES BY PARENT AND THE PURCHASER
Parent is the beneficial owner of an aggregate of 789,600 Shares, of which
the Purchaser is the record holder and beneficial owner of 1,000 Shares. All
of such Shares were purchased for cash in open market transactions as follows:
<TABLE>
<CAPTION>
SHARES PRICE PAID
TRANSACTION DATE PURCHASED PER SHARE*
---------------- --------- ----------
<S> <C> <C>
28-Feb-97............................................ 45,000 $13.8750
03-Mar-97............................................ 2,500 $13.6250
04-Mar-97............................................ 18,900 $13.6250
04-Mar-97............................................ 21,100 $13.7500
05-Mar-97............................................ 22,100 $13.7500
11-Mar-97............................................ 10,000 $14.0000
12-Mar-97............................................ 15,000 $14.0000
13-Mar-97............................................ 5,000 $14.0000
14-Mar-97............................................ 300,000 $14.1250
24-Mar-97............................................ 350,000 $14.5000
</TABLE>
--------
* Exclusive of commissions.
On April 15, 1997, Parent contributed to the Purchaser 1,000 Shares in
exchange for 1,000 shares of Common Stock, par value $.10 per share, of the
Purchaser.
II. TRANSACTIONS IN SHARES BY DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND
THE PURCHASER AND THE PARENT NOMINEES
Except as disclosed in this Schedule II, none of Parent, the Purchaser, any
of their respective directors or executive officers or the Parent Nominees
owns any securities of the Company or of any subsidiary of the Company,
beneficially or of record, has purchased or sold any of such securities within
the past two years or was within the past year a party to any contract,
arrangement or understanding with any person with respect to any such
securities. Except as disclosed in this Schedule II, to the knowledge of
Parent, no associate of Parent, the Purchaser, any of their respective
directors or executive officers or the Parent Nominees beneficially owns,
directly or indirectly, any securities of the Company.
To the knowledge of Parent, other than disclosed in the Proxy Statement or
this Schedule II, none of Parent, the Purchaser, any of their respective
directors or executive officers or the Parent Nominees has any substantial
interest, direct or indirect, by security holdings or otherwise, in any matter
to be acted upon at the Special Meeting.
None of the Parent Nominees has, during the last ten years, been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
II-1
<PAGE>
SCHEDULE III
PRINCIPAL SHAREHOLDERS OF THE COMPANY
AND SHAREHOLDINGS OF THE COMPANY'S MANAGEMENT
Set forth below is information regarding Shares owned by (i) directors and
executive officers of the Company and (ii) those persons owning more than 5%
of the outstanding Shares. Such information is obtained from the Company's
proxy statement for the Company's 1997 Annual Meeting of Shareholders, filed
with the Commission on March 21, 1997.
MANAGEMENT
(AS OF MARCH 1, 1997)
The following table sets forth information, as of March 1, 1997, regarding
beneficial ownership of Shares by each director, certain named executive
officers, and all of the directors, nominees and executive officers as a
group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP(1)(2) CLASS
------------------------ -------------------- ----------
<S> <C> <C>
John A. Becker.............................. 4,896 *
Joseph R. Coppola........................... 344,430(3) 1.0%
Ruth M. Davis............................... 2,696 *
Clyde H. Folley............................. 7,339(4)(5) *
Benjamin F. Garmer, III..................... 4,696 *
John W. Guffey, Jr.......................... 4,984 *
Marvin L. Isles............................. 110,000 *
Ben R. Stuart............................... 3,696 *
Heinz G. Anders............................. 88,000 *
Stephen M. Peterson......................... 87,517 *
Philip N. Ciarlo............................ 64,000 *
Richard C. Kleinfeldt....................... 125,566(6) *
All directors and executive officers
as a group (18 persons).................... 1,301,377 3.8%
</TABLE>
- --------
*Less than one percent.
(1) Includes the following Shares subject to stock options which are currently
exercisable or exercisable within 60 days of March 1, 1997: Mr. Becker,
2,000 Shares; Mr. Coppola, 291,000 Shares; Dr. Davis, 1,000 Shares; Mr.
Folley, 2,000 Shares; Mr. Garmer, 2,000 Shares; Mr. Stuart, 1,000 Shares;
Mr. Anders, 31,000 Shares; Mr. Peterson, 31,367 Shares; Mr. Ciarlo, 13,000
Shares; Mr. Kleinfeldt, 62,287 Shares; and all directors and executive
officers as a group, 623,334 Shares.
(2) Includes the following restricted Shares granted under either the
Company's 1989 Restricted Stock Plan or the Company's 1993 Stock and
Incentive Plan, over which the holders have sole voting but no investment
power: Mr. Becker, 1,696 Shares; Mr. Coppola, 357 Shares; Dr. Davis, 1,696
Shares; Mr. Folley, 1,339 Shares; Mr. Garmer, 1,696 Shares; Mr. Guffey,
984 Shares; Mr. Isles, 75,000 Shares; Mr. Stuart, 1,696 Shares; Mr.
Anders, 51,000 Shares; Mr. Peterson, 45,000 Shares; Mr. Ciarlo, 51,000
Shares; Mr. Kleinfeldt, 36,000 Shares; and all directors, nominees and
executive officers as a group, 498,064 Shares. The restricted Shares
reflected in the table include Shares granted to the executive officers in
February 1997.
(3) Mr. Coppola's current term as a director is scheduled to expire in April
1997.
(4) Mr. Folley's current term as a director is scheduled to expire in April
1997.
(5) Mr. Folley shares voting and investment power over 4,000 Shares with his
wife.
(6) Mr. Kleinfeldt retired as Vice President--Finance and as a director of the
Company in December 1996.
III-1
<PAGE>
OTHER BENEFICIAL OWNERS
The following table sets forth information, as of December 31, 1996,
regarding beneficial ownership by the only persons known to the Company as
disclosed in the Company Annual Meeting Proxy Statement to own more than 5% of
the outstanding Shares. The Annual Meeting Proxy Statement stated that the
beneficial ownership set forth below has been reported on filings made on
Schedule 13G with the Commission by the beneficial owners.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP
---------------------------------
VOTING POWER INVESTMENT POWER
---------------- ----------------
PERCENT
NAME AND ADDRESS OF OF
BENEFICIAL OWNER SOLE SHARED SOLE SHARED AGGREGATE CLASS
- ------------------- --------- ------ --------- ------ --------- -------
<S> <C> <C> <C> <C> <C> <C>
State of Wisconsin In-
vestment Board.......... 3,120,000 -0- 3,120,000 -0- 3,120,000 9.4%
P.O. Box 7842
Madison, Wisconsin 53707
Sanford C. Bernstein &
Co., Inc. .............. 1,446,450 27,950 1,710,200 -0- 1,710,200 5.2%
767 Fifth Avenue
New York, New York 10153
</TABLE>
III-2
<PAGE>
- -------------------------------------------------------------------------------
IMPORTANT
If your Shares are registered in your own name, you may mail or fax your
WHITE Written Demand (both sides) to Georgeson & Company, Inc. or Kissel-Blake
Inc. at their respective addresses or fax numbers listed below.
If your Shares are held in "street name" -- held by your brokerage firm or
bank -- immediately instruct your broker or bank representative to sign
Parent's WHITE Written Demand on your behalf.
If you have any questions concerning the tender offer material you have
previously received, or need assistance tendering your Shares pursuant to the
Offer, please call Kissel-Blake Inc. at the numbers listed below.
IF YOU HAVE ANY QUESTIONS REGARDING YOUR PROXY, OR NEED ASSISTANCE IN VOTING
YOUR SHARES, PLEASE CALL GEORGESON & COMPANY INC. AT THE NUMBERS LISTED BELOW.
GEORGESON
& COMPANY INC. KISSEL BLAKE INC.
Wall Street Plaza 110 Wall Street
New York, New York 10005 New York, New York 10005
Banks and Brokers Call Collect: Banks and Brokers Call: (212) 344-6733
(212) 440-9800 All Others Call Toll-Free:
All Others Call Toll-Free: (800) 554-7733
(800) 223-2064 Facsimile: (212) 809-1208
Facsimile:
- -------------------------------------------------------------------------------
<PAGE>
DEMAND TO CALL A SPECIAL MEETING
OF
GIDDINGS & LEWIS, INC.
THIS DEMAND IS SOLICITED BY
HARNISCHFEGER INDUSTRIES, INC. AND DSFA CORPORATION
To the Chairman of the Board, the
President and the Secretary of
Giddings & Lewis, Inc.:
The undersigned was the record holder (or is the duly authorized proxy or
other representative of one or more such record holders), as of , 1997, of
the number of shares of Common Stock, $.10 par value per share (the "Shares"),
of Giddings & Lewis, Inc. (the "Company") set forth below. In accordance with
Section 180.0702 of the Wisconsin Business Corporation Law and Section 2.03 of
the By-laws of the Company, the undersigned hereby demands that the Chairman
of the Board or the President of the Company call a Special Meeting of the
Company's shareholders (the "Special Meeting") as promptly as possible, but in
no event to be held later than the 100th day after the date that valid written
demands to call the Special Meeting by the holders of record as of the Demand
Record Date (as defined below) of shares representing at least 10% of all the
votes entitled to be cast on any issue proposed to be considered at the
Special Meeting are delivered to the Company. The undersigned is aware that
the Company's Board of Directors has fixed , 1997 (the "Demand Record
Date") as the record date to determine the shareholders entitled to make a
demand for the Special Meeting.
The purpose for which such meeting is to be held is to permit the
shareholders of the Company to consider and vote upon proposals (the
"Proposals") to:
(1) remove all of the current members of the Board of Directors of the
Company and any person or persons elected or designated prior to the
Special Meeting to fill any vacancy or newly created directorship;
(2) repeal each provision of the Company's By-laws or amendments thereto
(other than the amendment referred to in (3) below) adopted subsequent
to March 28, 1997, or adopted on or prior to that date but not filed by
the Company as an exhibit to any Current Report on Form 8-K, Quarterly
Report on Form 10-Q or Annual Report on Form 10-K of the Company on or
prior to March 28, 1997;
(3) amend Article III of the Company's By-laws to fix the number of
directors of the Company at three; and
(4) elect Jeffery T. Grade, John N. Hanson, and Francis M. Corby, Jr.
(together, the "Nominees") as the directors of the Company, effective
immediately, to hold office until the annual meeting of shareholders in
1998, 1999 and 2000, respectively, and until their respective
successors are elected and qualified.
DEMAND TO CALL A SPECIAL MEETING OF SHAREHOLDERS OF GIDDINGS & LEWIS, INC.
[_] FOR [_] AGAINST [_] ABSTAIN
HARNISCHFEGER AND DSFA STRONGLY RECOMMEND THAT YOU INDICATE YOUR SUPPORT FOR
THE CALL OF THE SPECIAL MEETING.
The undersigned is aware and acknowledges that by executing this demand it
agrees that, in the event the undersigned is or becomes a Soliciting
Shareholder (within the meaning assigned to such term in Section 2.03 of the
By-laws of the Company) with respect to the demand of the Special Meeting, the
undersigned agrees, jointly and severally with any other Soliciting
Shareholder, to pay the Company's costs of holding the Special Meeting,
including the costs of preparing and mailing proxy materials for the Company's
own solicitation (the "Company Costs"), provided that if each of the
resolutions introduced by any Soliciting Shareholder at the Special Meeting is
adopted, and each of the individuals nominated by or on behalf of any
Soliciting Shareholder for election as a director at the Special Meeting is
elected, then the undersigned shall not be obligated to pay such Company
Costs. The undersigned is aware and acknowledges that Harnischfeger
Industries, Inc. has agreed to pay any Company Costs required to be paid by
itself and any other Soliciting Shareholder pursuant to the relevant provision
of the By-laws of the Company and has agreed to reimburse in full the other
Soliciting Shareholders for any reasonable expenses incurred by such parties
in connection therewith.
(over)
<PAGE>
IF THIS WRITTEN DEMAND CARD IS EXECUTED AND RETURNED BUT NO INDICATION IS
MADE AS TO WHAT ACTION IS TO BE TAKEN, IT IS DEEMED TO CONSTITUTE A WRITTEN
DEMAND THAT GIDDINGS & LEWIS, INC. CALL THE SPECIAL MEETING.
Dated: ________________________, 1997
Please sign exactly as name appears
on this Written Demand card:
_____________________________________
(Signature)
_____________________________________
(Signature, if jointly held)
When Shares are held by joint ten-
ants, both should sign. When signing
as an attorney, executor, adminis-
trator, trustee or guardian, give
full title as such. If a corpora-
tion, sign in full corporate name by
President or other authorized offi-
cer. If a partnership, sign in part-
nership name by authorized person.
Name and address of record holder as
it appears in the Company's books:
Name: _______________________________
Address: ____________________________
_____________________________________
_____________________________________
_____________________________________
Number of shares of Common Stock, If this card is signed by a proxy or
$.10 par value per share, owned of other representative of the record
record by the record holder of the holder whose Shares are represented
Shares represented hereby: __________ hereby, name and address of such
proxy or representative:
Number of shares of Common Stock,
$.10 par value per share, owned ben- Name: _______________________________
eficially by the record holder of
the Shares represented hereby: ______
Address: ____________________________
_____________________________________
_____________________________________
If this card is signed by a proxy or _____________________________________
other representative of the record
holder whose Shares are represented
hereby, number of shares of Common
Stock, $.10 par value per share,
votable by proxy (by such proxy or
other representative) from the rec-
ord holder and with respect to which
instruction(s) to execute Written
Demands have been received from the
beneficial owner(s) thereof: ________
PLEASE COMPLETE, SIGN, DATE AND MAIL PROMPTLY!
<PAGE>
Exhibit (g)(2)
PRELIMINARY PROXY STATEMENT.
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 28, 1997.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [_]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
GIDDINGS & LEWIS, INC.
(Name of Registrant as Specified in its Charter)
HARNISCHFEGER INDUSTRIES, INC.
and
DSFA CORPORATION
(Name of Persons Filing Proxy Statement)
----------------
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
[_] Fee paid previously with preliminary materials:
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PRELIMINARY PROXY MATERIALS DATED APRIL 28, 1997
SUBJECT TO COMPLETION
The information included herein is as it is expected to be when the
definitive proxy statement is mailed to shareholders of Giddings & Lewis, Inc.
This proxy statement will be revised to reflect actual facts at the time of
filing of the definitive proxy statement.
PROXY STATEMENT
OF
HARNISCHFEGER INDUSTRIES, INC.
AND
DSFA CORPORATION
---------------
SPECIAL MEETING OF SHAREHOLDERS
OF GIDDINGS & LEWIS, INC.
TO BE HELD , 1997
INTRODUCTION
This Proxy Statement and the accompanying GOLD-STRIPED Special Meeting proxy
card are being furnished to holders of outstanding shares of Common Stock,
$.10 par value per share ("Shares"), of Giddings & Lewis, Inc., a Wisconsin
corporation (the "Company"), in connection with the solicitation of proxies
from holders of Shares by Harnischfeger Industries, Inc., a Delaware
corporation ("Parent" or "Harnischfeger"), and DSFA Corporation, a newly
formed Delaware corporation and a wholly owned subsidiary of Parent (the
"Purchaser"), to be used at a special meeting of shareholders of the Company
to be held at on , 1997, at and at any adjournments or
postponements thereof (the "Special Meeting"). The Special Meeting has been
called for the purpose of considering and voting on proposals (together, the
"Special Meeting Proposals") to:
(1) remove all of the current members of the Board of Directors of the
Company (the "Company Board") and any person or persons elected or
designated prior to the Special Meeting to fill any vacancy or newly
created directorship;
(2) repeal each provision of the Company's By-laws (the "Company By-
laws") or amendments thereto (other than the amendment referred to in (3)
below) adopted subsequent to March 28, 1997, or adopted on or prior to that
date but not filed by the Company as an exhibit to any Current Report on
Form 8-K, Quarterly Report on Form 10-Q or Annual Report on Form 10-K of
the Company on or prior to March 28, 1997;
(3) amend Article III of the Company By-laws to fix the number of
directors of the Company at three; and
(4) elect Jeffery T. Grade, John N. Hanson, and Francis M. Corby, Jr.
(together, the "Parent Nominees") as the directors of the Company,
effective immediately, to hold office until the annual meeting of
shareholders in 1998, 1999 and 2000, respectively, and until their
respective successors are elected and qualified.
On April 28, 1997, the Purchaser commenced a tender offer to purchase all
outstanding Shares (and associated Rights (as defined below)) at a price of
$19 per Share (and associated Right), net to the seller in cash, upon the
terms and subject to the conditions set forth in an Offer to Purchase dated
April 28, 1997 (the "Offer to Purchase") and in the related Letter of
Transmittal (the "Letter of Transmittal") (which, as either may be amended
from time to time, together constitute the "Offer"). Parent and the Purchaser
have also proposed that, following completion of the Offer, the Purchaser
would effect a merger with the Company (the "Proposed Merger") in which
holders of any remaining Shares would receive the same price per Share as the
price per Share to be paid in the Offer. The purpose of the Offer and the
Proposed Merger is to enable Parent to acquire control of, and the entire
equity interest in, the Company. The Special Meeting Proposals are intended to
facilitate and expedite the consummation of the Offer and the Proposed Merger
by removing the Company's current directors and replacing them with the Parent
Nominees, all of whom are committed, subject to their fiduciary duties, to,
among other things, giving the Company's shareholders the opportunity to
receive the consideration for the Shares contemplated by the Offer and the
Proposed Merger, as described more fully below. As used herein, unless the
context otherwise requires, the term "Shares" shall include the associated
preferred share purchase rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of August 23, 1995 (the "Rights Agreement"), between the
Company and Firstar Trust Company, as rights agent. The principal executive
offices of the Company are located at 142 Doty Street, Fond du Lac, Wisconsin
54935.
<PAGE>
THE PARENT NOMINEES ARE COMMITTED, SUBJECT TO THEIR FIDUCIARY DUTIES, TO
GIVING YOU, AS THE OWNERS OF THE COMPANY, THE OPPORTUNITY TO ACCEPT THE
PURCHASER'S PENDING OFFER AND RECEIVE $19 IN CASH FOR YOUR SHARES PURSUANT TO
THE OFFER.
COMPLETING, SIGNING, DATING AND RETURNING THE ENCLOSED GOLD-STRIPED PROXY
CARD WILL HELP ENABLE YOU, AS THE OWNERS OF THE COMPANY, TO DECIDE WHETHER YOU
WILL HAVE THE OPPORTUNITY TO SELL YOUR SHARES TO THE PURCHASER FOR $19 PER
SHARE IN CASH PURSUANT TO ITS PENDING OFFER. ACCORDINGLY, PARENT AND THE
PURCHASER URGE YOU TO COMPLETE, SIGN AND DATE THE ENCLOSED GOLD-STRIPED PROXY
CARD AND RETURN IT IN THE ENCLOSED, PRE-ADDRESSED ENVELOPE IMMEDIATELY.
The Special Meeting has been called pursuant to demands made therefor in
accordance with the Wisconsin Business Corporation Law (the "WBCL") and the
Company By-laws by holders of in excess of 10% of the outstanding Shares.
Parent and the Purchaser initiated the solicitation of such demands.
Pursuant to the Company's Restated Articles of Incorporation, as heretofore
amended (the "Company Charter"), any director of the Company may be removed
from office with or without cause by the affirmative vote of shareholders
holding at least 66 2/3% of the voting power of the then outstanding shares of
all classes of capital stock of the Company generally possessing voting rights
in the election of directors, voting together as a single class. Pursuant to
the Company Charter, the same vote also is required to amend the Company By-
laws to fix the number of directors of the Company at three. According to the
Company's Annual Report on Form 10-K for the Fiscal Year Ended December 31,
1996 (the "Company 10-K"), there were 33,186,898 Shares outstanding as of
March 10, 1997 and, as of December 31, 1996, there were outstanding pursuant
to one or more of the Company's stock or option or other incentive plans (the
"Company Plans") options to purchase 1,105,712 Shares, 576,271 of which were
exercisable as of such date. According to the Company's Proxy Statement dated
as of March 21, 1997 filed with the Securities and Exchange Commission (the
"Commission") in connection with the Company's Annual Meeting of Shareholders
to be held April 30, 1997, on March 13, 1997, certain members of the Company's
senior management team and other key employees purchased an aggregate of
282,355 Shares upon the exercise of options in connection with the Company's
Management Stock Purchase Program (the "MSPP") adopted by the Company that
same day. According to the Company's publicly filed documents, the Company has
no class of capital stock issued and outstanding as of the date hereof other
than the Shares.
Based upon the foregoing, assuming no options have been issued or exercised
since December 31, 1996 (other than options exercised in connection with the
MSPP, which are assumed to have been issued on the date of exercise) or will
be issued or exercised prior to the date fixed for the purpose of determining
the holders of Shares who are entitled to notice of and to vote at the Special
Meeting (the "Special Meeting Record Date"), and assuming no Shares have been
issued or cancelled since December 31, 1996 (other than Shares issued upon the
exercise of options in connection with the MSPP) or will be issued or
cancelled prior to the Special Meeting Record Date, proxies representing
affirmative votes from the holders of at least 21,523,236 Shares (excluding
the 789,600 Shares owned by Parent and the Purchaser), representing (when
added to the Shares owned by Parent and the Purchaser) 66 2/3% of the total
number of Shares outstanding, must be received by Parent and the Purchaser in
order to obtain the necessary vote to approve the first and third Special
Meeting Proposals. The actual number of affirmative votes that must be
received by Parent and the Purchaser and cast at the Special Meeting will
depend on the number of Shares issued and outstanding on the Special Meeting
Record Date. See "Special Meeting Proposals; Required Vote" below for the vote
required to approve each individual Special Meeting Proposal. For purposes of
these calculations, the Purchaser has assumed that the Shares issued in
connection with the MSPP are outstanding; however, Parent has asserted in
litigation against the Company that as a result of the Company's economic
interest in the Shares nominally owned by individual executives (as disclosed
in the Company's publicly filed documents), Shares issued in connection with
the MSPP are not, for certain purposes, outstanding, but are instead treasury
stock that may not be voted and may not be counted toward certain
calculations, including the calculation of the number of votes required to
approve a motion or elect directors at a meeting of shareholders. See Section
15 of the Offer to Purchase. Any assumptions made herein are made without
prejudice to the Purchaser's position with respect to such issue.
THIS SOLICITATION IS BEING MADE BY PARENT AND THE PURCHASER AND NOT ON
BEHALF OF THE COMPANY'S BOARD OF DIRECTORS.
----------------
ii
<PAGE>
IMPORTANT
THE CALLING OF THE SPECIAL MEETING AND THE ELECTION OF THE PARENT NOMINEES
TO THE COMPANY BOARD WILL FACILITATE THE OFFER AND PROPOSED MERGER. IF YOU
WANT THE OPPORTUNITY TO RECEIVE THE CONSIDERATION CONTEMPLATED BY THE OFFER
AND THE PROPOSED MERGER, WE URGE YOU TO PROMPTLY COMPLETE, SIGN, DATE AND MAIL
THE ENCLOSED GOLD-STRIPED PROXY CARD. FAILURE TO COMPLETE, SIGN, DATE AND MAIL
A GOLD-STRIPED PROXY CARD HAS THE SAME EFFECT AS VOTING AGAINST CERTAIN OF THE
SPECIAL MEETING PROPOSALS.
Proxies should be delivered as promptly as possible, but in no event later
than the Special Meeting, by fax (both sides) or by mail (using the enclosed
envelope), to either of Parent's information agents, Georgeson & Company Inc.
("Georgeson") and Kissel-Blake Inc. ("Kissel-Blake", and together with
Georgeson, the "Information Agents"). Georgeson's address is Wall Street
Plaza, New York, New York 10005. Kissel-Blake's address is 110 Wall Street,
New York, New York 10005.
IMPORTANT NOTE: IF ANY OF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE
FIRM, BANK, BANK NOMINEE OR OTHER NOMINEE, ONLY IT CAN EXECUTE A PROXY FOR
SUCH SHARES AND WILL DO SO ONLY UPON RECEIPT OF YOUR SPECIFIC INSTRUCTIONS.
ACCORDINGLY, PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND IN-
STRUCT THAT PERSON TO EXECUTE THE GOLD-STRIPED SPECIAL MEETING PROXY.
This Proxy Statement is dated , 1997. This Proxy Statement and
accompanying GOLD-STRIPED Special Meeting proxy card are first being furnished
to Company shareholders on or about , 1997.
If you have any questions concerning the tender offer material you have
previously received, or need assistance tendering your Shares pursuant to the
Offer, please call Kissel-Blake at one of the following numbers; banks and
brokers call (212) 344-6733, all others call toll-free (800) 554-7733.
IF YOU HAVE ANY QUESTIONS REGARDING YOUR PROXY, OR NEED ASSISTANCE IN VOTING
YOUR SHARES, PLEASE CALL:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
Facsimile:
iii
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REASONS TO VOTE FOR REMOVAL OF
THE CURRENT DIRECTORS OF THE COMPANY AND
FOR ELECTION OF THE PARENT NOMINEES
The Purchaser commenced its Offer to purchase all outstanding Shares at a
price of $19 per Share (and associated Right), in cash, on April 28, 1997. The
purpose of the Offer and the Proposed Merger is to enable the Purchaser to
acquire control of, and the entire equity interest in, the Company. The Offer,
as the first step in the acquisition of the Company, is intended to facilitate
the acquisition of all outstanding Shares. The Proposed Merger, as the second
step in the acquisition of the Company, is intended to facilitate the
acquisition of any Shares not acquired by the Purchaser in the Offer. The
purpose of the Special Meeting is to allow the shareholders of the Company to
act to remove certain obstacles to Parent's and the Purchaser's ability and
willingness to consummate the Offer and the Proposed Merger.
OBSTACLES TO THE OFFER
There are a number of obstacles to Parent's ability to consummate the Offer
and the Proposed Merger, which can be removed, absent the cooperation of the
Company's current Board of Directors, by the approval by the Company's
shareholders of the Special Meeting Proposals at the Special Meeting or at
another duly called and held special or annual meeting of the Company's
shareholders. These obstacles include the Company's "poison pill" Rights
Agreement and certain provisions of the WBCL restricting business
combinations, such as the Proposed Merger, that have not been approved by the
Company Board. To date, the Company Board has refused to remove these
obstacles to permit you, as the shareholders of the Company, to have the
opportunity to determine the future of your Company and your investment.
Rights Agreement. According to the Company 10-K and the Company's
Registration Statement on Form 8-A dated August 23, 1995 (the "Company 8-A"),
on August 23, 1995 the Company adopted the Rights Agreement and the Company
Board declared a dividend of one Right for each outstanding Share. The Rights
are described in the Company 8-A, and such description of the Rights is
summarized in Section 8 of the Offer to Purchase.
According to the Company 8-A, under the Rights Agreement, if the Purchaser
were to acquire 20% or more of the Shares, unless the Rights were previously
redeemed or invalidated or were otherwise rendered inapplicable to the Offer,
each holder of record of a Right (other than the Purchaser) would have the
right to receive Shares having a fair market value (calculated as provided in
the Rights Agreement) equal to twice the exercise price for such Rights. As a
result, the Rights could severely dilute the Purchaser's equity interest in
the Company and its voting power and thereby make the Purchaser's acquisition
of the Company prohibitively expensive.
However, the Company 8-A states that, under the Rights Agreement, the
Company Board may redeem the Rights in whole, but not in part, at a price of
$.01 per Right at any time prior to a person becoming an "Acquiring Person",
as defined in the Rights Agreement (generally, a person or group that becomes
the beneficial owner of 20% or more of the Shares). In addition, the Company
8-A also states that, other than provisions relating to the principal economic
terms of the Rights, the terms of the Rights may be amended by the Company
Board without the consent of the holders of the Rights, except that from and
after the Distribution Date (as defined in the Rights Agreement and in the
Offer to Purchase), no such amendment may adversely affect the interests of
the holders of the Rights.
Business Combination Prohibition. Section 180.1141 of the WBCL ("Section
180.1141") prohibits certain business combinations and other transactions
(each, a "Section 180.1141 Transaction"), such as the Proposed Merger, between
a Wisconsin resident domestic corporation (such as the Company) and any
"Interested Stockholder" (defined generally as any person that, directly or
indirectly, owns or, subject to certain exceptions, has the right to exercise
10% or more of the voting power of the outstanding voting stock of a Wisconsin
resident domestic corporation) for a period of three years after the date the
person becomes an Interested Stockholder. After such three year period, a
Section 180.1141 Transaction between a Wisconsin
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resident domestic corporation and such Interested Stockholder is prohibited
unless (a) certain "fair price" provisions are complied with, (b) the Section
180.1141 Transaction is approved by the affirmative vote of the holders of a
majority of the voting stock not beneficially owned by the Interested
Stockholder or (c) the acquisition of stock resulting in such stockholder
becoming an Interested Stockholder was approved by the corporation's board of
directors prior to the relevant acquisition date.
The Section 180.1141 restrictions do not apply to a Section 180.1141
Transaction with an Interested Stockholder within three years of the date such
stockholder became an Interested Stockholder if either (x) the Interested
Stockholder's acquisition of the corporation's shares on the date the
Interested Stockholder became an Interested Stockholder or (y) the Section
180.1141 Transaction, is approved by the board of directors of the corporation
prior to the date on which the Interested Stockholder became an Interested
Stockholder.
EFFECT OF REMOVAL OF CURRENT DIRECTORS AND ELECTION OF PARENT NOMINEES
The potential effects of the Rights Agreement and Section 180.1141 prevent
Parent and the Purchaser from completing the Offer and the Proposed Merger,
absent the requisite action of the Company Board. To date, the Company Board
has refused to remove these obstacles to permit you, as the shareholders of
the Company, to have the opportunity to determine the future of your Company
and your investment. Parent and the Purchaser initiated the demand of the call
of the Special Meeting so that the Company's shareholders will have the
opportunity to consider and vote upon the Special Meeting Proposals, which
would result in the removal of all of the current members of the Company Board
and in the election of the Parent Nominees as the directors of the Company.
Parent and the Purchaser intend, after removal and replacement of the Company
Board, to enter into a merger agreement with the Company providing for the
acquisition of the Shares by the Purchaser as contemplated by the Offer and
the Proposed Merger. The Proposed Merger could be made available to the
Company's shareholders, in accordance with Section 180.1141 and without the
Rights being exercisable, with the approval of the Company Board.
THE PARENT NOMINEES WILL, IF ELECTED, SUBJECT TO THEIR FIDUCIARY DUTIES, AS
DESCRIBED BELOW, BE ABLE TO ACT TO REDEEM THE RIGHTS OR OTHERWISE MAKE THEM
INAPPLICABLE TO THE OFFER AND THE PROPOSED MERGER AND TO APPROVE THE OFFER AND
THE PROPOSED MERGER UNDER SECTION 180.1141 AND TO TAKE SUCH OTHER ACTIONS AS
MAY BE NECESSARY TO GIVE ALL OF THE COMPANY'S SHAREHOLDERS THE OPPORTUNITY TO
ACCEPT THE PURCHASER'S PENDING OFFER AND RECEIVE $19 FOR EACH OF THEIR SHARES.
ACCORDINGLY, A VOTE FOR THE PARENT NOMINEES WILL ENHANCE YOUR CHANCES OF BEING
ABLE TO TAKE ADVANTAGE OF THE OFFER.
CONDITIONS OF THE OFFER
Because of the potential effects of the Rights Agreement and Section
180.1141, the Purchaser's ability and willingness to accept for payment Shares
tendered to it in the Offer, and to consummate the Proposed Merger, are
subject to certain terms and conditions, including (1) the Rights having been
redeemed by the Company Board or the Purchaser being satisfied, in its
reasonable judgment, that the Rights have been invalidated or are otherwise
inapplicable to the Offer and the Proposed Merger (the "Rights Condition"),
and (2) the Purchaser being satisfied, in its reasonable judgment, that the
restrictions contained in Section 180.1141 will not apply to the acquisition
of Shares pursuant to the Offer or to the Proposed Merger (the "Business
Combination Condition"). Each of the Rights Condition and the Business
Combination Condition is likely to be satisfied if the Special Meeting
Proposals are approved and the current directors of the Company are removed
and replaced by the Parent Nominees.
The Offer is also subject to the condition that there must be validly
tendered prior to expiration of the Offer and not properly withdrawn a number
of Shares (the "Minimum Number of Shares") which, when added to the Shares
beneficially owned by the Purchaser and its affiliates, constitutes at least a
majority of the total voting power of all shares of capital stock of the
Company outstanding on a fully diluted basis on the date of purchase (the
"Minimum Condition"). For purposes of the Offer, "on a fully diluted basis"
means, as of any date, the number of Shares outstanding, together with Shares
that the Company could then be required to issue pursuant
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to options outstanding at that date under the Company Plans (assuming all such
options are then exercisable) or otherwise (other than in connection with the
Rights Agreement). Based on publicly available information filed by the
Company with the Commission, and on certain assumptions set forth in the Offer
to Purchase, the Minimum Number of Shares would be approximately 16,497,833.
The actual Minimum Number of Shares will depend upon the facts as they exist
on the date of purchase. For purposes of the foregoing calculations, the
Purchaser has assumed that the Shares issued in connection with the MSPP are
outstanding; however, Parent has asserted in litigation against the Company
that as a result of the Company's economic interest in the Shares nominally
owned by individual executives (as disclosed in the Company's publicly filed
documents), Shares issued in connection with the MSPP are not, for certain
purposes, outstanding, but are instead treasury stock that may not be voted
and may not be counted toward certain calculations, including the calculation
of the number of votes required to approve a motion or elect directors at a
meeting of shareholders. See Section 15 of the Offer to Purchase. Any
assumptions made herein are made without prejudice to the Purchaser's position
with respect to such issue.
Certain other conditions to the Offer are described in Section 14 of the
Offer to Purchase. Subject to the applicable rules of the Commission, the
Purchaser expressly reserves the right, in its sole discretion, to waive any
one or more of the conditions to the Offer.
A copy of the Tender Offer Statement on Schedule 14D-1, which was filed by
the Purchaser and Parent with the Commission on April 28, 1997, and all
amendments thereto, may be obtained by mail from the Commission, upon payment
of the Commission's customary charges, by writing to its principal office at
450 Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington, D.C. 20549.
Such material is also available for inspection and copying at the principal
office of the Commission at the address set forth immediately above, and at
the Commission's regional offices at Seven World Trade Center, 13th Floor, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. The Commission also maintains an Internet site on the
World Wide Web at <http://www.sec.gov> that contains reports, proxy statements
and other information. The information also should be available at The Nasdaq
Stock Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
IF YOU BELIEVE THAT YOU SHOULD HAVE THE OPPORTUNITY TO DECIDE THE FUTURE OF
YOUR COMPANY AND TO RECEIVE $19 NET PER SHARE IN CASH FOR ALL OF YOUR SHARES,
PARENT AND THE PURCHASER URGE YOU TO COMPLETE, SIGN, DATE AND RETURN YOUR
GOLD-STRIPED PROXY CARD PROMPTLY.
APPROVING THE SPECIAL MEETING PROPOSALS AT THE SPECIAL MEETING WILL BE AN
IMPORTANT STEP IN SECURING THE CONSUMMATION OF THE OFFER AND THE PROPOSED
MERGER. HOWEVER, YOU MUST TENDER YOUR SHARES PURSUANT TO THE OFFER IF YOU WISH
TO PARTICIPATE IN THE OFFER. YOUR EXECUTION OF THE GOLD-STRIPED PROXY CARD
DOES NOT OBLIGATE YOU TO TENDER YOUR SHARES PURSUANT TO THE OFFER, AND YOUR
FAILURE TO EXECUTE THE GOLD-STRIPED PROXY CARD DOES NOT PREVENT YOU FROM
TENDERING YOUR SHARES PURSUANT TO THE OFFER.
Parent intends to continue to seek to negotiate with the Company with
respect to the acquisition of the Company. If such negotiations result in a
definitive merger agreement between the Company and Parent, certain material
terms of the Offer may change and Parent may elect not to proceed with any
solicitation of proxies for use at the Special Meeting. Accordingly, such
negotiations could result in, among other things, termination or amendment of
the Offer and/or submission of a different acquisition proposal to the
Company's shareholders for their approval.
If the Purchaser should terminate or materially amend the terms of the Offer
prior to the Special Meeting, Parent or the Purchaser will disseminate such
information regarding such changes to the Company's shareholders and, in
appropriate circumstances, will provide the Company's shareholders with a
reasonable opportunity to revoke their proxies prior to the Special Meeting.
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<PAGE>
SPECIAL MEETING PROPOSALS; REQUIRED VOTE
At the Special Meeting, Parent and the Purchaser intend to present the
following resolutions for adoption by the Company's shareholders, in the order
set forth below.
(1) REMOVAL OF ALL CURRENT DIRECTORS. The text of the first resolution
proposed by Parent and the Purchaser for adoption at the Special Meeting by
the Company's shareholders reads as follows:
"RESOLVED, that all of the directors of the Company, including Marvin L.
Isles, Ben R. Stuart, John A. Becker, John W. Guffey, Jr., Ruth M. Davis,
and Benjamin F. Garmer, III, and any other person who is a director of the
Company at the time this resolution takes effect, be, and all of them
hereby are, removed from such office, effective immediately."
According to the Company Charter, approval of this resolution requires the
affirmative vote of holders of at least 66 2/3% of the voting power of the
then outstanding shares of all classes of capital stock of the Company
generally possessing voting rights in the election of directors, voting
together as a single class.
(2) REPEAL OF LATER-ADOPTED BY-LAWS. The text of the second resolution
proposed by Parent and the Purchaser for adoption at the Special Meeting by
the Company's shareholders reads as follows:
"RESOLVED, that each and every provision of the By-laws of the Company and
each and every amendment thereto (other than the amendment proposed by the
proponent of this resolution at the meeting of the Company's shareholders
at which this resolution is adopted) adopted subsequent to March 28, 1997,
or adopted on or prior to that date but not filed by the Company as an
exhibit to any Current Report on Form 8-K, Quarterly Report on Form 10-Q or
Annual Report on Form 10-K of the Company on or prior to March 28, 1997,
be, and each of them hereby is, repealed and of no effect."
According to the Company By-laws, this resolution will be approved if the
number of votes cast in favor of the resolution exceeds the number of votes
cast in opposition to the resolution; provided that, pursuant to the Company
Charter, to the extent this amendment affects Section 3.01 of the Company By-
laws (relating to the powers, number and tenure of directors) or Article IX of
the Company By-laws (relating to the indemnification of officers and
directors), the affirmative vote of holders of at least 66 2/3% of the voting
power of the then outstanding shares of all classes of capital stock of the
Company generally possessing voting rights in the election of directors,
voting together as a single class, shall be required. March 28, 1997 is the
filing date of the Company 10-K with the Commission.
(3) REDUCTION IN THE NUMBER OF DIRECTORS. The text of the third resolution
proposed by Parent and the Purchaser for adoption at the Special Meeting by
the Company's shareholders reads as follows:
"RESOLVED, that the By-laws of the Company be amended, effective
immediately, to delete the first sentence of paragraph (b) of Section 3.01
of Article III thereof in its entirety and to replace such sentence with
the following language:
"(b) The number of directors of the Corporation shall be three (3),
divided into three (3) classes of one (1), one (1) and one (1)
director, respectively."
According to the Company Charter, approval of this resolution requires the
affirmative vote of holders of at least 66 2/3% of the voting power of the
then outstanding shares of all classes of capital stock of the Company
generally possessing voting rights in the election of directors, voting
together as a single class.
(4) ELECTION OF PARENT NOMINEES. Parent and the Purchaser intend to propose
at the Special Meeting that, following the removal of all incumbent directors
of the Company from office and the reduction of the size of the Company Board
to three, the shareholders of the Company elect the three Parent Nominees
named below as directors of the Company to fill the vacancies created by the
removal of such incumbent directors and such reduction in the size of the
Company Board. The text of the fourth resolution proposed by Parent and the
Purchaser for adoption at the Special Meeting by the Company's shareholders
reads as follows:
"RESOLVED, that the shareholders of the Company hereby elect Jeffery T.
Grade, John N. Hanson, and Francis M. Corby, Jr. as directors of the
Company, effective immediately, to hold office until the annual meeting of
shareholders in 1998, 1999 and 2000, respectively, and until their
respective successors are elected and qualified."
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<PAGE>
According to the WBCL and the Company By-laws, each Parent Nominee to be
elected will be elected by a plurality of the votes cast by the Shares
entitled to vote at the Special Meeting (assuming a quorum is present).
Parent's and the Purchaser's primary purpose in seeking to elect the Parent
Nominees to the Company Board is to obtain the redemption of the Rights (or
the amendment of the Rights Agreement to make the Rights inapplicable to the
Offer and the Proposed Merger) and the approval of the Offer and the Proposed
Merger under Section 180.1141, thereby facilitating the consummation of the
Offer and the Proposed Merger. However, if elected the Parent Nominees would
be responsible for managing the business and affairs of the Company. Each
director has an obligation under applicable law to discharge his duties as a
director on an informed basis, in good faith, with the care an ordinarily
careful and prudent person in a like position would exercise under similar
circumstances and in a manner the director honestly believes to be in the best
interests of the Company. Accordingly, circumstances may arise in which the
interests of Parent, the Purchaser, and their affiliates, on the one hand, and
the interests of other shareholders of the Company, on the other hand, may
differ. In any such case, the Parent Nominees intend to discharge fully their
obligations under applicable law.
THE PARENT NOMINEES ARE COMMITTED, SUBJECT TO THEIR FIDUCIARY DUTIES, TO
GIVING YOU, AS THE OWNERS OF THE COMPANY, THE OPPORTUNITY TO ACCEPT THE
PURCHASER'S PENDING OFFER TO RECEIVE $19 PER SHARE IN CASH FOR YOUR SHARES
PURSUANT TO THE OFFER.
The Parent Nominees have furnished the following information concerning
their principal occupations or employment and certain other matters. Jeffery
T. Grade, John N. Hanson, and Francis M. Corby, Jr., if elected, would hold
office until the Company's Annual Meeting of Shareholders in 1998, 1999 and
2000, respectively, and until a successor has been elected and qualified.
NAME, AGE AND PRINCIPAL OCCUPATION AND
DATE OF ELECTION TO BUSINESS EXPERIENCE
PRESENT POSITIONS DURING LAST FIVE YEARS
------------------- ------------------------
Jeffery T. Grade..................... Chairman and Chief Executive Officer
Director of Parent since: 1983 of Parent since 1993. Chairman of the
Director of the Purchaser since: Board and President of the Purchaser
April 1997 since April 1997. President and Chief
Age 53. Executive Officer of Parent from 1992
to 1993. President and Chief
Operating Officer of Parent from 1986
to 1992. Director, Case Corporation
and Coeur D'Alene Mines Corporation.
John N. Hanson....................... President and Chief Operating Officer
Director of Parent since: 1996 of Parent since 1996. Vice President
Director of the Purchaser since: and Secretary of the Purchaser since
April 1997 April 1997. Executive Vice President
Age 55. and Chief Operating Officer of Parent
from 1995 to 1996. President and
Chief Executive Officer of Joy
Technologies Inc. from 1994 to 1995.
President, Chief Operating Officer
and Director of Joy Technologies Inc.
from 1990 to 1995. Director, Schuller
Corporation.
Francis M. Corby, Jr................. Executive Vice President for Finance
Director of Parent since: 1996 and Administration and Chief
Director of the Purchaser since: Financial Officer of Parent since
April 1997 1995. Vice President and Treasurer of
Age 53. the Purchaser since April 1997.
Senior Vice President, Finance and
Chief Financial Officer of Parent
from 1986 to 1995.
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The business address of each Parent Nominee is 3600 South Lake Drive, St.
Francis, Wisconsin 53235. Each of the Parent Nominees is a citizen of the
United States.
Each of the Parent Nominees has consented to serve as a director of the
Company, if elected. Parent and the Purchaser do not expect that any of the
Parent Nominees will be unable to stand for election if the Special Meeting is
held, but, in the event that any vacancy in the Parent Nominees should occur,
Parent will name a substitute nominee. In addition, Parent reserves the right
(i) to nominate additional nominees to fill any director positions created by
the Company Board prior to or at the Special Meeting, and (ii) to nominate or
substitute additional persons if the Company makes or announces any changes to
the Company By-laws or takes or announces any other action that has, or if
consummated would have, the effect of disqualifying any or all of the Parent
Nominees.
According to the Company's publicly filed documents, non-employee directors
of the Company generally are eligible to receive an annual fee and an
additional fee for each meeting of the Company Board attended, along with
certain stock incentive benefits, in accordance with the policies of the
Company; however, each Parent Nominee has indicated that he intends to forego
such fees and stock incentive benefits, if elected. In addition, each of the
Parent Nominees is and is expected to continue to be an employee of Parent,
and, as such, will continue to receive his normal compensation in connection
with such employment. The Parent Nominees, if elected, will be indemnified by
the Company for service as a director of the Company to the extent
indemnification is provided to the directors of the Company under the Company
Charter, the Company By-laws, the WBCL and any other customary practices and
policies. In addition, Parent has agreed to indemnify the Parent Nominees
against certain claims, damages and expenses arising from their standing for
election at the Special Meeting. Schedule II sets forth certain additional
information concerning the Parent Nominees as well as certain information
regarding ownership of Shares by Parent, the Purchaser and the Parent
Nominees.
In accordance with applicable regulations of the Commission, the GOLD-
STRIPED proxy card affords each shareholder the opportunity to designate the
names of any of the Parent Nominees whom such shareholder does not desire to
elect. Notwithstanding the foregoing, Parent and the Purchaser recommend that
shareholders vote FOR all of the Parent Nominees.
PARENT AND THE PURCHASER STRONGLY RECOMMEND A VOTE FOR REMOVAL OF THE
INCUMBENT DIRECTORS OF THE COMPANY, FOR THE AMENDMENTS TO THE COMPANY BY-LAWS
AND FOR THE ELECTION OF THE PARENT NOMINEES.
IF EACH OF THE SPECIAL MEETING PROPOSALS IS NOT APPROVED BY THE COMPANY'S
SHAREHOLDERS, AND AS A RESULT CERTAIN CONDITIONS TO THE OFFER ARE NOT
SATISFIED, PARENT AND THE PURCHASER MAY EITHER (I) TERMINATE THE OFFER OR (II)
CONTINUE TO PURSUE THE OFFER AND THE SATISFACTION OF THE CONDITIONS TO THE
OFFER THROUGH NEGOTIATION, LITIGATION AND OTHER MEANS.
Shareholders will have no appraisal or similar rights of dissent with
respect to the Special Meeting Proposals.
VOTING AT THE SPECIAL MEETING
The Company Charter provides that holders of Shares are entitled to one vote
for each Share held by them on all matters brought before the Company's
shareholders for a vote, including each of the Special Meeting Proposals.
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<PAGE>
PROXY PROCEDURES
On , 1997, the Company Board announced that , 1997, would be the
Special Meeting Record Date. Only holders of record as of the close of
business on the Special Meeting Record Date will be entitled to vote at the
Special Meeting. If you are a shareholder of record on the Special Meeting
Record Date, you will retain your voting rights for the Special Meeting even
if you sell your Shares after the Special Meeting Record Date or if you tender
your Shares, before or after the Special Meeting Record Date, pursuant to the
Offer. The tender of Shares pursuant to the Offer does not constitute the
grant to the Purchaser of a proxy or any voting rights with respect to the
tendered Shares until such time as such Shares are accepted for payment by the
Purchaser. ACCORDINGLY, IT IS IMPORTANT THAT YOU VOTE THE SHARES HELD BY YOU
ON THE SPECIAL MEETING RECORD DATE OR GRANT A PROXY TO VOTE SUCH SHARES ON THE
GOLD-STRIPED SPECIAL MEETING PROXY CARD, EVEN IF YOU SELL SUCH SHARES AFTER
THE SPECIAL MEETING RECORD DATE OR TENDER SUCH SHARES PURSUANT TO THE OFFER.
IN ORDER FOR YOUR VIEWS ON THE SPECIAL MEETING PROPOSALS TO BE REPRESENTED
AT THE SPECIAL MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED GOLD-
STRIPED SPECIAL MEETING PROXY CARD AND RETURN IT TO PARENT, C/O GEORGESON OR
KISSEL-BLAKE, IN THE ENCLOSED ENVELOPE IN TIME TO BE VOTED AT THE SPECIAL
MEETING. Execution of the GOLD-STRIPED Special Meeting proxy card will not
affect your right to attend the Special Meeting and to vote in person.
The accompanying GOLD-STRIPED Special Meeting proxy card will be voted at
the Special Meeting in accordance with your instructions on such card. You may
vote FOR or AGAINST or ABSTAIN with respect to each of the Special Meeting
Proposals, except the proposal to elect the Parent Nominees for which you may
vote FOR ALL NOMINEES or to WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES. In
addition, in accordance with applicable regulations of the Commission, the
GOLD-STRIPED proxy card affords each shareholder the opportunity to designate
the name of any Parent Nominee whom such shareholder does not desire to elect
to the Company Board. Notwithstanding the foregoing, Parent and the Purchaser
recommend that shareholders vote FOR all of the Parent Nominees. The persons
named as proxies in the GOLD-STRIPED proxy card will vote, in their
discretion, for the Parent Nominees for whom authority has not been withheld.
Under the WBCL and the Company By-laws, a majority of the votes entitled to
be cast on a matter, represented in person or by proxy, constitutes a quorum.
Both abstentions and broker non-votes are counted as votes which are "present"
for purposes of determining whether a quorum exists. Once a Share is
represented for any purpose at a meeting (other than to object to the holding
of or the transaction of business at the meeting), it is considered present
for the remainder of the meeting (and any adjournment thereof).
Both abstentions and broker non-votes will have the effect of votes cast
against the first and third proposals and, to the extent any proposed
amendment pursuant to the second proposal requires the affirmative vote of
holders of at least 66 2/3% of the voting power of the then outstanding shares
of all classes of capital stock of the Company generally possessing voting
rights in the election of directors, voting together as a single class, the
second proposal. With respect to any proposed amendment pursuant to the second
proposal for which the requisite vote is a majority of the votes cast, neither
abstentions nor broker non-votes will have any effect because they are not
considered votes cast. Because directors are elected by a plurality of the
votes cast, Shares not voted and broker non-votes will have no effect in the
election of directors.
IF NO MARKING IS MADE, YOU WILL BE DEEMED TO HAVE GIVEN A DIRECTION TO THE
PERSONS APPOINTED BY THE PROXIES TO BE SOLICITED BY PARENT AND THE PURCHASER
FOR THE SPECIAL MEETING TO VOTE ALL THE SHARES REPRESENTED BY EACH GOLD-
STRIPED SPECIAL MEETING PROXY CARD AT THE SPECIAL MEETING FOR REMOVAL OF ALL
OF THE INCUMBENT DIRECTORS OF THE COMPANY AND THE ELECTION OF ALL OF THE
PARENT NOMINEES PROPOSED TO REPLACE THEM AT THE SPECIAL MEETING, AS WELL AS
FOR EACH OF THE OTHER SPECIAL MEETING PROPOSALS AND ON ALL OTHER MATTERS THAT
MAY PROPERLY COME BEFORE THE SPECIAL MEETING.
IF ANY OF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK, BANK
NOMINEE OR OTHER NOMINEE, ONLY IT CAN EXECUTE A PROXY FOR SUCH SHARES AND WILL
DO SO ONLY UPON RECEIPT OF YOUR SPECIFIC INSTRUCTIONS. ACCORDINGLY, PLEASE
CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT THAT PERSON TO
EXECUTE THE GOLD-STRIPED SPECIAL MEETING PROXY.
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<PAGE>
You may revoke your proxy at any time before it is voted by executing and
delivering a written revocation to the Secretary of the Company or the acting
secretary of the Special Meeting c/o Giddings & Lewis, Inc., 142 Doty Street,
Fond du Lac, Wisconsin 54935 or by signing and returning a later dated proxy.
Parent and the Purchaser request that you send a copy of any revocation sent
to the Company to Harnischfeger Industries, Inc., 3600 South Lake Drive, St.
Francis, Wisconsin 53235, c/o K. Thor Lundgren, Executive Vice President for
Law and Government Affairs, Secretary and General Counsel. A revocation may be
in any written form, provided that it clearly states that your proxy is no
longer effective. A proxy may also be revoked by oral notice given by the
shareholder to the presiding officer during the Special Meeting. Any
revocation of a proxy will not affect any action taken by the proxy holders
pursuant to such proxy prior to such revocation. Your presence at the Special
Meeting of the Company's shareholders will not, without more, revoke your
proxy. ONLY YOUR LATEST DATED GOLD-STRIPED SPECIAL MEETING PROXY CARD WILL
COUNT AT THE SPECIAL MEETING.
SOLICITATION OF PROXIES
Proxies for the Special Meeting may be solicited by mail, telephone,
telecopier or the Internet and in person. Solicitations may be made by
directors, officers, investor relations personnel and other employees of
Parent or the Purchaser, none of whom will receive additional compensation for
such solicitations. Parent has requested banks, brokerage houses and other
custodians, nominees and fiduciaries to forward all of its solicitation
materials to the beneficial owners of the Shares they hold of record. Parent
will reimburse these record holders for customary clerical and mailing
expenses incurred by them in forwarding these materials to their customers.
Parent has retained Georgeson and Kissel-Blake for solicitation and advisory
services in connection with (i) this solicitation and (ii) the solicitation of
Written Demands to call the Special Meeting. Parent has also retained
Georgeson and Kissel-Blake to act as Information Agents in connection with the
Offer. Parent will pay usual and customary compensation for all such services,
including fees aggregating up to $ and will reimburse each of the
Information Agents for reasonable out-of-pocket expenses in connection
therewith. Parent has agreed to indemnify each of the Information Agents
against certain liabilities and expenses in connection with the Offer,
including, without limitation, certain liabilities under the federal
securities laws. Georgeson and Kissel-Blake will solicit Written Demands and
proxies from individuals, brokers, bank nominees and other institutional
holders. It is anticipated that Georgeson and Kissel-Blake will employ
approximately 50 and 42 employees, respectively, to solicit Written Demands
and proxies in connection with the calling of and voting at the Special
Meeting.
Lehman Brothers Inc. ("Lehman Brothers") is acting as Dealer Manager in
connection with the Offer and as Parent's financial advisor with respect to
the Offer and the Proposed Merger. As compensation for such services, Parent
has agreed to pay or cause to be paid to Lehman Brothers (i) if Parent or any
of its affiliates acquires substantially all of the assets of the Company or
becomes a party to any merger or consolidation with the Company, $3.5 million,
or (ii) if a transaction is not consummated, a fee equal to 7% of Parent's
profits from the sale of its Shares or of any termination fee received. The
first $250,000 of the fee payable under (i) above is payable within ten days
of commencement of the Offer, regardless of whether the full amount of such
fee ever becomes payable. Parent has also agreed to reimburse Lehman Brothers
for certain reasonable expenses incurred in connection with Lehman Brothers'
engagement, and has also agreed to indemnify Lehman Brothers (and certain
affiliated persons) against certain liabilities and expenses, which would
include, without limitation, certain liabilities under the federal securities
laws.
Lehman Brothers has advised Parent and the Purchaser that it does not admit
that it or any of its directors, officers or employees is a "participant" as
defined in Schedule 14A promulgated under the Securities Exchange Act of 1934,
as amended, in the solicitation of Written Demands or proxies, or that
Schedule 14A requires the disclosure of certain information concerning Lehman
Brothers. In connection with Lehman Brothers' role as financial advisor to
Parent, Lehman Brothers and the following investment banking employees of
Lehman Brothers may, for the purpose of assisting in the solicitation of
Written Demands to call the Special Meeting and proxies for the Special
Meeting, communicate in person, by telephone or otherwise with a limited
number of institutions, brokers or other persons who are shareholders of the
Company: G. Tilles, S. Mohr, J. Seaman and J. Lucci. Lehman Brothers will not
receive any fee for or in connection with such solicitation activities apart
from
8
<PAGE>
the fees which it is otherwise entitled to receive as described above. In the
normal course of its business, Lehman Brothers is a market maker with respect
to the Shares and regularly buys and sells Shares for its own account and for
the accounts of its customers, which transactions may result in Lehman
Brothers and its associates having at any time a net "long" or net "short"
position in Shares or option contracts with other derivatives in or relating
to Shares. As of April 18, 1997, Lehman Brothers had a net "long" position of
397 Shares.
The entire expense of soliciting Written Demands and proxies for the Special
Meeting is being borne by Parent. Parent does not currently intend to seek
reimbursement for such expenses from the Company. Costs incidental to such
Written Demands and proxies include expenditures for printing, postage, legal
and related expenses and are expected to be approximately $1.1 million. Total
costs incurred to date in furtherance of or in connection with such Written
Demands and proxies are approximately $25,000. In addition, pursuant to the
Company By-laws, in connection with Parent's solicitation of the Written
Demands, Parent and certain other persons (the "Soliciting Shareholders") were
required to agree to pay the Company's costs of holding the Special Meeting,
including the costs of preparing and mailing proxy materials for the Company's
own solicitation (the "Company Costs"). Under the Company By-laws, however,
the Soliciting Shareholders are not required to pay any Company Costs if each
of the resolutions introduced by any Soliciting Shareholder at the Special
Meeting is adopted, and each of the individuals nominated by or on behalf of
any Soliciting Shareholder for election as a director at the Special Meeting
is elected. Parent has agreed to pay any Company Costs required to be paid by
itself and any other Soliciting Shareholder pursuant to Section 2.03 of the
Company By-laws and has agreed to reimburse in full the other Soliciting
Shareholders for any reasonable expenses incurred by such parties in
connection therewith. Parent is unable to estimate the amount of such Company
Costs.
SHAREHOLDER PROPOSALS
According to the Company's proxy statement for the 1997 Annual Meeting of
Shareholders, proposals which shareholders of the Company intend to present at
and have included in the Company's proxy statement for the 1998 annual meeting
must be received by the Company by the close of business on November 21, 1997.
In addition, the proxy statement states that a shareholder who otherwise
intends to present business at the 1998 annual meeting (including nominating
persons for election as directors) must comply with the requirements set forth
in the Company By-laws. The proxy statement states that, among other things,
to bring business before an annual meeting, a shareholder must give written
notice thereof to the Secretary of the Company in advance of the meeting in
compliance with the terms and within the time periods specified in the Company
By-laws.
OTHER INFORMATION
Parent and the Purchaser. Parent, whose principal offices are located in St.
Francis, Wisconsin, is a Delaware corporation and a holding company for
subsidiaries involved in the worldwide manufacture and distribution of surface
mining equipment; underground mining equipment; pulp and papermaking
machinery; and material handling equipment. In early fiscal 1996, Parent
completed the acquisition of Dobson Park Industries plc ("Dobson"), an
industrial engineering group with interests in underground mining equipment,
industrial electronic control systems, toys and plastics. Dobson's principal
subsidiary, Longwall International, is engaged in the manufacture, sale and
service of mining equipment for the international underground coal mining
industry and has been integrated into the Parent's Mining Equipment Segment.
In March 1996, Parent completed the purchase of the assets of the pulp
machinery division of Ingersoll-Rand Company.
Parent is the direct successor to a business begun over 100 years ago in
Wisconsin which, through its subsidiaries, manufactures and markets products
classified into three industry segments: Mining Equipment, Pulp and
Papermaking Machinery, and Material Handling.
The Purchaser is a newly incorporated Delaware corporation and a wholly
owned subsidiary of Parent which to date has not conducted any business other
than in connection with the Offer and the Proposed Merger. The
9
<PAGE>
principal executive offices of Parent and the Purchaser are located at 3600
South Lake Drive, St. Francis, Wisconsin 53235. Parent owns all of the
outstanding shares of the Purchaser.
From time to time, in the ordinary course of business, Parent makes
purchases from and sales to the Company of certain products, which
transactions are on terms and conditions customary for the industry and
negotiated at arm's length. Neither purchases by Parent from the Company nor
sales by Parent to the Company have exceeded $5 million in the aggregate in
any of Parent's or the Company's past three fiscal years.
Directors and Executive Officers. Certain information about the directors
and executive officers of Parent and the Purchaser who may also assist
Georgeson and Kissel-Blake in soliciting proxies and Written Demands is set
forth in the attached Schedule I.
Other Information. Schedule II sets forth certain information relating to
Shares owned by Parent and the Purchaser. Schedule III sets forth certain
information, as made available in public documents, regarding Shares held by
the Company's principal shareholders and its management.
THIS PROXY STATEMENT IS NEITHER A REQUEST FOR THE TENDER OF SHARES NOR AN
OFFER WITH RESPECT THERETO. THE PURCHASER'S PENDING OFFER IS BEING MADE ONLY
BY MEANS OF THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL. FOR
ADDITIONAL COPIES OF THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL, CALL
THE INFORMATION AGENTS FOR THE OFFER AT ONE OF THE FOLLOWING NUMBERS: BANKS
AND BROKERS CALL (212) 344-6733, ALL OTHERS CALL TOLL-FREE (800) 554-7733.
PLEASE INDICATE YOUR SUPPORT OF THE PURCHASER'S PENDING OFFER BY COMPLETING,
SIGNING AND DATING THE ENCLOSED GOLD-STRIPED SPECIAL MEETING PROXY CARD AND
RETURNING IT PROMPTLY TO THE INFORMATION AGENTS IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS NECESSARY IF THE ENVELOPE IS MAILED IN THE UNITED STATES.
YOUR SUPPORT IS IMPORTANT! PLEASE COMPLETE, SIGN, DATE AND MAIL THE
ACCOMPANYING GOLD-STRIPED SPECIAL MEETING PROXY PROMPTLY.
HARNISCHFEGER INDUSTRIES, INC.
DSFA CORPORATION
, 1997
10
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets forth
the name, business or residence address, principal occupation or employment at
the present time and during the last five years, and the name and principal
business of any corporation or other organization in which such employment is
conducted or was conducted of each director and executive officer of Parent.
Except as otherwise noted, each of the Parent's directors and executive
officers is a citizen of the United States. The business address of each
executive officer of Parent is 3600 South Lake Drive, St. Francis, Wisconsin
53235. Each occupation set forth opposite a person's name, unless otherwise
indicated, refers to employment with Parent. Directors are indicated by an
asterisk.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME, BUSINESS OR EMPLOYMENT AND MATERIAL
RESIDENCE ADDRESS, AGE OCCUPATIONS FOR PAST FIVE YEARS
---------------------- -------------------------------
<S> <C>
* Donna M. Alvarado........................ Principal of Aguila International, an
The Thurber Center international business development
91 Jefferson Avenue consulting firm based in Columbus, Ohio,
Columbus, Ohio 43215 since 1994. President and Chief Executive
Director since: 1992- Officer of Quest International, a non-profit
Age 48. educational organization based in Granville,
Ohio, from 1989 to 1994. Director, Park
National Bank.
* Larry D. Brady........................... President of FMC Corporation, a world leader
FMC Corporation in production of chemicals and machinery for
200 E. Randolph Drive industry, government and agriculture, since
Chicago, Illinois 60601 1993. Director of FMC Corporation since
Director since: 1995 1989. Chairman of United Defense L.P.
Age 54. Director, National Merit Scholarship
Foundation and National Association of
Manufacturers.
* Francis M. Corby, Jr..................... Executive Vice President for Finance and
Director since: 1996 Administration and Chief Financial Officer
Age 53. since 1995. Senior Vice President, Finance
and Chief Financial Officer from 1986 to
1995.
* John D. Correnti......................... President, Chief Executive Officer and
Nucor Corporation Director of Nucor Corporation, a major steel
2100 Rexford Road producer headquartered in Charlotte, North
Charlotte, North Carolina 28211 Carolina, since 1996. President, Chief
Director since: 1994 Operating Officer and Director of Nucor,
Age 49. from 1991 to 1995. Director, CEM
Corporation, Navistar International
Corporation and North Carolina Board of
Wachovia Bank.
* Harry L. Davis........................... Professor of Creative Management at the
842 Western Avenue University of Chicago since 1994. Professor
Flossmoor, Illinois 60422 of Marketing from 1963 to 1994. Deputy Dean
Director since: 1987 of the Graduate School of Business at the
Age 59. University of Chicago from 1983 to 1993.
Director, Golden Rule Insurance Company.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME, BUSINESS OR EMPLOYMENT AND MATERIAL
RESIDENCE ADDRESS, AGE OCCUPATIONS FOR PAST FIVE YEARS
---------------------- -------------------------------
<S> <C>
* Robert M. Gerrity........................ Chairman and Chief Executive Officer of
Gerrity Partners Antrim Group Inc., a Michigan-based
114 Division Street technology corporation, since December,
Bellaire, Michigan 49615 1996. Director and former President and
Director since: 1994 Chief Executive Officer of Ford New Holland,
Age 59. now New Holland n.v., a London-based
agricultural and industrial equipment
manufacturer. Director, Libralter Engineered
Systems, Rubbermaid, Inc. and Standard Motor
Products, Inc.
* Jeffery T. Grade......................... Chairman and Chief Executive Officer since
Director since: 1983 1993. President and Chief Executive Officer
Age 53. from 1992 to 1993. President and Chief
Operating Officer from 1986 to 1992.
Director, Case Corporation and Coeur D'Alene
Mines Corporation.
* John N. Hanson........................... President and Chief Operating Officer since
Director since: 1996 1996. Executive Vice President and Chief
Age 55. Operating Officer from 1995 to 1996.
President and Chief Executive Officer of Joy
Technologies Inc. from 1994 to 1995.
President, Chief Operating Officer and
Director of Joy Technologies Inc. from 1990
to 1995. Director, Schuller Corporation.
* Robert B. Hoffman........................ Senior Vice President and Chief Financial
Monsanto Company Officer of Monsanto Company, a diversified
800 North Lindbergh Blvd. company in chemicals, pharmaceuticals, food
St. Louis, Missouri 63167 products and agricultural chemicals, since
Director since: 1994 1994. Vice President-International of FMC
Age 60. Corporation, a manufacturer of machinery and
chemical products, from 1990 to 1994.
Director, Kemper Group of Municipal Funds
and Boatmen's Trust Company.
* Ralph C. Joynes.......................... Retired Vice Chairman, President and Chief
3 John Christopher Court Operating Officer of USG Corporation,
Richmond, Virginia 23226 international manufacturer of building
Director since: 1988 materials and construction systems.
Age 68.
* Jean-Pierre Labruyere.................... Chairman and Chief Executive of Labruyere,
Societe Financiere Eberle, a financial holding company based in
Labruyere, Eberle France with global interests in many
70 Avenue Edouard-Herriot business areas including oil and gas
71003 Macon France importation and distribution and food
Director since: 1994 distribution, since 1972. Director, Promodes
Citizenship: French S.A. Martin Maurel Bank--Banque de France
Age 59. Adviser.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR
NAME, BUSINESS OR EMPLOYMENT AND MATERIAL
RESIDENCE ADDRESS, AGE OCCUPATIONS FOR PAST FIVE YEARS
---------------------- -------------------------------
<S> <C>
* L. Donald LaTorre........................ Retired President and Chief Operating
Engelhard Corporation Officer, Engelhard Corporation, a world-
101 Wood Avenue leading provider of environmental
Iselin, New Jersey 08830 technologies, specialty chemical products,
Director since: 1997 engineered materials and services, since
Age 59. January 31, 1997. President and Chief
Operating Officer from 1995 to 1997. Senior
Vice President and Chief Operating Officer
from 1990 to 1995. Director, Engelhard
Corporation and N.E. Chemcat Corp.
K. Thor Lundgren........................... Executive Vice President for Law and
Age 49. Government Affairs, Secretary and General
Counsel since December 1994; Senior Vice
President, General Counsel and Secretary
from 1991 to December 1994. Prior to joining
Parent in September 1991, Mr. Lundgren was a
partner with the law firm of Michael, Best &
Friedrich.
* Leonard E. Redon......................... President and Chief Executive Officer,
Eastman Kodak Company Qualex, Inc., a wholesale photoprocessor
343 State Street company headquartered in Durham, North
Rochester, New York 14650 Carolina. Vice President of Eastman Kodak
Director since: 1997 Company, a company engaged worldwide in
Age 45. developing, manufacturing and marketing
consumer and commercial imaging products,
and President, Customer Equipment Services
Division of Eastman Kodak, since 1995.
General Manager and Vice President of
Government and Education Markets from 1994
to 1995. General Manager and Vice President
of Markets Development, U.S. and Canada from
1991 to 1994.
* Donald Taylor............................ Principal in Sullivan Associates, specialists
Sullivan Associates in board of director searches, since 1992.
5215 North Ironwood Road, Suite 107 Managing Director-USA, ANATAR Investments
Milwaukee, Wisconsin 53217 Limited, a venture capital specialist, from
Director since: 1979 1990 to 1992. Director, Banta Corporation,
Age 69. Johnson Controls, Inc., Superior Services,
Inc. and The Enhancers, Inc.
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The directors of the
Purchaser are Jeffery T. Grade, John N. Hanson and Francis M. Corby, Jr. Mr.
Grade is the Chairman of the Board and President of the Purchaser, Mr. Hanson
is Vice President and Secretary, and Mr. Corby is Vice President and
Treasurer. Each director and officer was appointed or elected in April 1997.
Each of such persons is an officer and director of Parent. Additional
information regarding the directors and officers of the Purchaser is set forth
above.
I-3
<PAGE>
SCHEDULE II
SHARES HELD BY PARENT AND THE PURCHASER
I. TRANSACTIONS IN SHARES BY PARENT AND THE PURCHASER
Parent is the beneficial owner of an aggregate of 789,600 Shares, of which
the Purchaser is the record holder and beneficial owner of 1,000 Shares. All
of such Shares were purchased for cash in open market transactions as follows:
<TABLE>
<CAPTION>
SHARES PRICE PAID
TRANSACTION DATE PURCHASED PER SHARE*
---------------- --------- ----------
<S> <C> <C>
28-Feb-97............................................ 45,000 $13.8750
03-Mar-97............................................ 2,500 $13.6250
04-Mar-97............................................ 18,900 $13.6250
04-Mar-97............................................ 21,100 $13.7500
05-Mar-97............................................ 22,100 $13.7500
11-Mar-97............................................ 10,000 $14.0000
12-Mar-97............................................ 15,000 $14.0000
13-Mar-97............................................ 5,000 $14.0000
14-Mar-97............................................ 300,000 $14.1250
24-Mar-97............................................ 350,000 $14.5000
</TABLE>
--------
* Exclusive of commissions.
On April 15, 1997, Parent contributed to the Purchaser 1,000 Shares in
exchange for 1,000 shares of Common Stock, par value $.10 per share, of the
Purchaser.
II. TRANSACTIONS IN SHARES BY DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND
THE PURCHASER AND THE PARENT NOMINEES
Except as disclosed in this Schedule II, none of Parent, the Purchaser, any
of their respective directors or executive officers or the Parent Nominees
owns any securities of the Company or of any subsidiary of the Company,
beneficially or of record, has purchased or sold any of such securities within
the past two years or was within the past year a party to any contract,
arrangement or understanding with any person with respect to any such
securities. Except as disclosed in this Schedule II, to the knowledge of
Parent, no associate of Parent, the Purchaser, any of their respective
directors or executive officers or the Parent Nominees beneficially owns,
directly or indirectly, any securities of the Company.
To the knowledge of Parent, other than disclosed in the Proxy Statement or
this Schedule II, none of Parent, the Purchaser, any of their respective
directors or executive officers or the Parent Nominees has any substantial
interest, direct or indirect, by security holdings or otherwise, in any matter
to be acted upon at the Special Meeting.
None of the Parent Nominees has, during the last ten years, been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
II-1
<PAGE>
SCHEDULE III
PRINCIPAL SHAREHOLDERS OF THE COMPANY
AND SHAREHOLDINGS OF THE COMPANY'S MANAGEMENT
Set forth below is information regarding Shares owned by (i) directors and
executive officers of the Company and (ii) those persons owning more than 5%
of the outstanding Shares. Such information is obtained from the Company's
proxy statement for the Company's 1997 Annual Meeting of Shareholders, filed
with the Commission on March 21, 1997.
MANAGEMENT
(AS OF MARCH 1, 1997)
The following table sets forth information, as of March 1, 1997, regarding
beneficial ownership of Shares by each director, certain named executive
officers, and all of the directors, nominees and executive officers as a
group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP(1)(2) CLASS
------------------------ -------------------- ----------
<S> <C> <C>
John A. Becker.............................. 4,896 *
Joseph R. Coppola........................... 344,430(3) 1.0%
Ruth M. Davis............................... 2,696 *
Clyde H. Folley............................. 7,339(4)(5) *
Benjamin F. Garmer, III..................... 4,696 *
John W. Guffey, Jr.......................... 4,984 *
Marvin L. Isles............................. 110,000 *
Ben R. Stuart............................... 3,696 *
Heinz G. Anders............................. 88,000 *
Stephen M. Peterson......................... 87,517 *
Philip N. Ciarlo............................ 64,000 *
Richard C. Kleinfeldt....................... 125,566(6) *
All directors and executive officers
as a group (18 persons).................... 1,301,377 3.8%
</TABLE>
- --------
*Less than one percent.
(1) Includes the following Shares subject to stock options which are currently
exercisable or exercisable within 60 days of March 1, 1997: Mr. Becker,
2,000 Shares; Mr. Coppola, 291,000 Shares; Dr. Davis, 1,000 Shares; Mr.
Folley, 2,000 Shares; Mr. Garmer, 2,000 Shares; Mr. Stuart, 1,000 Shares;
Mr. Anders, 31,000 Shares; Mr. Peterson, 31,367 Shares; Mr. Ciarlo, 13,000
Shares; Mr. Kleinfeldt, 62,287 Shares; and all directors and executive
officers as a group, 623,334 Shares.
(2) Includes the following restricted Shares granted under either the
Company's 1989 Restricted Stock Plan or the Company's 1993 Stock and
Incentive Plan, over which the holders have sole voting but no investment
power: Mr. Becker, 1,696 Shares; Mr. Coppola, 357 Shares; Dr. Davis, 1,696
Shares; Mr. Folley, 1,339 Shares; Mr. Garmer, 1,696 Shares; Mr. Guffey,
984 Shares; Mr. Isles, 75,000 Shares; Mr. Stuart, 1,696 Shares; Mr.
Anders, 51,000 Shares; Mr. Peterson, 45,000 Shares; Mr. Ciarlo, 51,000
Shares; Mr. Kleinfeldt, 36,000 Shares; and all directors, nominees and
executive officers as a group, 498,064 Shares. The restricted Shares
reflected in the table include Shares granted to the executive officers in
February 1997.
(3) Mr. Coppola's current term as a director is scheduled to expire in April
1997.
(4) Mr. Folley's current term as a director is scheduled to expire in April
1997.
(5) Mr. Folley shares voting and investment power over 4,000 Shares with his
wife.
(6) Mr. Kleinfeldt retired as Vice President--Finance and as a director of the
Company in December 1996.
III-1
<PAGE>
OTHER BENEFICIAL OWNERS
The following table sets forth information, as of December 31, 1996,
regarding beneficial ownership by the only persons known to the Company as
disclosed in the Company Annual Meeting Proxy Statement to own more than 5% of
the outstanding Shares. The Annual Meeting Proxy Statement stated that the
beneficial ownership set forth below has been reported on filings made on
Schedule 13G with the Commission by the beneficial owners.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP
---------------------------------
VOTING POWER INVESTMENT POWER
---------------- ----------------
PERCENT
NAME AND ADDRESS OF OF
BENEFICIAL OWNER SOLE SHARED SOLE SHARED AGGREGATE CLASS
- ------------------- --------- ------ --------- ------ --------- -------
<S> <C> <C> <C> <C> <C> <C>
State of Wisconsin In-
vestment Board.......... 3,120,000 -0- 3,120,000 -0- 3,120,000 9.4%
P.O. Box 7842
Madison, Wisconsin 53707
Sanford C. Bernstein &
Co., Inc. .............. 1,446,450 27,950 1,710,200 -0- 1,710,200 5.2%
767 Fifth Avenue
New York, New York 10153
</TABLE>
III-2
<PAGE>
- -------------------------------------------------------------------------------
IMPORTANT
If your Shares are registered in your own name, you may mail or fax your
GOLD-STRIPED proxy card (both sides) to Georgeson & Company Inc. or Kissel-
Blake Inc. at their respective addresses or fax numbers listed below.
If your Shares are held in "street name"--held by your brokerage firm or
bank--immediately instruct your broker or bank representative to sign Parent's
GOLD-STRIPED proxy card on your behalf.
If you have any questions concerning the tender offer material you have
previously received, or need assistance tendering your Shares pursuant to the
Offer, please call Kissel-Blake Inc. at the number listed below.
IF YOU HAVE ANY QUESTIONS REGARDING YOUR PROXY, OR NEED ASSISTANCE IN VOTING
YOUR SHARES, PLEASE CALL GEORGESON & COMPANY INC. AT THE NUMBERS LISTED BELOW.
GEORGESON
& COMPANY INC. KISSEL BLAKE INC.
Wall Street Plaza 110 Wall Street
New York, New York 10005 New York, New York 10005
Banks and Brokers Call Collect:
(212) 440-9800
Banks and Brokers Call: (212) 344-6733
All Others Call Toll-Free: (800) 223-2064 All Others Call Toll-Free: (800)
Facsimile: 554-7733
Facsimile: (212) 809-1208
- -------------------------------------------------------------------------------
<PAGE>
PROXY GIDDINGS & LEWIS, INC.
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON , 1997
THIS PROXY IS SOLICITED BY
HARNISCHFEGER INDUSTRIES, INC.
AND
DSFA CORPORATION.
The undersigned hereby appoints Francis M. Corby, Jr. and K. Thor Lundgren,
and each of them, with full power of substitution, the proxies of the
undersigned to represent and to vote all of the outstanding shares of Common
Stock, $.10 par value per share ("Shares"), of Giddings & Lewis, Inc. (the
"Company") that the undersigned is entitled to vote at the Special Meeting of
Shareholders of the Company to be held on , 1997 (the "Special Meeting"), or
at any adjournment or postponement of the Special Meeting, on the following
matters which are described in the Proxy Statement (the "Proxy Statement"; all
capitalized terms used herein without definition having the meaning set forth
therein) of Harnischfeger Industries, Inc. ("Harnischfeger") and DSFA
Corporation ("DSFA"), dated , 1997, as follows:
HARNISCHFEGER AND DSFA RECOMMEND THAT YOU VOTE "FOR" ITEMS 1-4.
FIRST PROPOSAL: Resolution calling for removal of all current directors.
[_] FOR [_] AGAINST [_] ABSTAIN
SECOND PROPOSAL: Resolution calling for the repeal of each provision of the
Company By-laws or amendments thereto (other than the amendment referred to in
the third proposal below) adopted subsequent to March 28, 1997, or adopted on
or prior to that date but not filed as an exhibit to the Company's public
filings on or prior to such date.
[_] FOR [_] AGAINST [_] ABSTAIN
THIRD PROPOSAL: Resolution calling for amendment of the Company By-laws to fix
the number of directors at three.
[_] FOR [_] AGAINST [_] ABSTAIN
FOURTH PROPOSAL: To elect Jeffery T. Grade, John N. Hanson, and Francis M.
Corby, Jr. as directors of the Company to hold office until the annual meeting
of shareholders in 1998, 1999 and 2000, respectively.
[_] FOR ALL NOMINEES (except as marked to the contrary below) [_] WITHHOLD
AUTHORITY TO VOTE FOR ALL NOMINEES
INSTRUCTION: To withhold authority to vote for the election of one or more of
the nominees listed above, and to vote for the others, mark FOR ALL NOMINEES
above and write the name(s) of the person(s) with respect to whom you wish to
withhold authority to vote here:
- ------------------------
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE
[PROXY CONTINUED AND TO BE DATED AND SIGNED ON REVERSE]
<PAGE>
The proxies of the undersigned named above are authorized to vote, in their
discretion, for the election of such substitute nominee(s) for director as such
proxies may select in the event that any nominee(s) named above become(s)
unable to serve, and upon such other matters as may properly come before the
Special Meeting and any adjournment or postponement thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER MARKED HEREIN
BY THE UNDERSIGNED. IF NO MARKING IS MADE AS TO ANY PROPOSAL OR ALL PROPOSALS,
THIS PROXY WILL BE VOTED "FOR" EACH OF THE FOUR PROPOSALS DESCRIBED ABOVE. THE
UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE PROXY STATEMENT OF HARNISCHFEGER
AND DSFA DATED , 1997, SOLICITING PROXIES FOR THE SPECIAL MEETING.
All previous proxies given by the undersigned to vote at the Special Meeting
or at any adjournment or postponement thereof are hereby revoked.
Please sign exactly as name appears on
this Proxy:
----------------------------------------
(Signature)
----------------------------------------
(Signature, if jointly held)
Title:
----------------------------------------
Dated:
, 1997
When Shares are held by joint tenants,
both should sign. When signing as an
attorney, executor, administrator,
trustee or guardian, give full title as
such. If a corporation, sign in full
corporate name by President or other
authorized officer. If a partnership,
sign in partnership name by authorized
person.
PLEASE COMPLETE, SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY TO
HARNISCHFEGER INDUSTRIES, INC., C/O GEORGESON & COMPANY INC. AND KISSEL-BLAKE
INC., IN THE ENCLOSED ENVELOPE.
<PAGE>
Exhibit (g)(3)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
x---------------------------------------x
:
HARNISCHFEGER INDUSTRIES, INC., and :
DSFA CORPORATION, :
:
Plaintiffs, :
:
- v. - : Civil Action No. 97-C-0488
:
:
MARVIN L. ISLES, BEN R. STUART, :
JOHN A. BECKER, JOHN W. GUFFEY, JR., :
RUTH M. DAVIS, BENJAMIN F. GARMER, III, :
and GIDDINGS & LEWIS, INC., :
a Wisconsin corporation, :
:
Defendants. :
x---------------------------------------x
COMPLAINT
---------
Plaintiffs Harnischfeger Industries, Inc. ("Harnischfeger"), and DSFA
Corporation ("DSFA"), for their complaint against defendants, allege upon
knowledge as to themselves and otherwise upon information and belief the
following:
Background and Nature of the Action
-----------------------------------
1. This action is brought by plaintiffs Harnischfeger and its wholly-
owned subsidiary, DSFA, to remedy violations of the disclosure requirements of
the federal securities laws by defendant Giddings & Lewis, Inc. ("Giddings") and
its directors and to remedy their ongoing and threatened violations of their
fiduciary duties under Wisconsin law.
<PAGE>
2. Plaintiffs have today announced their intention to commence a
nationwide tender offer for the shares of defendant Giddings, pursuant to the
applicable provisions of the Securities Exchange Act of 1934, as amended by the
Williams Act of 1968, codified at 15 U.S.C. (S)(S) 78a seq (the "1934 Act"), and
---
the rules and regulations of the Securities and Exchange Commission ("SEC")
promulgated thereunder. The price plaintiffs are offering is $19 cash per
share, representing a greater than 40% premium over the closing price of
Giddings shares in the marketplace the day before the announcement of
plaintiffs' tender offer. The total value of plaintiffs' tender offer is
approximately $630 million. The tender offer is expected to commence by filing
with the SEC and publication of the terms of the tender offer on Monday, April
28, 1997.
3. Plaintiffs' decision to commence the aforesaid tender offer
followed Giddings' refusal to engage in meaningful discussions for a consensual
transaction in which Giddings would be combined with Harnischfeger. Individual
defendant Marvin Isles, Giddings' President and Chief Executive Officer, refused
after a series of conversations with Harnischfeger's Chairman and Chief
Executive Officer during the days preceding the filing of this Complaint to
engage in meaningful discussions about a combination of the two firms at the $19
per share price, notwithstanding that, as detailed below, Harnischfeger
-2-
<PAGE>
has enjoyed conspicuous business and financial success over the past three years
while Giddings' results have declined or been stagnant, and notwithstanding that
Giddings stock has lost nearly half its value during the same three-year period,
----
while the market generally and Giddings' peer group of companies have
substantial increased in value. Giddings' refusal to engage in meaningful
discussions for a consensual transaction also followed by less than a week its
public announcement that its financial results for the first quarter of 1997
showed steep declines from the same period a year earlier. Plaintiffs have
concluded that Giddings' officers and directors intend to resist a combination
with Harnischfeger despite the manifest benefits of such a transaction for
Giddings' shareholders and its other corporate constituencies.
4. In light of Giddings' failure and refusal to engage in meaningful
discussions with plaintiffs for a consensual combination with Harnischfeger,
plaintiffs as part of their effort to acquire Giddings will also be conducting a
proxy solicitation pursuant to the SEC Proxy Rules, 17 C.F.R. 240.14a et seq.
-- ---
The purpose of the solicitation, which will be nationwide in scope, is to
obtain, in accordance with Wisconsin law and Giddings By-laws, written demands
sufficient to call a special meeting of Giddings' shareholders at which they
will decide whether to replace the current directors with directors who are
pledged, subject to their fiduciary duties to Giddings'
-3-
<PAGE>
shareholders, to giving such shareholders the opportunity to accept plaintiffs'
offer.
5. The shares of Giddings stock are registered under the 1934 Act,
and are traded on the Nasdaq Stock Market, Inc.'s ("NASDAQ") National Market.
Giddings is required to comply with the disclosure provisions of the federal
securities statutes, and the rules and regulations of the SEC promulgated
thereunder.
6. Giddings is incorporated under the laws of Wisconsin, and has its
headquarters in Fond du Lac, Wisconsin. Based on the information available,
plaintiffs believe that at least three-quarters of the outstanding Giddings
shares are held of record by shareholders residing outside the State of
Wisconsin.
7. As detailed herein, the public disclosures made by Giddings in
various SEC filings are materially deficient in several respects. Current SEC
filings by Giddings, including the Proxy Statement being used by Giddings to
solicit proxies for its April 30, 1997 Annual Meeting of Shareholders:
(a) fail to describe accurately certain material features and effects
of the "Management Stock Purchase Program" adopted by defendants on March 13,
1997, as detailed hereinbelow;
-4-
<PAGE>
(b) fail to disclose that defendants have nominated for election at
the upcoming April 30, 1997 Annual Meeting an insufficient number of director
candidates such that, if only such number is elected, Giddings' By-laws will be
violated and Giddings' board will not comply with the Giddings By-laws (whose
contents are nowhere referenced in the Proxy Statement), as detailed
hereinbelow; and
(c) fail to describe accurately the terms and characteristics of
Giddings' "poison pill" Shareholder Rights Plan, as detailed hereinbelow.
8. In addition to these violations of applicable disclosure laws,
defendants are also violating their fiduciary duties to plaintiffs and to the
public shareholders of Giddings generally. Defendants' propensity to violate
these duties, and their actual violations of such duties, are demonstrated by
(a) their adoption last month of the grossly self-serving management
compensation program known (misleadingly) as the "Management Stock Purchase
Program," which puts the pecuniary interests of management ahead of the
interests of shareholders and which, its name notwithstanding, does not subject
management participants to the economic risks of "stock purchase"; and (b)
defendants' refusal to consider plaintiffs' proposal for a consensual
combination of Giddings and Harnischfeger in good faith and with the due care it
deserves, and to which the public
-5-
<PAGE>
shareholders of Giddings are entitled. As set forth below, defendants are also
likely to respond to plaintiffs' tender offer and special meeting proxy contest
- -- which threaten defendants' entrenchment at Giddings -- with "scorched earth"
defenses involving attempts to alter Giddings' existing By-laws governing
special meetings of shareholders and the adoption of other extreme defensive
measures.
PARTIES AND JURISDICTION
------------------------
9. Plaintiff Harnischfeger is a Delaware corporation with its
principal place of business in St. Francis, Wisconsin. Harnischfeger is a
leading supplier of capital machinery and services associated with the mining,
pulp and paper, and materials handling industries. In recent years,
Harnischfeger has shown excellent financial results, nearly doubling sales and
more than tripling operating income since the end of 1994. Harnischfeger is one
of the largest corporations based in Wisconsin, employing approximately 3,600
persons in the state and 17,000 persons worldwide. Harnischfeger is the
beneficial owner of 789,600 shares of Giddings stock (including the 1,000 shares
owned by DSFA as described below).
10. Plaintiff DSFA is a Delaware corporation. DSFA is a wholly-owned
subsidiary of plaintiff Harnischfeger; was formed for the purpose of acquiring
Giddings; and conducts and has conducted no business other than to make the
tender offer
-6-
<PAGE>
for shares of Giddings stock which is described in Paragraph 2 of this
Complaint, and to take actions related thereto. DSFA is the beneficial owner
and record holder of 1000 shares of Giddings.
11. Defendant Giddings is a Wisconsin corporation with its principal
place of business in Fond du Lac, Wisconsin. Giddings is a manufacturer of
machine tools, industrial automation and related products. In recent years,
Giddings' financial performance has severely lagged that of other companies in
its peer group. Bookings have consistently decreased, and net income has
declined or shown no significant increase, since 1994. Figures released on
April 17, 1997 for the first quarter of this year show that Giddings' decline
has continued, with sales down more than 20% from a year earlier and net income
more than 25% lower.
12. There are approximately 33,000,000 shares of Giddings stock
issued and outstanding. Giddings stock has entirely missed out on the growth in
value which the general market, Giddings' peer group and Harnischfeger have
enjoyed over the last three years. In that period, Harnischfeger stock has more
than doubled in value, the S&P 500 index has risen by nearly 70%, Giddings' peer
group has risen by more than 50% -- and Giddings has fallen by nearly 50%.
-7-
<PAGE>
13. The individual defendants are those current directors of Giddings
who are expected to continue to serve as directors after Giddings' April 30,
1997 Annual Meeting. Defendant Isles was appointed President and Chief Executive
Officer of Giddings on March 17, 1997. The directors and officers of Giddings as
a group control no more than 2% of Giddings' outstanding shares.
14. Because plaintiffs' claims arise under provisions of the 1934
Act, this Court has jurisdiction over the subject matter of this action pursuant
to 28 U.S.C. (S) 1331, and under the jurisdictional provisions of the 1934 Act,
15 U.S.C. (S) 78aa; and this Court also has jurisdiction under 28 U.S.C.
(S)(S)2201 and 2202. Venue is proper in this Court pursuant to 28 U.S.C. (S)
1391 and 15 U.S.C. (S) 78aa, since the claims arose in this judicial district.
15. This Court has jurisdiction over the claims pleaded in Count III
of this complaint pursuant to the Court's supplemental jurisdiction.
-8-
<PAGE>
DEFENDANTS' VIOLATIONS OF THE DISCLOSURE
PROVISIONS OF THE FEDERAL SECURITIES LAWS
-----------------------------------------
A. Failure to accurately describe material features and
effects of the March 13, 1997 "Management Stock
Purchase Program"
----------------------------------------------------
16. Notwithstanding the dismal performance of Giddings' stock over
the past three years, on March 13, 1997, Giddings' board adopted a novel form of
stock-based executive compensation and called it the "Management Stock Purchase
Program" ("Management Stock Program"), whose primary feature as described below
is to insulate management participants from much of the down-side risks of
owning Giddings stock. Pursuant to the Management Stock Program, certain senior
Giddings executives were granted and exercised brand new options to purchase, in
the aggregate, 282,355 shares of Giddings stock.
17. Under the Management Stock Program, Giddings facilitates
purported "purchases" by management of Giddings stock. It uses its corporate
credit to permit these executives to obtain loans from a commercial bank to
purchase the Giddings stock; it gives corporate guarantees for the repayment of
the bank loans; and it obligates itself to pay the interest on the individual's
loans. But the favored executives do not run the actual market risk that any
----
other shareholder/purchaser does. The Management Stock Program permits the
participating executives to reap 100% of any gain in stock value, while
----
suffering
-9-
<PAGE>
only 50% of any losses (provided the executive holds the stock at least three
years), i.e., Giddings has agreed to reimburse the executive for 50% of any
----
decline in value. This preferential treatment of executives is inimical to the
interests of Giddings shareholders generally and is at variance with the
principle of equity investment.
18. In its description of the Management Stock Program in the March
21, 1997 Proxy Statement for the April 30 annual meeting, which has been filed
with the SEC on SEC Schedule 14A and which was mailed to all Giddings
shareholders of record on March 21, 1997, defendants have omitted to state
several material facts and circumstances concerning the Program:
(a) defendants failed to provide any estimate or quantification of the
potential or actual cost to Giddings and its public shareholders of the
Management Stock Program, under which Giddings has obligated itself to (i) pay
the interest on the commercial bank loans taken out by the executives; (ii) pay
50% of any losses on the shares incurred by the executives (under the
circumstances in which the executives are entitled to reimbursement for such
losses); and (iii) pay the principal of the bank loans as to which the Giddings
guarantees become applicable;
(b) defendants failed to disclose in the Proxy Statement that the
Management Stock Program includes a
-10-
<PAGE>
"grossup" provision under which Giddings will actually reimburse the executives
for certain taxes paid by them on account of Giddings' indemnification of their
losses;
(c) defendants failed to disclose that certain of the payments
authorized under the Management Stock Program may not qualify as deductible
compensation expense, thus imposing an additional burden on the corporate
treasury and the interests of Giddings' shareholders other than the Management
Stock Program participants;
(d) defendants failed to disclose that, because of the economic
interest of Giddings in the shares nominally owned by the executives, including
Giddings' shared interest in potential losses on the stock, the 282,355 shares
of Giddings stock which have been "purchased" by the individuals are not issued-
and-outstanding shares for certain purposes. Thus, these 282,355 shares are
"treasury stock" and accordingly may not be voted; may not be counted towards
certain calculations (such as the 20% threshold contained in Giddings'
shareholders rights plan), including the calculation of the number of votes
necessary to remove members of the Giddings board; and may not be counted in
calculating earnings per share; and
(e) defendants failed to disclose that, since the 282,355 options
granted in connection with the Management Purchase Program are subject to the
share option provisions of the
-11-
<PAGE>
Giddings 1993 Stock Incentive Plan, the provisions of the Management Purchase
Program effect and amount to a modification and amendment of the 1993 Plan; in
turn, such an amendment by unilateral action of the Giddings board is invalid
because the 1993 Plan was approved by Giddings shareholders and can be amended
in this respect only by a subsequent shareholder vote, which has not been
obtained or sought.
19. In view of the characteristics of the Management Stock Program
described above, which removes much of the normal risk inherent in true equity
ownership, the statement in the Giddings Proxy Statement that the effect of the
Management Stock Program is to "align more closely the interests of management
and shareholders" is thoroughly misleading: manifestly, no public shareholder
of Giddings is being given the opportunity to buy Giddings stock with company-
guaranteed loans, company interest payments and company indemnification against
loss and against tax liability.
B. Failure to disclose the non-compliance of the 1997
election procedures with Giddings' existing By-laws
---------------------------------------------------
20. The publicly disclosed By-laws of Giddings provide for a
"classified" or "staggered" board of directors, i.e., the directors are divided
----
into three classes with overlapping terms of office. Section 3.01(b) of the
Giddings Bylaws further provides that "[t]he number of directors of the
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<PAGE>
Corporation shall be eight (8), divided into three (3) classes of three (3),
three (3) and two (2) directors, respectively."
21. Despite the foregoing, the Giddings Proxy Statement for the April
30, 1997 Annual Meeting indicates that, following the annual meeting, there will
be only six directors comprising the Giddings board, instead of the eight
---
required by the By-laws, and states that Giddings shareholders are being asked
to vote on only two nominees for director of Giddings (Class of 2000).
22. The Proxy Statement fails to disclose that defendants' plan for a
six-person board violates Giddings' own By-laws, which require an eight-person
board and 3-3-2 classes. The Proxy Statement further fails to disclose why the
Giddings board chose to nominate only two directors for the class of 2000, while
the By-laws require a different board structure. The Proxy Statement further
fails to disclose that the By-laws empower the directors to fill vacancies and
fails to disclose what consideration defendants have given to filling the two
vacancies that will exist after April 30, 1997 by reason of the defendants'
unilateral decision not to permit the shareholders to fill those seats.
23. Under the foregoing circumstances, the shareholders of Giddings
are being deprived of material information. They are being asked to vote for
nominees to a board which
-13-
<PAGE>
defendants have structured in clear violation of Giddings' Bylaws. No
information has been provided in the Proxy Statement as to why the defendants
have chosen to deviate from the Bylaws. Indeed, the Proxy Statement does not
even make reference to the By-law requirements of an eight-person board and
classes of 3, 3 and 2.
C. Errors and omissions in Giddings' Public Disclosures
Concerning the Giddings "Poison Pill"
----------------------------------------------------
24. In 1995, Giddings adopted a "poison pill" shareholder rights plan
under which Giddings distributed a security known as a right to shareholders
(the "Right"). The Right entitles shareholders to purchase shares of Giddings,
under certain circumstances, on economic terms that impose a substantial
economic penalty on would-be acquirors of Giddings. Among the events that cause
the exercisability of the Rights to be triggered is the acquisition by any
person, in a transaction that is not approved by the Giddings board, of more
than 20% of Giddings' stock. The "poison pill" is thus a defensive measure
that, unless voluntarily redeemed by Giddings' board of directors, can
completely prevent an acquisition from occurring, since the would-be acquiror
will be unwilling or unable to purchase shares if such purchases would trigger
the exercise of the rights and thus impose a large economic penalty on the
acquiror.
-14-
<PAGE>
25. The existence of Giddings' rights plan requires plaintiffs to
conduct and win a proxy contest to replace Giddings' existing board if
plaintiffs are to be sure of their ability to consummate the tender offer.
Under the terms of the existing Giddings' poison pill rights plan, the Rights
can be rendered inapplicable to plaintiffs' offer and tender offer either by
Giddings' current directors or by their duly elected successors. At the special
meeting of shareholders which plaintiffs are seeking to convene, the director
nominees proposed by plaintiffs will be pledged to render the Rights
inapplicable to plaintiffs' offer.
26. For the reasons set forth above, the rights plan is a powerful
weapon. It permits the incumbent directors to entrench themselves and prevent
the consummation of plaintiffs' tender offer, even if the non-management
shareholders -- who control 98% of the outstanding shares -- wish to sell their
shares to plaintiffs in their premium tender offer. It permits the individual
defendants to continue the profligate compensation and other policies that have
separated top management's personal economic interests from those of Giddings'
public shareholders and employees.
-15-
<PAGE>
(i.) Mischaracterization of Market Price
Calculation For Exercise of Flip-In/
Flip-Over Rights
------------------------------------
27. Because the rights plan is a powerful weapon, which may
powerfully affect the value of Giddings shareholders' investments, disclosures
about it are of great materiality. Giddings' disclosures about its rights plan
are inaccurate in numerous respects. Thus, under the rights plan, each Right
represents the right to purchase one one-hundredth of a preferred share upon the
terms and subject to the conditions set forth in the Rights Agreement. Upon the
occurrence of certain events enumerated in the Rights Agreement, the Rights
become exercisable into the common stock of Giddings, under certain
circumstances, and into the common stock of a potential acquiring company, under
other circumstances, in both cases instead of preferred shares of Giddings. In
either case, the number of shares of such common stock into which the Right
becomes exercisable is determined on the basis of the "current per share market
price" of such common stock.
28. In the Rights Agreement, the phrase "current per share market
price" is defined as the average of the daily closing prices per share of the
common stock for the 30 consecutive trading days immediately prior to the date
the market price is to be determined. However, in Giddings' Registration
Statement on Form 8-A (the "Form 8-A"), filed with the SEC on
-16-
<PAGE>
August 23, 1995 to register the Rights, Giddings gave examples of how to
calculate the conversion of the Rights, explaining that "if at the time of such
transaction the acquiring company's common stock was trading at $20 per share. .
-----------
. ." (emphasis added). This characterization misrepresents the terms of the
Rights Agreement, which provides for a 30-day average for purposes of
calculating a current market value of the common stock, which, under certain
circumstances, could yield a significantly different result.
(ii.) Misleading Characterization of Certain
Triggering Events as "Self-Dealing"
--------------------------------------
29. Section 11 (a)(ii)(C) of the Rights Agreement lists certain
actions by any Acquiring Person (as defined therein) that trigger a conversion
(a "Flip In") of the Rights into a right to receive shares of common stock of
Giddings rather than the Preferred Shares. Such actions include: (a) merging
into or otherwise combining with Giddings; (b) a transfer of assets to Giddings
in exchange for common stock; (c) the sale, purchase, lease or other disposition
to, from or with Giddings of assets on terms and conditions less favorable to
Giddings than Giddings would be able to obtain through arm's length negotiation
with an unaffiliated third party; (d) receipt of compensation from Giddings
other than compensation for full-time employment as a regular employee at rates
in accordance with Giddings' past practice; and/or (e) receipt of
-17-
<PAGE>
the benefit of any loans, advances or other financial assistance or tax credits
or other tax advantage provided by Giddings.
30. In the Giddings Form 8-A referenced above, Giddings did not
describe or list the aforementioned actions, stating instead that a Flip In
would result if, among other things, an Acquiring Person (as defined in the
Rights Agreement) "engages in one of a number of self-dealing transactions
------------
specified in the Rights Agreement. . . . " (emphasis added). The term "self-
dealing transaction" is nowhere defined in either the Form 8-A or the Rights
Agreement itself. Moreover, the term "self-dealing transaction" is a misleading
and inaccurate description of at least some of the triggering actions. The mere
receipt by an Acquiring Person of compensation on a part-time basis or pursuant
to a consulting arrangement, or the acquisition by an Acquiring Person of
additional stock in connection with a sale of assets to Giddings, without more,
cannot be described under all circumstances as "self-dealing," but such actions
would appear to trigger a Flip In under the Rights Agreement. Giddings' public
filings thus materially misrepresent the circumstances which may trigger the
Rights.
DEFENDANTS' VIOLATION OF THEIR FIDUCIARY DUTIES
-----------------------------------------------
31. As directors of Giddings, the individual defendants owe fiduciary
duties to the shareholders of Giddings,
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<PAGE>
including plaintiffs. They are in effect trustees for the shareholders, and are
required to consider the interests of the shareholders (along with any other
considerations appropriate under Wisconsin law) above their own personal
interests. In the context of a proposed change of control, such as is presented
by plaintiffs' tender offer and special meeting proxy contest, directors face a
grave potential conflict of interest, since their wish to retain the privileges
of office may conflict with their obligation single-mindedly to advance the best
interests of their shareholders and other corporate constituencies.
32. The individual defendants have already demonstrated that they
lack sufficient regard for their fiduciary duties and that, in their zeal to
profit from and retain their control of Giddings, they are unwilling to abide by
their fiduciary responsibilities. Thus:
(a) the individual defendants authorized the Management Purchase
Program, which contains provisions amounting to corporate waste and demonstrates
a greater concern for the financial welfare of insiders and executives than for
the shareholders of Giddings; and
(b) by his reaction to plaintiffs' attempts to discuss a consensual
transaction during the week of April 21, 1997, defendant Isles demonstrated that
he is not prepared to
-19-
<PAGE>
act in furtherance of his fiduciary duties but is motivated by a desire to
remain entrenched in office and more concerned about retaining his executive
perquisites than in fulfilling his responsibilities under Wisconsin law.
33. By virtue of the foregoing facts, Plaintiffs accordingly have
reasonable grounds to believe that defendants will misuse Giddings' "poison
pill" shareholder rights plan -- whose only proper purposes are to protect
shareholders against coercive and illegitimate takeover tactics and unfair or
inadequate offers -- to block shareholder consideration of plaintiffs' offer --
notwithstanding that that offer is extended to all Giddings' shareholders on an
equal basis, is fully financed and is for all cash at a very substantial premium
to the market price of Giddings' stock. Plaintiffs' offer cannot be perceived
by any reasonable businessperson or fiduciary as an unfair or inadequate offer -
- - particularly in light of Giddings' history of business reversals and sub-
standard stock performance. Nor -- given that plaintiffs are giving
shareholders an opportunity to vote at a special meeting for directors pledged
to enable shareholders to consider the offer -- can plaintiffs' offer be
reasonably perceived as coercive or illegitimate. Under these circumstances,
Giddings and the individual directors are obligated to redeem the Giddings
rights plan for plaintiffs' offer or any fully financed, all-cash all-share
offers at prices of $19 and above. However,
-20-
<PAGE>
defendants have by their conduct indicated that they wrongfully intend not to do
so.
34. Plaintiffs are commencing their effort to convene a special
meeting of Giddings' shareholders in accordance with the By-laws of Giddings as
they presently exist. Those By-law provisions, with which plaintiffs have fully
complied and with which they will continue to comply, detail a lengthy, tortuous
process by which the holders of 10% of Giddings' shares can convene a special
meeting. Plaintiffs are confident that, at such special meeting, shareholders
will vote for democracy and replace the incumbent directors with plaintiffs'
designees.
35. However, for that very reason, and based on the other facts
alleged herein, plaintiffs believe that defendants may either (a) purport to
"interpret" the complex By-law provisions, and/or make determinations about
plaintiffs' good faith attempts to comply therewith, with a view to precluding
or delaying the holding of the special meeting or (b) purport to amend the By-
laws to make it still more difficult to convene such a meeting. Directors
determined to oppose an unsolicited acquisition offer frequently resort to
changes in and/or overly tortured interpretations of, by-laws and shareholder
meeting
-21-
<PAGE>
procedures in their efforts to stymie and defeat the acquisition proposal.
Accordingly, while Giddings has not yet announced any such interpretations or
amendments, upon information and belief, defendants and their advisers are now
considering such measures. Any determination by defendants that the plaintiffs
have not complied with Giddings' existing By-laws would lack a good faith basis;
and any changes to Giddings' By-laws -- whether by "interpretation" or
amendments -- insofar as they may affect the ability of Giddings' shareholders
to change the composition of Giddings' board within the time periods currently
established would serve no legitimate purpose and would clearly constitute
unlawful entrenchment by the individual defendants in violation of their
fiduciary duties.
36. Giddings' response to plaintiffs' offer indicates that defendants
are entrenched in their corporate offices and intend to obstruct the appropriate
and proper consideration of plaintiffs' offer by the Giddings board and by
Giddings' shareholders, including the convening of a special meeting of Giddings
shareholders. By so entrenching themselves, defendants have violated and are
continuing to violate their fiduciary duties.
IRREPARABLE INJURY
------------------
37. Plaintiffs' efforts to restore financial strength to Giddings
through a business combination with
-22-
<PAGE>
Harnischfeger is a platform that plaintiffs believe will enjoy enormous and
widespread support among the non-management shareholders of Giddings. The proxy
contest and tender offer are classic instances of shareholder democracy and are
extensively regulated by federal law. Federal law provides plaintiffs with the
federal right to make a nationwide tender offer and close the offer upon a
federally-specified time schedule, and federal law provides the plaintiffs with
the right to solicit proxies nationwide. These federal provisions are
substantive efforts by the federal government to promote shareholder democracy,
to guarantee a free market in corporate control and to promote the national
economic welfare by providing for efficient allocation of economic resources.
To the extent defendants, by improperly manipulating the corporate machinery of
Giddings, seek to impinge upon or frustrate the exercise of plaintiffs, right to
seek to effect a business combination with Giddings, they will cause irreparable
harm to plaintiffs, to all the public shareholders of Giddings, and to the
public interest.
38. With respect to the disclosure violations of defendants, Giddings
shareholders are currently suffering irreparable harm because they are making
investment decisions concerning Giddings, and will shortly be making voting
decisions concerning Giddings, on the basis of misleading or false information.
-23-
<PAGE>
COUNT I
(Against All Defendants)
39. Plaintiffs repeat and reallege the allegations contained in
paragraphs 1 through 38 herein.
40. By virtue of the foregoing, defendants have violated, and are
continuing to violate, the provisions of the federal securities laws, and the
SEC rules and regulations promulgated thereunder, specifically Sections 10(b)
and 14(a) of the 1934 Act, 15 U.S.C. (S)(S) 78j(b), 78n(a) and SEC Rule 10b-5
and Regulation 14A, 17 C.F.R. (S)(S) 240.10b-5, 240.14a, et seq., requiring that
-- ----
SEC filings and public statements by an issuer, such as Giddings, including
proxy statements, be accurate in all material respects and contain no misleading
statements or material omissions.
41. Plaintiffs have no adequate remedy at law.
COUNT II
(Against All Individual Defendants)
42. Plaintiffs repeat and reallege the allegations contained in
paragraphs 1 through 38 above.
43. As directors of Giddings, the individual defendants are
controlling persons within the meaning of Section
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<PAGE>
20(a) of the 1934 Act and have the responsibility of insuring that the public
filings of Giddings are accurate in all material respects. Defendants have
failed to discharge this responsibility by affirmatively causing, or recklessly
failing to prevent, the errors and omissions in Giddings' public disclosures.
44. Plaintiffs have no adequate remedy at law.
COUNT III
45. Plaintiffs repeat and reallege the allegations contained in
paragraphs 1 through 38 above.
46. By virtue of the foregoing, the individual defendants have
breached, are breaching and threaten to breach their fiduciary duties to the
shareholders of Giddings.
47. Plaintiffs have no adequate remedy at law.
WHEREFORE, plaintiffs demand judgment against defendants, as follows:
A. Declaring and decreeing that any proxies obtained by defendants
through the use of the Giddings 1997 Proxy Statement are null and void, except
such proxies as may be obtained following correction, supplementation and
appropriate dissemination of the proxy materials to correct the defects alleged
herein;
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B. Declaring and decreeing that, in the event no relief is granted
prior to holding of the Giddings 1997 Annual Meeting, the results of the
election be set aside and the Court order a new election to be held upon
accurate and correct proxy disclosures;
C. Granting temporary, preliminary and permanent injunctive relief:
1. Requiring defendants to make full, complete and accurate
disclosure with respect to, inter alia, the Management Stock Purchase Program,
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the violation of Giddings' By-laws that would result from the board structure as
proposed in the 1997 Proxy Statement, and the terms and characteristics of
Giddings' "poison pill" Shareholders Rights Plan;
2. Requiring defendants to redeem, or cause the redemption of, the
Giddings share purchase rights (the "poison pill" rights);
3. Prohibiting defendants from amending the Rights Plan in any way
other than to cause its withdrawal or redemption, and prohibiting defendants
from issuing any similar or additional rights having the same or similar
characteristics as the existing Rights; and
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4. Prohibiting defendants from, without shareholder approval,
amending, deleting or modifying any provision of Giddings' existing By-laws
(including without limitation Sections 2.03, 2.05, 2.06, 2.08, 2.15, 3.01 and
3.02 thereof) or Restated Articles of Incorporation (including without
limitation Article 5 thereof) that relate to the right of shareholders to call a
Special Meeting and/or to take action at a Special Meeting to amend Giddings'
By-Laws or remove members of Giddings' board of directors; and
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D. Granting such other and further relief as the Court may deem just
and proper.
Dated: Milwaukee, Wisconsin
April 25, 1997
QUARLES & BRADY
411 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202-4497
(414) 277-5000
By:/s/ W. Stuart Parsons
------------------------------
W. Stuart Parsons
Bruce Bauer
Attorneys for Plaintiffs
Harnischfeger Industries, Inc.
and DSFA Corporation
Of Counsel:
K. Thor Lundgren
3600 South Lake Drive
St. Francis, Wisconsin 53235
(414) 486-6844
WACHTELL, LIPTON, ROSEN & KATZ
51 West 52nd Street
New York, NY 10019
(212) 403-1000
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