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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D) (1) OF THE SECURITIES EXCHANGE ACT OF 1934
NEW JERSEY STEEL CORPORATION
(NAME OF SUBJECT COMPANY)
CO-STEEL MERGER CORPORATION
CO-STEEL USA HOLDINGS, INC.
CO-STEEL INC.
(BIDDERS)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
64614410
(CUSIP NUMBER OF CLASS OF SECURITIES)
LEW C. HUTCHINSON
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CO-STEEL INC.
SCOTIA PLAZA
40 KING STREET W.
P.O. BOX 130
TORONTO, ONTARIO
CANADA M5H 3Y2
(416) 366-4500
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO
RECEIVE NOTICES AND
COMMUNICATIONS ON BEHALF OF BIDDERS)
COPIES TO:
C. KENNETH SHANK, ESQ.
WILENTZ, GOLDMAN & SPITZER
A PROFESSIONAL CORPORATION
90 WOODBRIDGE CENTER DRIVE
P.O. BOX 10
WOODBRIDGE, NEW JERSEY 07095-6117
(732) 636-8000
CALCULATION OF FILING FEE
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TRANSACTION VALUATION *AMOUNT OF FILING FEE
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$137,034,000 $27,406.80
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* For purposes of calculating amount of filing fee only. The amount assumes
the purchase of 5,958,000 shares of Common Stock, par value $.01 per share
(collectively, the "Shares"), at a price per Share of $23 in cash. Such
number of shares represents all the Shares outstanding as of November 21,
1997, plus the number of Shares issuable upon the exercise of outstanding
options or other rights to acquire Shares that have or will have vested
prior to December 31, 1997.
/ / 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.
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Amount Previously Paid: None Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
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CUSIP NO. 64614410 14D-1 PAGE 2 OF 8 PAGES
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1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES
ONLY)
CO-STEEL MERGER CORPORATION
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
3. SEC USE ONLY
4. SOURCES 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
0
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES* / /
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0
10. TYPE OF REPORTING PERSON*
0
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2
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CUSIP NO. 64614410 14D-1 PAGE 3 OF 8 PAGES
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1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES
ONLY)
CO-STEEL USA HOLDINGS, INC.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
3. SEC USE ONLY
4. SOURCES 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
0
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES* / /
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0
10. TYPE OF REPORTING PERSON*
CO
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3
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CUSIP NO. 64614410 14D-1 PAGE 4 OF 8 PAGES
</TABLE>
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1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES
ONLY)
CO-STEEL INC.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
3. SEC USE ONLY
4. SOURCES OF FUNDS*
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
CANADA
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
3,561,500 SHARES SUBJECT TO PURCHASE RIGHTS PURSUANT TO A STOCKHOLDER
AGREEMENT DATED AS OF NOVEMBER 21, 1997, AS TO WHICH SHARES THE REPORTING
PERSON DISCLAIMS BENEFICIAL OWNERSHIP
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES* / /
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
60.1%
10. TYPE OF REPORTING PERSON*
CO
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ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is New Jersey Steel Corporation, a New
Jersey corporation (the "Company"), which has its principal executive offices at
North Crossman Road, Sayreville, New Jersey 08872.
(b) This Schedule 14D-1 relates to the offer by Co-Steel Merger Corporation
(the "Purchaser"), to purchase all outstanding shares of Common Stock, par value
$0.01 per share, of the Company (the "Shares") at a price of $23 per Share, net
to the seller in cash (the "Offer Price"), upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"), copies of which are attached hereto as
Exhibits (a) (1) and (a) (2), respectively. Information concerning the number of
outstanding Shares is set forth in "Introduction" of the Offer to Purchase and
is incorporated herein by reference.
(c) Information concerning the principal market in which the Shares are
traded and the high and low sales prices of Shares for each quarterly period
during the past two years is set forth in Section 6 ("Price Range of the Shares;
Dividends on the Shares") of the Offer to Purchase and is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Schedule 14D-1 is being filed by the Purchaser, a
Delaware corporation, Co-Steel USA Holdings, Inc. ("Holdings"), a Delaware
corporation, and Co-Steel Inc., a Canadian corporation ("Parent"). The Purchaser
is a wholly-owned subsidiary of Holdings, which is a wholly-owned subsidiary of
Parent. Information concerning the principal business and the address of the
principal offices of the Purchaser, Holdings and Parent is set forth in Section
9 ("Certain Information Concerning the Purchaser, Holdings and Parent") of the
Offer to Purchase and is incorporated herein by reference. The names, business
addresses, present principal occupations or employment, material occupations,
positions, offices or employments during the last five years and citizenship of
the directors and executive officers of the Purchaser, Holdings and Parent are
set forth in Schedule I to the Offer to Purchase and are incorporated herein by
reference.
(e) and (f) The information set forth in Section 9 ("Certain Information
Concerning the Purchaser, Holdings and Parent") of the Offer to Purchase is
incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) and (b) The information set forth in Section 11 ("Contacts with the
Company; Background of the Offer") and Section 12 ("Purpose of the Offer; The
Merger Agreement; The Stockholder Agreement") of 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.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in Section 12 ("Purpose of the Offer; The
Merger Agreement; The Stockholder Agreement") of the Offer to Purchase is
incorporated herein by reference.
5
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(f) and (g) The information set forth in Section 7 ("Effect of the Offer on
the Market for the Shares; Stock Quotation; 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) and (b) The information set forth in "Introduction," Section 9 ("Certain
Information Concerning the Purchaser and Parent") and Section 12 ("Purpose of
the Offer; The Merger Agreement; The Stockholder Agreement") 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 "Introduction," Section 9 ("Certain Information
Concerning the Purchaser, Holdings and Parent"), Section 11 ("Contacts with the
Company; Background of the Offer") and Section 12 ("Purpose of the Offer; The
Merger Agreement; The Stockholder Agreement") of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 16 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) and (c) The information set forth in Section 15 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Effect of the Offer on the
Market for the Shares; Stock Quotation; Exchange Act Registration; Margin
Regulations") of the Offer to Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase, the Letter of
Transmittal and the Agreement and Plan of Merger dated as of November 21, 1997,
among the Purchaser, Parent and the Company, and The Stockholder Agreement dated
as of November 21, 1997 between Parent and Von Roll Holding AG, copies of which
are attached hereto as Exhibits (a) (1), (a) (2) and (c), respectively, is
incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a) (1) Offer to Purchase.
(a) (2) Letter of Transmittal.
(a) (3) Notice of Guaranteed Delivery.
(a) (4) Letter to Brokers, Dealers, Banks, Trust Companies and Other
Nominees.
(a) (5) Letter to Clients for use by Brokers, Dealers, Banks, Trust
Companies and Other Nominees.
6
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(a) (6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a) (7) Text of Press Release dated November 21, 1997, issued by the Parent.
(b) None.
(c) (1) Tender Offer Agreement and Agreement and Plan of Merger dated as of
November 21, 1997, among the Purchaser, Parent and the Company.
(c) (2) Stockholder Agreement dated as of November 21, 1997 between Parent
and Von Roll Holding AG.
(d) None.
(e) Not applicable.
(f) None.
7
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SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: November 28, 1997
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CO-STEEL MERGER CORPORATION
By: /s/ LEW C. HUTCHINSON
-----------------------------------------
Lew C. Hutchinson
PRESIDENT
CO-STEEL USA HOLDINGS, INC.
By: /s/ LEW C. HUTCHINSON
-----------------------------------------
Lew C. Hutchinson
PRESIDENT
CO-STEEL INC.
By: /s/ LEW C. HUTCHINSON
-----------------------------------------
Lew C. Hutchinson
PRESIDENT
</TABLE>
8
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EXHIBIT INDEX
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EXHIBIT
NUMBER EXHIBIT NAME
- --------- ---------------------------------------------------------------------------------------------------------
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(a)(1) Offer to Purchase
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9
(a)(7) Text of Press Release dated November 21, 1997, issued by Parent
(b) None
(c)(1) Tender Offer Agreement and Agreement and Plan of Merger dated as of November 21, 1997, among the
Purchaser, Parent and the Company
(c)(2) Shareholder Agreement dated as of November 21, 1997 between the Parent and Von Roll Holding AG
(d) None
(e) Not applicable
(f) None
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9
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
NEW JERSEY STEEL CORPORATION
AT
$23 NET PER SHARE
BY
CO-STEEL MERGER CORPORATION
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
CO-STEEL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
JANUARY 8, 1998, UNLESS EXTENDED
THE BOARD OF DIRECTORS OF NEW JERSEY STEEL CORPORATION HAS UNANIMOUSLY
APPROVED THE OFFER AND THE MERGER REFERRED TO HEREIN AND DETERMINED THAT THE
TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
STOCKHOLDERS OF THE COMPANY AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE
COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES THAT WOULD REPRESENT AT LEAST 80% OF THE OUTSTANDING SHARES (DETERMINED
ON A FULLY DILUTED BASIS FOR ALL OUTSTANDING STOCK OPTIONS AND ANY OTHER RIGHTS
TO ACQUIRE SHARES THAT ARE OR WOULD BE VESTED PRIOR TO DECEMBER 31, 1997) AND
(II) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT
OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER APPLICABLE TO THE PURCHASE
OF SHARES PURSUANT TO THE OFFER ("HSR ACT") HAVING EXPIRED OR BEEN TERMINATED
AND (III) THE REQUIREMENTS OF THE NEW JERSEY INDUSTRIAL SITE RECOVERY ACT
("ISRA") HAVING BEEN SATISFIED THROUGH A REMEDIATION AGREEMENT WITH THE NEW
JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION ("NJDEP") OR OTHERWISE.
------------------------
IMPORTANT
ANY STOCKHOLDER DESIRING TO TENDER ALL OR ANY PORTION OF SUCH STOCKHOLDER'S
SHARES (AS DEFINED HEREIN) SHOULD EITHER (1) COMPLETE AND SIGN THE LETTER OF
TRANSMITTAL OR A FACSIMILE COPY THEREOF IN ACCORDANCE WITH THE INSTRUCTIONS IN
THE LETTER OF TRANSMITTAL, HAVE SUCH STOCKHOLDER'S SIGNATURE THEREON GUARANTEED
IF REQUIRED BY INSTRUCTION 1 TO THE LETTER OF TRANSMITTAL, MAIL OR DELIVER THE
LETTER OF TRANSMITTAL OR SUCH FACSIMILE, OR IN THE CASE OF A BOOK-ENTRY TRANSFER
EFFECTED PURSUANT TO THE PROCEDURE SET FORTH IN SECTION 2, AN AGENT'S MESSAGE
(AS DEFINED HEREIN), AND ANY OTHER REQUIRED DOCUMENTS, TO THE DEPOSITARY AND
EITHER DELIVER THE CERTIFICATES FOR SUCH SHARES TO THE DEPOSITARY ALONG WITH THE
LETTER OF TRANSMITTAL OR FACSIMILE OR DELIVER SUCH SHARES PURSUANT TO THE
PROCEDURE FOR BOOK-ENTRY TRANSFER SET FORTH IN SECTION 2 OR (2) REQUEST SUCH
STOCKHOLDER'S BROKER, DEALER, BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE
TRANSACTION FOR SUCH STOCKHOLDER. A STOCKHOLDER HAVING SHARES REGISTERED IN THE
NAME OF A BROKER, DEALER, BANK, TRUST COMPANY OR OTHER NOMINEE MUST CONTACT SUCH
BROKER, DEALER, BANK, TRUST COMPANY OR OTHER NOMINEE IF SUCH STOCKHOLDER DESIRES
TO TENDER SUCH SHARES.
A STOCKHOLDER WHO DESIRES TO TENDER SHARES AND WHOSE CERTIFICATES FOR SUCH
SHARES ARE NOT IMMEDIATELY AVAILABLE OR WHO CANNOT COMPLY IN A TIMELY MANNER
WITH THE PROCEDURE FOR BOOK-ENTRY TRANSFER, OR WHO CANNOT DELIVER ALL REQUIRED
DOCUMENTS TO THE DEPOSITARY PRIOR TO THE EXPIRATION OF THE OFFER, MAY TENDER
SUCH SHARES BY FOLLOWING THE PROCEDURE FOR GUARANTEED DELIVERY SET FORTH IN
SECTION 2.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THIS OFFER
TO PURCHASE, THE LETTER OF TRANSMITTAL AND THE NOTICE OF GUARANTEED DELIVERY MAY
BE DIRECTED TO THE INFORMATION AGENT AT ITS ADDRESS AND TELEPHONE NUMBER SET
FORTH ON THE BACK COVER OF THIS OFFER TO PURCHASE.
November 28, 1997
<PAGE>
TABLE OF CONTENTS
INTRODUCTION
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PAGE
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1. Terms of the Offer................................................................................... 4
2. Procedure for Tendering Shares....................................................................... 6
3. Withdrawal Rights.................................................................................... 9
4. Acceptance for Payment and Payment................................................................... 9
5. Certain Federal Income Tax Consequences.............................................................. 11
6. Price Range of the Shares; Dividends on the Shares................................................... 11
7. Effect of the Offer on the Market for the Shares; Stock Quotation; Exchange Act Registration; Margin
Regulations.......................................................................................... 12
8. Certain Information Concerning the Company........................................................... 13
9. Certain Information Concerning the Purchaser, Holdings and Parent.................................... 15
10. Source and Amount of Funds........................................................................... 16
11. Contacts with the Company; Background of the Offer................................................... 16
12. Purpose of the Offer; The Merger Agreement; The Stockholder Agreement................................ 17
13. Dividends and Distributions.......................................................................... 26
14. Certain Conditions of the Offer...................................................................... 26
15. Certain Legal Matters................................................................................ 28
16. Fees and Expenses.................................................................................... 29
17. Miscellaneous........................................................................................ 30
Schedule I--Directors and Executive Officers......................................................... 31
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2
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To the Holders of Common Stock of
New Jersey Steel Corporation:
INTRODUCTION
Co-Steel Merger Corporation, a Delaware corporation (the "Purchaser") and an
indirect wholly-owned subsidiary of Co-Steel Inc., a Canadian corporation (the
"Parent"), is offering to purchase all outstanding shares (the "Shares") of
Common Stock, par value $.01 per share ("Company Common Stock"), of New Jersey
Steel Corporation, a Delaware corporation (the "Company"), at $23 per Share (the
"Offer Price"), net to the seller in cash, upon the terms and subject to the
conditions set forth in this Offer to Purchase dated November 28, 1997 and in
the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer.
Purchaser will pay all fees and expenses of PNC Bank, National Association,
which is acting as the Depositary (the "Depositary") and D.F. King & Co., Inc.,
which is acting as Information Agent (the "Information Agent"), incurred in
connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER AND
THE MERGER (AS DEFINED BELOW) AND DETERMINED THAT THE TERMS OF THE OFFER AND THE
MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE
COMPANY AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE
OFFER AND TENDER THEIR SHARES.
Von Roll Holding AG ("Von Roll"), a Swiss corporation and the owner of an
aggregate of 3,561,500 Shares (approximately 60% of the total outstanding), has
entered into a Stockholder Agreement, as defined herein, with Parent, whereby
subject to the terms and conditions thereof, Von Roll has agreed to tender all
of such Shares pursuant to the Offer. The Stockholder Agreement is more fully
described in Section 12.
BT Wolfensohn has delivered to the Board of Directors of the Company its
written opinion to the effect that, as of the date of such opinion, the $23 per
Share in cash to be received by the holders of Shares in the Offer and the
Merger is fair to such holders (other than Von Roll, as to which no opinion is
expressed) from a financial point of view. Such opinion is set forth in full as
an exhibit to the Company's Solicitation/ Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9"), which is being mailed to stockholders of the
Company herewith. STOCKHOLDERS ARE URGED TO, AND SHOULD, READ SUCH OPINION
CAREFULLY IN ITS ENTIRETY.
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in Section
1) such number of Shares that would constitute at least 80% of the outstanding
Shares (determined on a fully diluted basis for all outstanding stock options
and any other rights to acquire Shares that have vested or will have vested
prior to December 31, 1997) (the "Minimum Condition"), (2) any waiting period
under the HSR Act and the regulations thereunder applicable to the purchase of
Shares pursuant to the Offer having expired or been terminated and (3) the
requirements of ISRA having been satisfied through a Remediation Agreement with
the NJDEP or otherwise. The Purchaser reserves the right (subject to obtaining
the consent of the Company and the applicable rules and regulations of the
Securities and Exchange Commission (the "Commission")), which it presently has
no intention of exercising, to waive or reduce the Minimum Condition and to
elect to purchase, pursuant to the Offer, less than the Minimum Number of Shares
(as hereinafter defined). See Sections 1 and 14.
The Offer is being made pursuant to the Tender Offer Agreement and Agreement
and Plan of Merger dated as of November 21, 1997 (the "Merger Agreement") among
Parent, the Purchaser, Von Roll and the
3
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Company pursuant to which, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, the Purchaser will be merged with
the Company, with the Company surviving the merger (as such, the "Surviving
Corporation") as an indirect wholly-owned subsidiary of Parent (the "Merger").
In the Merger, each outstanding Share (other than Shares owned by the Company or
by any subsidiary of the Company, Parent, the Purchaser or any other subsidiary
of Parent or by stockholders, if any, who are entitled to and who properly
exercise dissenters' rights under Delaware law) will be converted into the right
to receive the per Share price paid in the Offer in cash, without interest (the
"Merger Consideration"). See Section 12.
The Merger is subject to a number of conditions, including approval by
stockholders of the Company, if such approval is required by applicable law. In
the event the Purchaser acquires 90% or more of the outstanding Shares pursuant
to the Offer or otherwise, the Purchaser will effect the Merger pursuant to the
short-form merger provisions of the Delaware General Corporation Law (the
"DGCL"), without prior notice to, or any action by, any other stockholder of the
Company. See Section 12.
The Company has informed the Purchaser that as of the close of business on
November 21, 1997, there were 5,920,500 Shares issued and outstanding and 37,500
Shares are reserved for future issuance pursuant to outstanding stock options
that have vested or will have vested prior to December 31, 1997. Based upon the
foregoing, the Purchaser believes that the Minimum Condition will be satisfied
if at least 4,766,400 Shares (the "Minimum Number of Shares") are validly
tendered and not withdrawn prior to the Expiration Date. If the Minimum
Condition is satisfied and the Purchaser accepts for payment Shares tendered
pursuant to the Offer, the Purchaser will be able to elect a majority of the
members of the Company's Board of Directors and to effect the Merger without the
affirmative vote of any other stockholder of the Company.
The Merger Agreement is more fully described in Section 12. Certain Federal
income tax consequences of the sale of Shares pursuant to the Offer and the
exchange of Shares for the Merger Consideration pursuant to the Merger are
described in Section 5.
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for all Shares validly tendered prior to the
Expiration Date and not theretofore withdrawn in accordance with Section 3. The
term "Expiration Date" means 5:00 p.m., New York City time, on Thursday, January
8, 1998, unless and until the Purchaser 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, shall expire.
Subject to the terms of the Merger Agreement (see Item 12) and the
applicable rules and regulations of the Commission, the Purchaser expressly
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 (1) extend the period of time during which the Offer is open,
and thereby delay acceptance for payment of and the payment for any Shares, by
giving oral or written notice of such extension to the Depositary and (2) amend
the Offer in any other respect by giving oral or written notice of such
amendment to the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
If by 5:00 p.m., New York City time, on Thursday, January 8, 1998 (or any
other date or time then set as the Expiration Date), any or all conditions to
the Offer have not been satisfied or waived, the Purchaser reserves the right
(but shall not be obligated), subject to the terms and conditions contained in
the Merger Agreement and to the applicable rules and regulations of the
Commission, to (1) terminate the Offer and not accept for payment any Shares and
return all tendered Shares to tendering stockholders, (2) waive all
4
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the unsatisfied conditions (other than the Minimum Condition) and, subject to
complying with the terms of the Merger Agreement and the applicable rules and
regulations of the Commission, accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn, (3) extend
the Offer and, subject to the right of stockholders to withdraw Shares until the
Expiration Date, retain the Shares that have been tendered during the period or
periods for which the Offer is extended or (4) amend the Offer.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer (other than as required by the Merger Agreement). Any
extension, waiver, amendment or termination will be followed as promptly as
practicable by public announcement. In the case of an extension, Rule 14e-1(d)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
requires that the announcement be issued no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date in
accordance with the public announcement requirements of Rule 14d-4 (c) under the
Exchange Act. 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 stockholders in connection with the
Offer be promptly disseminated to stockholders in a manner reasonably designed
to inform stockholders of such change), and without limiting the manner in which
the Purchaser may choose to make any public announcement, the Purchaser will not
have any obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service.
In the Merger Agreement the Purchaser has agreed that it will not, without
the prior consent of the Company, extend the Offer, except that, without the
consent of the Company, the Purchaser may extend the Offer (1) if at the
scheduled or extended Expiration Date any of the conditions to the Purchaser's
obligations to accept Shares for payment are not satisfied or waived, until such
time as such conditions are satisfied or waived, (2) for any period required by
any rule, regulation, interpretation or position of the Commission or the staff
thereof applicable to the Offer and (3) on one or more occasions for an
aggregate period of not more than 10 business days beyond the latest expiration
date that would otherwise be permitted under clause (1) or (2) of this sentence,
if on such expiration date there shall not have been tendered at least 90% of
the outstanding Shares. The Merger Agreement further provides that if all of the
conditions to the Offer are not satisfied on any scheduled expiration date of
the Offer then, provided that all such conditions are reasonably capable of
being satisfied, Purchaser will extend the Offer from time to time until such
conditions are satisfied or waived, provided that Purchaser will not be required
to extend the Offer beyond May 5, 1998. As used in this Offer to Purchase,
"business day" has the meaning set forth in Rule 14d-1 under the Exchange Act.
In addition, the Purchaser has agreed in the Merger Agreement that it will
not, without the consent of the Company, (1) reduce the number of Shares subject
to the Offer, (2) reduce the Offer Price, (3) amend or add to the Offer
conditions, (4) extend the Offer, except as provided above, (5) change the form
of consideration payable in the Offer or (6) amend any other term of the Offer
in any manner adverse to the holders of the Shares.
If the Purchaser extends the Offer or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its acceptance for
payment of or payment for Shares or it is unable to pay for Shares pursuant to
the Offer for any reason, then, without prejudice to the Purchaser's rights
under the Offer, the Depositary may retain tendered Shares on behalf of the
Purchaser, and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to withdrawal rights as described in Section 3.
However, the ability of the Purchaser to delay the payment for Shares that the
Purchaser has accepted for payment is limited by Rule 14e-l under the Exchange
Act, which requires that a bidder pay the consideration offered or return the
securities deposited by or on behalf of holders of securities promptly after the
termination or withdrawal of such bidder's offer.
5
<PAGE>
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
(including, with the Company's consent, a waiver of the Minimum Condition), the
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-l under the
Exchange Act. The minimum period during which an offer must remain open
following material changes in the terms of the offer or information concerning
the offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. With
respect to a change in price or a change in the percentage of securities sought,
a minimum period of 10 business days is generally required to allow for adequate
dissemination to stockholders.
Consummation of the Offer is conditioned upon satisfaction of the Minimum
Condition, the expiration or termination of all waiting periods imposed by the
HSR Act and satisfaction of the requirements of ISRA and the other conditions
set forth in Section 14 having been satisfied. Subject to the terms and
conditions contained in the Merger Agreement, the Purchaser reserves the right
(but shall not be obligated) to waive any or all such conditions.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of the Shares. This Offer to Purchase, the related Letter of Transmittal
and other relevant materials will be mailed by the Purchaser to record holders
of Shares and will be furnished by the Purchaser to brokers, dealers, banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder lists or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares.
2. PROCEDURE FOR TENDERING SHARES
VALID TENDER. For a stockholder validly to tender Shares pursuant to the
Offer, either (1) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees, or in
the case of a book-entry transfer, an Agent's Message, and any other documents
required by the Letter of Transmittal, must be received by the Depositary at one
of its addresses set forth on the back cover of this Offer to Purchase prior to
the Expiration Date and either certificates for tendered Shares must be received
by the Depositary at one of such addresses or such Shares must be delivered
pursuant to the procedure for book-entry transfer set forth below (and a
Book-Entry Confirmation (as defined below) received by the Depositary), in each
case prior to the Expiration Date, or (2) the tendering stockholder must comply
with the guaranteed delivery procedure set forth below.
The Depositary will establish an account with respect to the Shares at The
Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of
the Offer within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account in accordance with the Book-Entry Transfer Facility's procedures for
such transfer. However, although delivery of Shares may be effected through
book-entry transfer into the Depositary's account at the 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
stockholder must comply with the guaranteed delivery procedure described below.
The confirmation of a book-entry transfer of Shares into the Depositary's
account at the Book-Entry Transfer Facility as described above is referred to
herein as a "Book-Entry Confirmation." DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
6
<PAGE>
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 the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal if (1) the Letter of Transmittal is signed by the registered holder
(which term, for purposes of this Section, includes any participant in a
Book-Entry Transfer Facility's system whose name appears on a security position
listing as the owner of the Shares) of Shares tendered therewith unless such
registered holder has completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the Letter
of Transmittal or (2) such Shares are tendered for the account of a financial
institution (including most commercial banks, savings and loan associations and
brokerage houses) that is a participant in the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (such participant, an "Eligible
Institution"). In all other cases, all signatures on the Letters of Transmittal
must be guaranteed by an Eligible Institution. See Instructions 1 and 5 to the
Letter of Transmittal. If the certificates for Shares are registered in the name
of a person other than the signer of the Letter of Transmittal, or if payment is
of a person other than the signer of the Letter of Transmittal, or if payment is
to be made or certificates for Shares not tendered or not accepted for payment
are to be issued 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 or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as aforesaid.
See Instruction 5 to the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or 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 stockholder's tender may be
effected if all the following conditions are met:
(1) such tender is made by or through an Eligible Institution;
(2) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Purchaser is received by the
Depositary, as provided below, prior to the Expiration Date; and
(3) the certificates for all tendered Shares, in proper form for transfer
(or a Book-Entry Confirmation with respect to such Shares), together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and any other documents required by the
Letter of Transmittal, are received by the Depositary within three trading days
after the date of execution of such Notice of Guaranteed Delivery. A "trading
day" is any day on which the New York Stock Exchange, Inc. (the "NYSE") is open
for business.
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<PAGE>
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mail to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (1) certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (2) 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 (3) any other documents required by the Letter of Transmittal.
Accordingly, tendering stockholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations are actually
received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The valid tender of Shares pursuant to one of the procedures described above
will constitute a binding agreement between the tendering stockholder and the
Purchaser upon the terms and subject to the conditions of the Offer.
APPOINTMENT. By executing a Letter of Transmittal as set forth above, the
tendering stockholder will irrevocably appoint designees of the Purchaser as
such stockholder'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 stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other Shares or other securities or rights issued or issuable in respect
of such Shares on or after November 21, 1997. All such proxies shall be
considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, the Purchaser accepts for
payment Shares tendered by such stockholder as provided herein. Upon such
acceptance for payment, all prior powers of attorney and proxies given by such
stockholder with respect to such Shares or other securities or rights will,
without further action, be revoked and no subsequent powers of attorney and
proxies 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 Shares or other securities or rights in
respect of any annual, special or adjourned meeting of the Company's
stockholders, or otherwise, as they in their sole discretion deem proper. The
Purchaser reserves the right to require that, in order for Shares to be deemed
validly tendered, immediately upon the Purchaser's acceptance for payment of
such Shares, the Purchaser must be able to exercise full voting and other rights
with respect to such Shares and other securities or rights, including voting at
any meeting of stockholders then scheduled.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any or all tenders 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 defect or irregularity in any tender with respect to any particular Shares,
whether or not similar defects or irregularities are waived in the case of other
Shares. No tender of Shares will be deemed to have been validly made until all
defects or irregularities relating thereto have been cured or waived. None of
the Purchaser, Parent, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification. The
Purchaser's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding.
BACKUP WITHHOLDING. In order to avoid "backup withholding" of Federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption
8
<PAGE>
applies, provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on a Substitute Form W-9 and certify under penalty
of perjury that such TIN is correct and that such stockholder is not subject to
backup withholding. Certain stockholders (including, among others, all
corporations and certain foreign individuals and entities) are not subject to
backup withholding. If a stockholder does not provide its correct TIN or fails
to provide the certifications described above, the Internal Revenue Service
("IRS") may impose a penalty on such stockholder and payment of cash to such
stockholder pursuant to the Offer may be subject to backup withholding of 31%.
All stockholders surrendering Shares pursuant to the Offer should complete and
sign the main signature form and the Substitute Form W-9 included as part of the
Letter of Transmittal to provide the information and certification necessary to
avoid backup withholding (unless an applicable exemption exists and is proven in
a manner satisfactory to the Purchaser and the Depositary). Noncorporate foreign
stockholders should complete and sign the main signature form and a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. See Instruction 9 to the
Letter of Transmittal.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to
the procedures set forth below at any time prior to the Expiration Date and,
unless theretofore accepted for payment and paid for by the Purchaser pursuant
to the Offer, may also be withdrawn at any time after January 26, 1998.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. Withdrawals of tenders of Shares may not be rescinded, and
any Shares properly withdrawn will thereafter be deemed not validly tendered for
any purposes of the Offer. However, withdrawn Shares may be retendered by again
following one of the procedures described in Section 2 at any time prior to the
Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Parent, the Depositary, the Information Agent or any other person
will be under any duty to give notification of any defects or irregularities any
notice of withdrawal or incur any liability for failure to give any such
notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms, and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay for all Shares
validly tendered prior to the Expiration Date and not properly withdrawn in
accordance with Section 3 promptly after the Expiration Date. Any determination
concerning the satisfaction of such terms and conditions will be within the sole
discretion of the Purchaser, and such determination will be final and binding on
all tendering stockholders. See Sections 1 and 14. The Purchaser expressly
reserves the right, in its sole discretion, to delay acceptance for payment of
or payment for Shares in order to comply in whole or in part with any applicable
law, including, without limitation, the HSR Act. Any such delays will be
effected in compliance with Rule 14e-1(c) under the Exchange Act (relating to
the
9
<PAGE>
Purchaser's obligation to pay for or return tendered Shares promptly after the
termination or withdrawal of the Offer).
Parent will 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 15th day after the
date such form is filed, unless early termination of the waiting period is
granted. In addition, the Antitrust Division of the Department of Justice (the
"Antitrust Division") or the Federal Trade Commission (the "FTC") may extend the
waiting period by requesting additional information or documentary material from
Parent. If such a request is made, such waiting period will expire at 11:59
p.m., New York City time, on the 10th day after substantial compliance by Parent
with such request. See Section 15 hereof for additional information concerning
the HSR Act and the applicability of the antitrust laws to the Offer.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (1) certificates for
such Shares (or timely Book-Entry Confirmation of a transfer of such Shares as
described in Section 2), (2) a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees and
(3) any other documents required by the Letter of Transmittal. The per Share
consideration paid to any stockholder pursuant to the Offer will be the highest
per Share consideration paid to any other stockholder pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to the Purchaser and
not withdrawn, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance for payment of such Shares. Payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering stockholders. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE
PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange Act,
which requires that a tender offerer pay the consideration offered or return the
tendered securities promptly after the termination or withdrawal of a tender
offer), the Depositary may, nevertheless, on behalf of the Purchaser, retain
tendered Shares. Any such Shares may not be withdrawn except to the extent
tendering stockholders are entitled to exercise, and duly exercise, withdrawal
rights as described in Section 3.
If any tendered Shares are not purchased pursuant to the Offer because of an
invalid tender or otherwise, certificates for any such Shares will be returned,
without expense to the tendering stockholder (or, in the case of Shares
delivered by book-entry transfer of such Shares into the Depositary's account at
the Book-Entry Transfer Facility pursuant to the procedure set forth Section 2,
such Shares will be credited to an account maintained at the Book-Entry Transfer
Facility), as promptly as practicable after the expiration or termination of the
Offer. The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Parent, or to one or more direct or indirect
wholly-owned subsidiaries of Parent, the right to purchase Shares tendered
pursuant to the Offer. 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 stockholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.
10
<PAGE>
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Sales of Shares pursuant to the Offer (and the receipt of cash by
stockholders of the Company pursuant to the Merger) will be taxable transactions
for Federal income tax purposes under the Internal Revenue Code of 1986, as
amended (the "Code"), and may also be taxable transactions under applicable
state, local, foreign and other tax laws. For Federal income tax purposes, a
tendering stockholder will generally recognize gain or loss equal to the
difference between the amount of cash received by the stockholder pursuant to
the Offer (or to be received pursuant to the Merger) and the aggregate tax basis
in the Shares tendered by the stockholder and purchased pursuant to the Offer
(or canceled pursuant to the Merger). Gain or loss will be calculated separately
for each block of Shares tendered and purchased pursuant to the Offer (or
canceled pursuant to the Merger). If tendered Shares are held by a tendering
stockholder as capital assets, gain or loss recognized by the tendering
stockholder will be capital gain or loss, which will be long-term capital gain
or loss if the tendering stockholder's holding period for the Shares exceeds one
year.
A stockholder (other than certain exempt stockholders including, among
others, all corporations and certain foreign individuals and entities) that
tenders Shares may be subject to 31% backup withholding unless the stockholder
provides its TIN and certifies that such number is correct or properly certifies
that it is awaiting a TIN. A stockholder that does not furnish its TIN may be
subject to a penalty imposed by the IRS. Each stockholder should complete and
sign the Substitute Form W-9 included as part of the Letter of Transmittal so as
to provide the information and certification necessary to avoid backup
withholding.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. 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 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 stockholder upon filing an income tax return.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE WITH RESPECT TO SHARES
RECEIVED PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS
COMPENSATION OR WITH RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL TAX
TREATMENT UNDER THE CODE, SUCH AS NON-U.S. PERSONS, LIFE INSURANCE COMPANIES,
TAX-EXEMPT ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND MAY NOT APPLY TO A
HOLDER OF SHARES IN LIGHT OF ITS INDIVIDUAL CIRCUMSTANCES. STOCKHOLDERS ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL
OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE MERGER.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
The Shares are traded in the over-the-counter market and prices are quoted
on The Nasdaq Stock Market's National Market System under the symbol "NJST." The
following table sets forth, for each of the
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<PAGE>
periods indicated, the high and low reported last sale prices per Share, as
reported by the Nasdaq National Market and the Dow Jones News Retrieval Service.
<TABLE>
<CAPTION>
SALES PRICE
------------------
<S> <C> <C>
HIGH LOW
------- -------
Fiscal Year 1995
First Quarter (ended February 29, 1995)............................................................ $14 3/4 $12
Second Quarter..................................................................................... 12 3/4 11 3/4
Third Quarter...................................................................................... 12 1/4 9 3/4
Fourth Quarter..................................................................................... 10 1/2 9 1/4
1996
First Quarter...................................................................................... $10 1/2 $ 7 3/4
Second Quarter..................................................................................... 9 6 1/2
Third Quarter...................................................................................... 9 6
Fourth Quarter..................................................................................... 7 1/2 3 3/4
1997
First Quarter...................................................................................... $ 7 1/4 $ 3 3/4
Second Quarter..................................................................................... 6 7/8 4
Third Quarter...................................................................................... 10 1/2 6 3/8
Fourth Quarter (through November 26, 1997)......................................................... 22 5/8 8 7/8
</TABLE>
On November 20, 1997, the last full day of trading before the public
announcement of the execution of the Merger Agreement, the reported last sale
price of the Shares on the Nasdaq National Market was $15 5/8 per Share. On
November 26, 1997, the last full day of trading before the commencement of the
Offer, the reported last sale price of the Shares on the Nasdaq National Market
was $22 1/2 per Share. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET
QUOTATIONS FOR THE SHARES.
According to the Company's Annual Report on Form 10-K for the fiscal year
ended November 30, 1996 (the "Form 10-K"), the Company has not paid cash
dividends on its Common Stock since 1991 and does not plan to pay cash dividends
to its stockholders in the foreseeable future.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK QUOTATION; EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS
The purchase of Shares pursuant to the Offer will reduce the number of
holders of Shares and the number of Shares that might otherwise trade publicly
and could adversely affect the liquidity and market value of the remaining
Shares held by the public.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the National Association of
Securities Dealers, (the "NASD") for continued inclusion in the Nasdaq National
Market (the top tier market of The Nasdaq Stock Market), which requires that an
issuer have at least 200,000 publicly held shares, held by at least 400
stockholders or 300 stockholders of round lots, with a market value of
$1,000,000, and have net tangible assets of at least either $2,000,000 or
$4,000,000, depending on profitability levels during the issuer's four most
recent fiscal years. If these standards are not met, the Shares might
nevertheless continue to be included in The Nasdaq Stock Market with quotations
published in the Nasdaq "additional list" or in one of the "local lists," but if
the number of holders of the Shares were to fall below 300, or if the number of
publicly held Shares were to fall below 100,000 or there were not at least two
registered and active market makers for the Shares, the NASD's rules provide
that the Shares would no longer be "qualified" for Nasdaq Stock Market reporting
and The Nasdaq Stock Market would cease to provide any quotations. Shares held
directly or indirectly by directors, officers or beneficial owners of more than
10% of the Shares are not considered as being publicly held for this purpose.
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<PAGE>
According to the Company, as of November 21, 1997, there were approximately
82 holders of record of Shares (and an estimated 1,800 beneficial owners of
Shares) and 2,359,000 publicly held Shares were outstanding. If, as a result of
the purchase of Shares pursuant to the Offer, the Shares no longer meet the
requirements of the NASD for continued inclusion in The Nasdaq Stock Market or
the Nasdaq National Market, as the case may be, the market for Shares could be
adversely affected.
In the event that the Shares no longer meet the requirements of the NASD for
quotation through any tier of The Nasdaq Stock Market, it is possible that the
Shares would continue to trade in the over-the-counter market and that price
quotations would be reported by other sources. The extent of the public market
for the Shares and the availability of such quotations would, however, depend
upon the number of holders of Shares remaining at such time, the interests in
maintaining a market in Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act, as described
below, and other factors.
The Shares are currently registered under the Exchange Act. Registration of
the Shares under the Exchange Act may be terminated upon application of the
Company to the Commission if the Shares are neither listed on a national
securities exchange nor held by 300 or more holders of record. Termination of
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to its stockholders and to
the Commission and would make certain provisions of the Exchange Act no longer
applicable to the Company, such as the shortswing 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
stockholders' meetings and the related requirement of furnishing an annual
report to stockholders 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 144A promulgated
under the Securities Act of 1933, may be impaired or eliminated. The Purchaser
intends to seek to cause the Company to apply for termination of registration of
the Shares under the Exchange Act as soon after the completion of the Offer as
the requirements for such termination are met.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will cease to be reported on The Nasdaq Stock Market and the
registration of the Shares under the Exchange Act will be terminated following
the consummation of the Merger.
The 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 Shares. Depending upon factors similar to those
described above regarding listing and market quotations, it is possible that,
following the Offer, the Shares would no longer constitute "margin securities"
for the purposes of the margin regulations of the Federal Reserve Board and
therefore could no longer be used as collateral for loans made by brokers. If
registration of Shares under the Exchange Act were terminated, the Shares would
no longer be "margin securities" or be eligible for Nasdaq reporting.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Delaware corporation with its principal executive offices
at North Crossman Road, Sayreville, New Jersey 08872. According to the Form
10-K, the Company's principal line of business is producing steel and steel
products, principally concrete reinforcing bar, used in the construction
industry. The Company owns and operates a steel mini-mill located in Sayreville,
New Jersey.
Set forth below is certain selected consolidated financial information with
respect to the Company and its subsidiaries excerpted or derived from the
information contained in the Form 10-K and the Company's Quarterly Report on
Form 10-Q for the nine months ended August 31, 1997. More comprehensive
financial information is included in such reports and other documents filed by
the Company with the
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Commission, and the following summary is qualified in its entirety by reference
to such reports and such other documents and all the financial information
(including any related notes) contained therein. Such reports and other
documents should be available for inspection and copies thereof should be
obtainable in the manner set forth below under "Available Information."
NEW JERSEY STEEL CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED AUGUST 31, YEAR ENDED NOVEMBER 30,
---------------------- ----------------------------------
1997 1996 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Total net revenues................................... $ 130,145 $ 102,873 $ 145,209 $ 137,236 $ 137,755
Operating income (loss).............................. 5,829 (10,263) (13,130) 818 2,025
Net income (loss).................................... 1,514 (11,017) (14,922) 705 2,599
Net income (loss) per share (Primary)................ $ 0.20 $ (1.91) $ 2.52 $ 0.12 $ 0.44
</TABLE>
<TABLE>
<CAPTION>
AT AUGUST 31, AT NOVEMBER 30,
-------------------- --------------------
1997 1996 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total current assets.................................................. $ 45,852 $ 44,271 $ 40,958 $ 40,677
Total assets.......................................................... 151,871 154,597 151,370 146,243
Total current liabilities............................................. 70,403 40,558 39,707 37,647
Long-term obligations................................................. 4,875 35,004 36,264 18,275
Total stockholders' equity............................................ $ 76,593 $ 79,035 $ 75,399 $ 90,321
</TABLE>
CERTAIN COMPANY ESTIMATES. During the course of Parent's investigation
concerning the Company, the Company provided Parent with certain financial
projections of the Company's future performance. The following is a summary of
such projections:
FINANCIAL PROJECTIONS
(FIGURES IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED NOVEMBER 30,
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1997E 1998E 1999E 2000E 2001E 2002E
---------- ---------- ---------- ---------- ---------- ----------
Tons Sold........................................ 638,942 680,804 690,854 698,404 698,346 705,889
Net Sales........................................ $ 188,354 $ 199,773 $ 200,115 $ 201,900 $ 202,155 $ 203,954
Earnings before Interest, Income Taxes
Depreciation and Amortization.................. $ 18,951 $ 21,158 $ 21,031 $ 21,482 $ 21,990 $ 22,441
Earnings Before Interest and Income Taxes........ $ 10,094 $ 12,347 $ 12,752 $ 12,960 $ 13,221 $ 13,411
Capital Expenditures............................. $ 6,021 $ 5,500 $ 4,000 $ 4,000 $ 4,000 4,000
</TABLE>
The Purchaser understands that the Company does not as a matter of course
make public any estimates as to future performance or earnings, and the
projections set forth above are included in this Offer to Purchase only because
the information was provided to Parent. The projections were not prepared with a
view to public disclosure or compliance with the published guidelines of the
Commission or the guidelines established by the American Institute of Certified
Public Accountants regarding projections or forecasts. The projections were
based on a number of assumptions that are beyond the control of the Company, the
Purchaser or Parent or their respective advisors, including economic forecasting
(both
14
<PAGE>
general and specific to the Company's business), which is inherently uncertain
and subjective. None of the Company, the Purchaser or Parent or their respective
advisers assumes any responsibility for the accuracy of any of the projections.
The inclusion of the foregoing projections should not be regarded as an
indication that the Company, the Purchaser, Parent or any other person who
received such information considers it an accurate prediction of future events.
Neither the Company, the Purchaser nor Parent intends to update, revise or
correct such projections if they become inaccurate (even in the short term).
AVAILABLE INFORMATION. The Company is subject to the reporting requirements
of the Exchange Act and, in accordance therewith, is required to file reports
and other information with the Commission relating to its business, financial
condition and other matters. Information as of particular dates concerning the
Company's directors and officers, their remuneration, stock concerning the
Company's directors and officers, their remuneration, stock options granted to
them, the principal holders of the Company's securities and any material
interest of such persons in transactions with the Company is required to be
disclosed in proxy statements distributed to the Company's stockholders and
filed with the Commission. Such reports, proxy statements and other information
should be available for inspection at the public reference facilities of the
Commission located at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the Commission located in the Northwestern Atrium Center,
500 West Madison Street (Suite 1400), Chicago, Illinois 60661 and Seven World
Trade Center, 13th Floor, New York, New York 10048. Copies should be obtainable,
by mail, upon payment of the Commission's customary charges, by writing to the
Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
The Commission maintains a web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. Such reports, proxy and information statements and other
information may be found on the Commission's web site, the address of which is:
http.//www.sec.gov. Such information should also be on file at The Nasdaq
National Market, 1735 K Street, N.W., Washington, D.C. 20006.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or based upon
publicly available documents on file with the Commission and other publicly
available information. Although the Purchaser and Parent 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.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER, HOLDINGS AND PARENT
The Purchaser, a Delaware corporation, an indirect wholly- owned subsidiary
of Parent, was organized to acquire the Company and has not conducted any
unrelated activities since its organization. All outstanding shares of capital
stock of the Purchaser are directly owned by Co-Steel USA Holdings, Inc.
("Holdings"), a direct wholly-owned subsidiary of Parent, which was organized
solely for purposes of the transactions described in this Offer to Purchase and
has not conducted any unrelated activities since its organization. The
registered offices of the Purchaser and Holdings are located at 1013 Centre
Road, Wilmington, Delaware 19805.
Parent manufactures and markets special quality steel bar and rod,
reinforcing steel bar and rod, merchant bar, structural shapes and flat rolled
steel products used principally in the construction, automotive, appliance,
machinery and equipment industries. Parent is a Canadian corporation with its
principal office located at Scotia Plaza, 40 King Street West, Toronto, Ontario,
Canada M5H3Y2.
Except as described in this Offer to Purchase, neither the Purchaser,
Holdings nor Parent (together, the "Corporate Entities") or, to the best
knowledge of the Corporate Entities, any of the persons listed in Schedule I or
any associate or majority-owned subsidiary of the Corporate Entities or any of
the persons so listed, beneficially owns any equity security of the Company, and
none of the Corporate Entities or, to the best knowledge of the Corporate
Entities, any of the other persons referred to above, or any of the
15
<PAGE>
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.
Except as described in this Offer to Purchase, (1) there have not been any
contacts, transactions or negotiations between the Corporate Entities, any of
their respective subsidiaries or, to the best knowledge of the Corporate
Entities, any of the persons listed in Schedule I, on the one hand, and the
Company or any of its directors, officers or affiliates, on the other hand, that
are required to be disclosed pursuant to the rules and regulations of the
Commission and (2) none of the Corporate Entities or, to the best knowledge of
the Corporate Entities, any of the persons listed in Schedule I has any
contract, arrangement, understanding or relationship with any person with
respect to any securities of the Company.
Except as described in this Offer to Purchase, during the last five years,
none of the Corporate Entities or, to the best knowledge of the Corporate
Entities, any of the persons listed in Schedule I (1) has been convicted in a
criminal proceeding (excluding traffic violations and similar misdemeanors) or
(2) was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, Federal or state securities laws or finding any violation
of such laws. The name, business address, present principal occupation or
employment, five-year employment history and citizenship of each of the
directors and executive officers of the Corporate Entities are set forth in
Schedule I.
10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to purchase all
outstanding Shares pursuant to the Offer and to pay fees and expenses related to
the Offer and the Merger is estimated to be approximately $139 million. The
Purchaser plans to obtain all funds needed for the Offer and the Merger through
a capital contribution which will be made by Parent through Holdings to the
Purchaser. Parent plans to use funds that it has available in its cash accounts
and pursuant to borrowings under existing unsecured credit facilities to make
such capital contribution.
11. CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER
At a luncheon meeting in New York City on June 18, 1997, Lew C. Hutchinson,
President and Chief Executive Officer of the Parent, advised Georg Hahnloser,
Chairman of the Company and Chief Operating Officer of Von Roll, that the Parent
would be interested in exploring the possible purchase of the Company in the
event that a decision were made to sell. Mr. Hutchinson was advised that the
Company intended to retain an investment banker to advise it with respect to
such matters and that the Parent's interest would be kept in mind. On or about
September 9, 1997, following press reports that the Company had retained BT
Wolfensohn as financial adviser and investment banker to evaluate alternatives,
including the sale of the Company, that would permit Company stockholders to
realize the value of their investments, Edward G. Reilly, Vice President and
Chief Financial Officer of Parent, telephoned Alexander Prelat, Interim Chief
Financial Officer of the Company, and advised him of Parent's continued interest
in exploring the possible purchase of the Company. Mr. Prelat referred Mr.
Reilly to Richard Bushnell, Managing Director of BT Wolfensohn, who generally
explained to Mr. Reilly the process that the Company and BT Wolfensohn, as the
Company's financial adviser, intended to follow in seeking a purchaser for the
Company. On September 9, 1997, Mr. Bushnell telefaxed to Lew Hutchinson,
Parent's President and Chief Executive Officer, an executive summary describing
the Company and a form of confidentiality letter, which Parent executed and
returned.
On or about September 22, 1997 Parent received from BT Wolfensohn an
information memorandum on the Company, together with a letter outlining the
process to be utilized by the Company in seeking a buyer. Thereafter, there were
various telephone conversations between executives of Parent and individuals at
BT Wolfensohn concerning the contents of the information memorandum and the sale
process. On
16
<PAGE>
October 10, 1997, in accordance with procedures established by BT Wolfensohn,
Parent sent a letter to BT Wolfensohn, expressing interest in pursuing the
acquisition of the Company at a price of approximately $15 per share, subject to
certain conditions, including a more detailed due diligence investigation of the
Company. Thereafter, Parent was advised by BT Wolfensohn that it was one of a
number of potential purchasers to which additional information would be
provided.
On October 29 and 30, 1997, representatives of Parent and its advisers
visited the Company, attended presentations by Company officials, toured its
facilities, received and reviewed copies of additional financial, legal and
other documents concerning the Company and met with various Company officials to
conduct a further due diligence review of the Company. Following such meetings,
representatives of Parent and its advisers were in virtually daily contact with
representatives of the Company and its advisers, as Parent sought to obtain
additional information and clarifications of information previously provided as
part of Parent's due diligence investigation.
On November 14, 1997, in accordance with the schedule established by BT
Wolfensohn, Parent submitted a letter to BT Wolfensohn containing a proposal to
acquire the Company at a price of $23 per share subject to the negotiation of
definitive agreements, suggested forms of which were submitted with such letter,
which included a merger agreement and separate agreement with the Company's
majority stockholder, Von Roll, for the acquisition of its majority block at $23
per share. On November 17, 1997, Parent was advised by BT Wolfensohn that it had
submitted the most attractive financial proposal for acquisition of the Company
and that the Company and Von Roll were prepared to negotiate definitive
agreements on the financial terms proposed by Parent. Thereafter,
representatives of Parent, the Company and Von Roll and their respective
advisers were in daily contact negotiating the forms of such definitive
agreements, as a result of which the definitive Merger Agreement and Stockholder
Agreement were executed and delivered by the parties shortly after midnight on
the morning of November 21, 1997.
Except for the contacts described above relating to this transaction,
employees of Parent and its subsidiaries and the Company have had various
contacts from time to time in the ordinary course of business. During 1997, one
of Parent's subsidiaries purchased steel billets from the Company at an
aggregate purchase price of approximately $1.7 million.
12. PURPOSE OF THE OFFER; THE MERGER AGREEMENT; STOCKHOLDER AGREEMENT
PURPOSE. The purpose of the Offer is to enable Parent to acquire control of
and the entire equity interest in the Company. Following the Offer, the
Purchaser and Parent intend to acquire any remaining equity interest in the
Company not acquired in the Offer by consummating the Merger.
THE MERGER AGREEMENT. The Merger Agreement provides that following the
satisfaction or waiver of the conditions described below under "Conditions to
the Merger," the Purchaser will be merged with the Company, and each then
outstanding Share (other than Shares owned by the Company or by any subsidiary
of the Company, Parent, the Purchaser or any other subsidiary of Parent or by
stockholders, if any, who are entitled to and who properly exercise dissenters'
rights under Delaware law), will be converted into the right to receive an
amount in cash equal to the price per Share paid pursuant to the Offer.
In addition, under the Merger Agreement, the directors of the Purchaser
shall be the directors of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the officers of the
Surviving Corporation following the Merger.
VOTE REQUIRED TO APPROVE MERGER. The DGCL requires, among other things,
that the adoption of any plan of merger or consolidation of the Company must be
approved by the Board of Directors of the Company and, if the "short form"
merger procedure described below is not available, by the holders of a majority
of the Company's outstanding Shares. The Board of Directors of the Company has
approved the Offer, the Merger and the Merger Agreement; consequently, the only
additional action of the Company
17
<PAGE>
that may be necessary to effect the Merger is approval by such stockholders if
the "short-form" merger procedure described below is not available. Under the
DGCL, the affirmative vote of holders of a majority of the outstanding Shares
(including any Shares owned by the Purchaser), is generally required to approve
the Merger. If the Purchaser acquires, through the Offer or otherwise, voting
power with respect to at least a majority of the outstanding Shares (which would
be the case if the Minimum Condition were satisfied and the Purchaser were to
accept for payment Shares tendered pursuant to the Offer), it would have
sufficient voting power to effect the Merger without the vote of any other
stockholder of the Company. However, the DGCL also provides that if a parent
company owns at least 90% of each class of stock of a subsidiary, the parent
company can effect a short-form merger with that subsidiary without the action
of the other stockholders of the subsidiary. Accordingly, if, as a result of the
Offer or otherwise, the Purchaser acquires or controls the voting power of at
least 90% of the outstanding Shares, the Purchaser could (and, under the Merger
Agreement, is required to) effect the Merger using the "short-form" merger
procedures without prior notice to, or any action by, any other stockholder of
the Company.
CONDITIONS TO THE MERGER. The Merger Agreement provides that the Merger is
subject to the satisfaction of certain conditions, including the following: (1)
if required by applicable law, the Merger Agreement having been approved and
adopted by the affirmative vote of holders of a majority of the outstanding
Shares, (2) no statute, rule, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other Federal, state or local government
or any court, administrative agency or commission or other governmental
authority or agency, domestic or foreign (a "Governmental Entity"), or other
legal restraint or prohibition preventing the consummation of the Merger being
in effect; provided, however, that each of the parties shall have used
reasonable efforts to prevent the entry of any such injunction or other order
and to appeal as promptly as possible any injunction or other order that may be
entered and (3) the Purchaser shall have previously accepted for payment and
paid for the Shares pursuant to the Offer.
TERMINATION OF THE MERGER AGREEMENT. The Merger Agreement may be terminated
at any time prior to the effective time of the Merger (the "Effective Time"),
whether before or after approval by the stockholders of the Company (provided,
however, that if Shares are purchased pursuant to the Offer, neither Parent nor
Purchaser may in any event terminate the Merger Agreement), (1) by mutual
written consent of Parent and the Company, (2) by either Parent or the Company
(a) if the Purchaser has not accepted for payment any Shares pursuant to the
Offer prior to May 5, 1998, provided, however, that the right to terminate the
Merger Agreement pursuant to this sentence will not be available to (i) Parent,
if Purchaser has breached its obligations under the Merger Agreement or (ii) any
party whose failure to perform any of its obligations under the Merger Agreement
results in the failure of any such condition or if the failure of such condition
results from facts or circumstances that constitute a willful breach of a
representation or warranty under the Merger Agreement by such party, or (b) if
any Governmental Entity shall have issued an order, decree or ruling or taken
any other action permanently enjoining, restraining or otherwise prohibiting the
acceptance for payment of, or payment for, Shares pursuant to the Offer or the
Merger and such order, decree or ruling or other action has become final and
nonappealable, (3) by Parent or the Purchaser prior to the purchase of Shares
pursuant to the Offer in the event of a breach or failure to perform by the
Company of any representation, warranty, covenant or other agreement contained
in the Merger Agreement which (i) would give rise to the failure of a condition
set forth in paragraph (e) or (f) under "Certain Conditions of the Offer" and
(ii) cannot be or has not been cured within 30 days after the giving of written
notice to the Company, (4) by Parent or the Purchaser if either Parent or the
Purchaser is entitled to terminate the Offer as a result of the occurrence of
any event set forth in paragraph (d) under "Certain Conditions of the Offer" (5)
by the Company in accordance with the terms of the Merger Agreement described
below in "Takeover Proposals," provided that it has complied with all provisions
thereof, including the notice provisions therein, and that it complies with
applicable requirements relating to the payment (including the timing of any
payment) of the Termination Fee (as defined below) as provided in the terms of
the Merger Agreement described below in "Fees and Expenses" (it being understood
that as provided in the terms of the Merger Agreement described below in the
second
18
<PAGE>
paragraph of "Takeover Proposals" the Company will be required to terminate the
Merger Agreement) or (6) by the Company in the event of a material breach or
failure to perform in any material respect by Parent or the Purchaser of any
representation, warranty, covenant or other agreement contained in the Merger
Agreement which cannot be or has not been cured within 30 days after the giving
of written notice to Parent and the Purchaser.
TAKEOVER PROPOSALS. The Merger Agreement provides that the Company will
not, nor will it permit any of it subsidiaries to, nor will it authorize or
permit any of its officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative or agent
retained by it or any subsidiary to, directly or indirectly, (1) solicit,
initiate or knowingly encourage the submission of any Takeover Proposal (as
defined below) or (2) participate in any discussions or negotiations regarding,
or furnish to any person any nonpublic information with respect to, or take any
other action designed or reasonably likely to facilitate any inquiries or the
making of any proposal that constitutes any Takeover Proposal; provided,
however, that if, at any time prior to the acceptance for payment of Shares
pursuant to the Offer, the Board of Directors of the Company determines in good
faith, after consultation with outside counsel, that it is reasonably advisable
to do so in order to comply with its fiduciary duties to the Company's
stockholders under applicable law, the Company may, in response to a Takeover
Proposal which was not solicited subsequent to the date of the Merger Agreement,
and subject to compliance with the notification provisions discussed below, (a)
furnish information with respect to the Company to any person pursuant to a
customary confidentiality agreement and (b) participate in discussions and
negotiations regarding such Takeover Proposal. The Merger Agreement provides
that any violation of the restrictions set forth in the preceding sentence by
any director, officer or employee of the Company or any of its subsidiaries or
any investment banker, financial advisor, attorney, accountant or other
representative or agent of the Company or any of its subsidiaries will be deemed
to be a breach of the Company's obligations under the Merger Agreement. The
Merger Agreement defines "Takeover Proposal" as any inquiry, proposal or offer
from any person relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of the Company and its subsidiaries, taken as a
whole (other than the purchase of the Company's products in the ordinary course
of business), or more than a 40% interest in the total voting securities of the
Company or any of its subsidiaries or any tender offer or exchange offer that if
consummated would result in any person beneficially owning 40% or more of any
class of equity securities of the Company or any of its subsidiaries or any
merger, consolidation, business combination, sale of substantially all the
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries, other than the transactions
contemplated by the Merger Agreement.
The Merger Agreement provides further that unless the Board of Directors of
the Company has terminated the Merger Agreement as described above, neither the
Board of Directors of the Company nor any committee thereof may (1) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to Parent, the
approval or recommendation by such Board of Directors or such committee of the
Offer, the Merger or the Merger Agreement, (2) approve or recommend, or propose
publicly to approve or recommend, any Takeover Proposal or (3) cause the Company
to enter into any letter of intent, agreement in principle, acquisition
agreement or other similar agreement (each, an "Acquisition Agreement") related
to any Takeover Proposal. Notwithstanding the foregoing, in the event that prior
to the acceptance for payment of Shares pursuant to the Offer the Board of
Directors of the Company determines in good faith, after consultation with
outside counsel, that it is reasonably advisable to do so in order to comply
with its fiduciary duties to the Company's stockholders under applicable law,
the Board of Directors of the Company may, in response to an unsolicited
Superior Proposal (as defined below) (subject to the following proviso), (a)
withdraw or modify its approval or recommendation of the Offer, the Merger or
the Merger Agreement or (b) approve or recommend any such Superior Proposal if
concurrently with such approval or recommendation the Company terminates the
Merger Agreement and enters into an Acquisition Agreement with respect to a
Superior Proposal; provided, that in the case of this clause (b), only at a time
that is after the later of (i) the third business day following Parent's receipt
of written notice
19
<PAGE>
advising Parent that the Board of Directors of the Company has received a
Superior Proposal, specifying the material terms of such Superior Proposal and
identifying the person making such Superior Proposal and (ii) in the event of an
amendment to the price or any material term of a Superior Proposal, one business
day following Parent's receipt of written notice containing the material terms
of such amendment, including any change in price (it being understood that each
further amendment to the price or any material terms of a Superior Proposal will
necessitate an additional written notice to Parent and an additional one
business day period prior to which the Company can take the actions set forth in
clause (b) above). The Merger Agreement defines a "Superior Proposal" as any
bona fide Takeover Proposal made by a third party (1) that is on terms which the
Board of Directors of the Company determines in its good faith judgment (based
on consultation with the Company's financial advisor) to be more favorable to
the Company's stockholders than the Offer and the Merger and (2) for which
financing, to the extent required, is then committed or which, in the good faith
judgment of the Board of Directors of the Company, is capable of being obtained
by such third party.
In addition to the obligations of the Company set forth in the preceding
paragraphs, the Merger Agreement provides that the Company must promptly advise
Parent orally and in writing of any request for nonpublic information (except in
the ordinary course of business and not in connection with a possible Takeover
Proposal) or of any Takeover Proposal known to it, the material terms and
conditions of such request or Takeover Proposal and the identity of the person
making such request or Takeover Proposal. The Company must promptly inform
Parent of any material change in the details (including amendments or proposed
amendments) of any such request or Takeover Proposal.
The Merger Agreement provides that nothing contained therein will prohibit
the Company from taking and disclosing to its stockholders a position
contemplated by Rule 14d-9 or Rule 14e-2 (a) promulgated under the Exchange Act
or from making any disclosure to the Company's stockholders if, in the good
faith judgment of the Board of Directors of the Company, after consultation with
outside counsel, failure to so disclose would be inconsistent with applicable
law; provided, however, that neither the Company nor its Board of Directors nor
any committee thereof may, except as permitted by the Merger Agreement, withdraw
or modify, or propose to withdraw or modify, its position with respect to the
Offer, the Merger or the Merger Agreement or approve or recommend, or propose to
approve or recommend, a Takeover Proposal.
FEES AND EXPENSES. The Merger Agreement provides that except as provided
below, all fees and expenses incurred in connection with the Offer, the Merger,
the Merger Agreement and the transactions contemplated by the Merger Agreement
will be paid by the party incurring such fees or expenses, whether or not the
Offer or the Merger is consummated. The Merger Agreement further provides that
the Company will pay, or cause to be paid, in same day funds to Parent the
amount of $5 million (the "Termination Fee") under the circumstances and at the
times set forth as follows: (1) if the Company terminates the Merger Agreement
in accordance with the provisions described above in clause 5 of "Termination of
the Merger Agreement," the Company must pay 50% of the Termination Fee
simultaneously with such termination, and 50% of the Termination Fee upon
consummation of the transactions contemplated by the Superior Proposal giving
rise to the Company's right to terminate the Merger Agreement in accordance with
the provisions described above in clause 5 of "Termination of the Merger
Agreement," or upon the earlier consummation of another Company Acquisition (as
defined below); provided that such other Company Acquisition is consummated
within twelve months following termination of the Merger Agreement, (2) if
Parent or the Purchaser terminates the Merger Agreement in accordance with the
provisions described above in clause 4 of "Termination of the Merger Agreement"
and in addition, if within twelve months after such termination the Company
enters into an Acquisition Agreement providing for a Company Acquisition or the
Company recommends to its stockholders that they accept a Company Acquisition of
the type referred to in clause 3 of the definition of Company Acquisition
described below, the Company must pay (a) 50% of the Termination Fee
simultaneously with the entering into of such Acquisition Agreement or making of
such recommendation and (b) 50% of the
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Termination Fee upon consummation of the Company Acquisition which was the
subject of such Acquisition Agreement or recommendation, or upon the
consummation, prior to the expiration of such twelve month period, of any other
Company Acquisition (it being understood that if any Company Acquisition is
consummated within such twelve month period and the Company shall not have paid
any amount pursuant to clause (a) above, that upon consummation of such Company
Acquisition the Company must pay 100% of the Termination Fee) and (3) if, at the
time of any termination of the Merger Agreement in accordance with the
provisions described above in clause 2(a) of "Termination of the Merger
Agreement" (as a result of a failure to obtain the Minimum Condition) or in
accordance with the provisions described above in clause 3 of "Termination of
the Merger Agreement," any person shall have publicly announced a proposal to
effect a Company Acquisition and if, within twelve months after such
termination, the Company shall enter into an Acquisition Agreement providing for
a Company Acquisition or the Company shall recommend to its stockholders that
they accept a Company Acquisition of the type referred to in clause 3 of the
definition of Company Acquisition described below, the in clause 3 of the
definition of Company Acquisition described below, the Company must pay (a) 50%
of the Termination Fee simultaneously with the entering into of such Acquisition
Agreement or making of such recommendation and (b) 50% of the Termination Fee
upon consummation of the Company Acquisition which was the subject of such
Acquisition Agreement or recommendation, or upon the consummation, prior to the
expiration of such twelve month period, of any other Company Acquisition (it
being understood that if any Company Acquisition is consummated within such
twelve month period and the Company shall not have paid any amount pursuant to
clause (a) above, that upon consummation of such Company Acquisition the Company
must pay 100% of the Termination Fee). The Merger Agreement defines a "Company"
as any of the following transactions: (1) a merger, consolidation, business
combination or a recapitalization pursuant to which the stockholders of the
Company immediately preceding such transaction hold less than 60% of the equity
interests in the surviving or resulting entity of such transaction (other than
the transactions contemplated by the Merger Agreement); (2) a sale by the
Company of assets (excluding the sale of the Company's products in the ordinary
course of business) representing in excess of 40% of the fair market value of
the Company immediately prior to such sale or the issuance by the Company to any
person or group of shares representing in excess of 40% of the then outstanding
shares of capital stock of the Company (other than in connection with an
underwritten public offering); or (3) the acquisition by any person or group, by
way of a tender offer, exchange offer, or by way of open market purchases, of
beneficial ownership of 40% or more of the then outstanding shares of capital
stock of the Company.
CONDUCT OF BUSINESS BY THE COMPANY. The Merger Agreement provides that
until the earlier of termination of the Merger Agreement and consummation of the
Offer, the Company will, and will cause its subsidiaries to, carry on their
respective businesses in the ordinary course consistent with the manner
conducted prior to the execution of the Merger Agreement and, to the extent
consistent therewith, use commercially reasonable efforts to preserve intact
their current business organization, maintain its rights and franchises, use its
best efforts to retain the services of their current officers and employees and
preserve their relationships with customers and suppliers, and others having
business dealings with them, maintain and keep its properties and assets in as
good repair and condition as at present, ordinary wear and tear expected and
maintain inventories in quantities consistent with its customary business
practice and keep in force and effect insurance and bonds comparable in amount
and scope of coverage to that maintained. Without limiting the generality of the
foregoing, during the period from the date of the Merger Agreement until the
earlier termination of the Merger Agreement and consummation of the Offer,
except as otherwise contemplated by the Merger Agreement (or for certain matters
disclosed in connection therewith), the Company will not, and will not permit
any of its subsidiaries to, without Parent's prior written consent:
(a) (1) increase the compensation payable to or to become payable to any
director, officer or employee (other than increases to employees, other than
officers, made in the ordinary course of business and consistent with past
practice); (ii) grant any severance or termination of pay (other than pursuant
to the normal severance policy of the Company as in effect on the date of the
Merger Agreement) to, or enter
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into any employment or severance agreement with, any director, officer or
employee; (iii) establish, adopt, enter into or amend any employee benefit plan
or arrangement except as may be required by applicable law; or (iv) lend or
contribute any funds to any director, officer, employee, affiliate or associate
of the Company;
(b) declare or pay any dividend on, or make any other distribution in
respect of, outstanding shares of capital stock;
(c) (i) redeem, purchase or otherwise acquire any shares of its or any
securities or obligations convertible into or exchangeable for any shares of its
capital stock, or any options, warrants or conversion or other rights to acquire
any shares of its capital stock or any such securities or obligations; (ii)
effect any reorganization or recapitalization; or (iii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for, shares of its capital stock;
(d) (i) issue, deliver, award, grant or sell, or authorize or propose the
issuance, delivery, award, grant or sale (including the grant of any security
interest, liens, claims, pledges, limitations in voting rights, charges or other
encumbrances) of, any shares of any class of its capital stock (including shares
held in treasury), any securities convertible into or exercisable or
exchangeable for any such shares, or any rights, warrants or options to acquire,
any such shares, other than the issuance of shares pursuant to the exercise of
Stock Options granted prior to the date hereof; or (ii) amend or otherwise
modify the terms of any such rights, warrants or options the effect of which
shall be to make such terms more favorable to the holders thereof; (provided
however, the Company may take action to accelerate the vesting of outstanding
stock options);
(e) (i) acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof, or (ii) otherwise acquire or agree to
acquire any assets of any other person (other than the purchase of assets from
suppliers or vendors in the ordinary course of business and consistent with past
practice);
(f) sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose
of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise
dispose of, any of its assets or any assets of Subsidiary, except for
dispositions of inventories and of assets in the ordinary course of business and
consistent with past practice;
(g) release any third party from its obligations under any existing
standstill relating to a Competing Transaction or otherwise under
confidentiality agreements;
(h) propose or adopt any amendments to its Certificates of Incorporation or
By-Laws;
(i) (A) change any of its methods of accounting in effect at August 31,
1997, or (B) make or rescind any express or deemed election relating to taxes,
settle or compromise any claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to taxes, or change
any of its methods of reporting income or deductions for federal income tax
purposes from those employed in the preparation of the federal income tax
returns for those employed in the preparation of the federal income tax returns
for the taxable year ending November 30, 1996, except, in the case of clause (A)
or clause (B), as may be required by law or changes in GAAP;
(j) incur any obligation for borrowed money or purchase money indebtedness,
whether or not evidenced by a note, bond, debenture or similar instrument (other
than Company Debt, as defined in the Merger Agreement, incurred in the ordinary
course of business (including previously budgeted capital expenditures), which
at November 30, 1997 (but not thereafter) shall not exceed $32 million exclusive
of any amount required to fund a settlement of the certain litigation, if
settled prior to November 30, 1997);
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(k) enter into any arrangement, agreement or contract with any third party
(other than customers or suppliers in the ordinary course of business) which
provides for an exclusive arrangement with that third party or is more
restrictive on the Company or less advantageous to the Company than
arrangements, agreements or contracts existing on the date hereof;
(l) agree in writing or otherwise to do any of the foregoing.
STOCK OPTIONS. The Merger Agreement provides that the Company shall use its
best efforts to obtain the agreement of each holder of an employee stock option
granted under the Company's Stock Plans (whether or not exercisable) outstanding
as of the date of the Merger Agreement, for the cancellation and settlement of
such option as of the Effective Time in consideration of the payment by Parent
or Sub, as the case may be, to such option holder of a dollar amount for each
share of Company Common Stock subject to such option equal to the Merger
Consideration payable in respect of a share of Company Common Stock less the
applicable exercise price per share of such option due and payable as of the
Effective Time. All such payments to optionees shall be subject to applicable
withholding taxes. At or immediately prior to the Closing, Parent or Sub, as the
case may be, shall deposit or cause to be deposited with the Paying Agent in
trust for the benefit of such option holders the cash necessary to allow the
Paying Agent to pay the amounts due under the Merger Agreement as of the
Effective Time.
INDEMNIFICATION. From and after the consummation of the Offer, the
Surviving Corporation will, and the Parent will use its best efforts to cause
the Surviving Corporation to, fulfill and honor in all respects the obligations
of the Company pursuant to (1) each indemnification agreement in effect at such
time between the Company and each person who is or was a director or officer of
the Company at or prior to the Effective Time and (2) any indemnification
provisions under the Company's Certificate of Incorporation or By-laws as each
was in effect on the date of the Merger Agreement (the persons to be indemnified
pursuant to the agreements or provisions referred to in clauses (1) and (2) of
this sentence are referred to as, collectively, the "Indemnified Parties").
Pursuant to the Merger Agreement, the Certificate of Incorporation and By-laws
of the Surviving Corporation will contain the provisions with respect to
indemnification and exculpation from liability provisions with respect to
indemnification and exculpation from liability set forth in the Company's
Certificate of Incorporation and By-laws on the date of the Merger Agreement,
which provisions will not be amended, repealed or otherwise modified for a
period of six years after the Effective Time in any manner that would adversely
affect the rights thereunder of any Indemnified Party. The Merger Agreement also
provides that, from and after the date of the Merger Agreement, the Company may
enter into indemnification agreements, or amend existing indemnification
agreements, with current directors and officers of the Company providing for
customary provisions under Delaware law.
REASONABLE EFFORTS. Upon and subject to the terms and subject to the
conditions set forth in the Merger Agreement, Parent, the Purchaser and the
Company have each agreed to use all reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with each other in doing, all things necessary, proper or advisable under
applicable law or otherwise to consummate and make effective, in the most
expeditious manner practicable, the Offer, the Merger and the other transactions
contemplated by the Merger Agreement, including using reasonable efforts to take
the following actions: (1) take, or cause to be taken, all appropriate action,
and do, or cause to be done, all things necessary, proper or advisable under
applicable law or otherwise to consummate and make effective the transactions
contemplated by the Merger Agreement, (ii) obtain from any Governmental Entities
or third parties any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained or made by Parent or the
Company or any of their Subsidiaries in connection with the authorization,
execution and delivery of the Merger Agreement and the consummation of the
transactions contemplated herein, including, the Merger, and (iii) make all
necessary filings, and thereafter make any other required submissions, with
respect to the Merger Agreement and the Merger, required under (A) the Exchange
Act and the rules and regulations thereunder, and any other applicable federal
or state securities laws, (B) the HSR Act and (C) any other applicable law.
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REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
customary representations and warranties.
The foregoing summary of the Merger Agreement is qualified in its entirety
by reference to the Merger Agreement, a copy of which is filed as Exhibit (c) to
Purchaser's Tender Offer Statement on Schedule 14D-1 filed with the Commission
on the date hereof (the "Schedule 14D-1"). The Merger Agreement should be read
in its entirety for a more complete description of the matters summarized above.
STOCKHOLDER AGREEMENT
Simultaneously with the execution and delivery of the Merger Agreement,
Parent and Von Roll entered into a Stockholder Agreement dated as of November
21, 1997 (the "Stockholder Agreement") pursuant to which Von Roll agreed,
subject to the terms and conditions of such Stockholder Agreement, to tender its
3,561,500 Shares (the "Von Roll Shares") pursuant to the Offer and, in the event
that Von Roll Shares are not purchased pursuant to the Offer, to sell the Von
Roll Shares to Parent.
TENDER OF SHARES. Pursuant to the Stockholder Agreement, Von Roll has
agreed to validly tender, or cause to be validly tendered) in accordance with
the terms of the Offer, and not to withdraw, all of the Von Roll Shares (and any
shares acquired by Von Roll in any capacity after the date of the Stockholder
Agreement by means of purchase, dividend, distribution or in any other way).
SALE AND PURCHASE. The Stockholder Agreement also provides that in the
event the Von Roll shares are not purchased by the Parent pursuant to the Offer
because the Offer is terminated for any reason other than a failure of an Offer
Condition other than condition (d) thereof as described in Section 14, then Von
Roll shall sell its Shares to the Parent and the Parent has agreed to purchase
the Von Roll Shares at a purchase price of $23.00 per share (the "Purchase
Price"). In the event the Von Roll Shares are purchased as described in the
preceding sentence, Parent has agreed at the time of the purchase and sale to
(1) purchase from Von Roll the outstanding subordinated loans to the Company
held by Von Roll made pursuant to a Credit Agreement dated June 6, 1996 between
Company and Von Roll, at the at the face amount thereof, plus all interest
accrued but unpaid to the date of such purchase, (ii) provide or cause to be
provided to the Company on a timely basis substitute working capital financing
and financing sufficient to repay in full the Company's obligations to PNC Bank
under that certain Loan and Security Agreement dated June 6, 1996, if required
by said lender and (iii) provide, or cause the Company to provide a substitute
guarantee or otherwise act with Von Roll to effectuate the prompt release of Von
Roll from its guarantee of certain contractual obligations of the Company.
If the Von Roll shares are purchased under the Stockholder Agreement as
discussed above, the closing of the sale and conveyance of the Von Roll Shares
and the subordinated obligations shall take place on the third business day
allowing satisfaction or waiver of the conditions set forth in the Stockholder
Agreement or such other time as the parties thereto may agree (the "Closing
Date").
Under the Stockholder Agreement, Von Roll's obligation to sell its Shares
and the subordinated obligations on the Closing Date is subject to the
satisfaction of the following conditions, any or all of which to the extent
permitted by applicable law, may be waived in writing by Stockholder; (a) all
representations and warranties of Parent in the Stockholder Agreement shall be
true, correct and complete in all material respects on and as of the Closing
Date; (b) no injunction or order prohibiting the consummation of the
transactions contemplated by the Stockholder Agreement shall be outstanding; (c)
all waiting periods under the HSR shall have expired or been terminated; (d) a
satisfactory remediation agreement shall have been entered into with the NJDEP,
or the requirements of ISRA shall have otherwise been satisfied; and (e) Parent
shall have performed and complied with all obligations under the Stockholder
Agreement that are to be performed or complied with by Parent prior to or on the
Closing Date.
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In addition, the Parent's obligation to purchase the Von Roll Shares on the
Closing Date is subject to the satisfaction of the following conditions, any or
all of which, to the extent permitted by applicable law, may be waived in
writing by the Parent; (a) all representations and warranties of Von Roll in the
Stockholder Agreement shall be true, correct and complete in all material
respects on and as of the Closing Date; (b) Von Roll shall have performed and
complied with all obligations under the Stockholder Agreement that are to be
performed or complied with by Stockholder prior to or on the Closing Date; (c)
all waiting periods under the HSR shall have expired or been terminated; (d) a
satisfactory remediation agreement shall have been entered into with the NJDEP,
or the requirements of ISRA shall have otherwise been satisfied; (e) Von Roll
and the Company shall have terminated without further payment by, or liability
of the Company for, any termination, severance or similar fees, (i) the
Management and Technical Services Agreement between them and (ii) the employment
by the Company of any Von Roll employees on an interim basis (including the
Chief Financial Officer); and (f) the closing condition of the Merger Agreement
with respect to injunctions and restraints shall have been satisfied or, to the
extent permitted by applicable law, waived.
The foregoing summary of the Stockholder Agreement is qualified in its
entirety by reference to the Stockholder Agreement, a copy of which is filed as
Exhibit (c)(2) to Purchaser's Tender Offer Statement on Schedule 14D-1 filed
with the Commission on the date hereof. The Stockholder Agreement should be read
in its entirety for a more complete description of the matters summarized above.
APPRAISAL RIGHTS. Holders of Shares do not have dissenters' rights as a
result of the Offer. However, if the Merger is consummated, holders of Shares
will have certain rights pursuant to the provisions of Section 262 of the DGCL
to dissent and demand appraisal of, and to receive payment in cash of the fair
value of, their Shares. If the statutory procedures were complied with, such
rights could lead to a judicial determination of the fair value required to be
paid in cash to such dissenting holders for their Shares. Any such judicial
determination of the fair value of Shares could be based upon considerations
other than or in addition to the Offer Price or the market value of the Shares,
including asset values and the investment value of the Shares. The value so
determined could be more or less than the Offer Price or the Merger
Consideration.
If any holder of Shares who demands appraisal under Section 262 of the DGCL
fails to perfect, or effectively withdraws or loses his right to appraisal, as
provided in the DGCL, the Shares of such stockholder will be converted into the
Merger Consideration in accordance with the Merger Agreement. A stockholder may
withdraw his demand for appraisal by delivery to Parent of a written withdrawal
of his demand for appraisal and acceptance of the Merger.
The foregoing discussion is not a complete statement of law pertaining to
appraisal rights under the DGCL and is qualified in its entirety by the full
text of Section 262 of the DGCL.
FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTION 262 OF THE DGCL FOR
PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE LOSS OF SUCH RIGHTS.
GOING PRIVATE TRANSACTIONS. The Merger would have to comply with any
applicable Federal law operative at the time of its consummation. Rule 13e-3
under the Exchange Act is applicable to certain "going private" transactions.
The Purchaser does not believe that Rule 13e-3 will be applicable to the Merger
unless the Merger is consummated more than one year after the termination of the
Offer. If applicable, Rule 13e-3 would require, among other things, that certain
financial information concerning the Company and certain information relating to
the fairness of the Merger and the consideration offered to minority
stockholders be filed with the Commission and disclosed to minority stockholders
prior to consummation of the Merger.
OTHER MATTERS. Except as otherwise described in this Offer to Purchase, the
Purchaser and Parent have no current plans or proposals that would relate to, or
result in, any extraordinary corporate transaction involving the Company or any
of its subsidiaries, such as a merger, reorganization or
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liquidation involving the Company or any of its subsidiaries, a sale or transfer
of a material amount of assets of the Company or any of its subsidiaries, any
change in the present Board of Directors of the Company or management of the
Company, any material change in the Company's capitalization or dividend policy
or any other material change in the Company's business, corporate structure or
personnel.
13. DIVIDENDS AND DISTRIBUTIONS
Pursuant to the terms of the Merger Agreement, the Company is prohibited
from taking any of the actions described in the two succeeding paragraphs, and
nothing herein shall constitute a waiver by the Purchaser or Parent of any of
its rights under the Merger Agreement or a limitation of remedies available to
the Purchaser or Parent for any breach of the Merger Agreement, including
termination thereof.
If, on or after the date of the Merger Agreement, the Company should (1)
split, combine or otherwise change the Shares or its capitalization, (2) acquire
currently outstanding Shares or otherwise cause a reduction in the number of
outstanding Shares or (3) issue or sell additional Shares, shares of any other
class of capital stock, other voting securities or any securities convertible
into, or rights, warrants or options, to acquire any of the foregoing, other
than Shares issued pursuant to the exercise of Stock Options outstanding as of
the date of the Merger Agreement, then, subject to the provisions of Section 14
below, 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 of securities offered to be purchased.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or the Merger Agreement, 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 the Exchange Act (relating to Purchaser's obligation to pay for or return
tendered Shares after the termination or withdrawal of the Offer), to pay for
any Shares tendered pursuant to the Offer unless (1) the Minimum Condition shall
have been satisfied, (2) any waiting period under the HSR Act applicable to the
purchase of Shares pursuant to the Offer shall have expired or been terminated,
and (3) the requirements of ISRA having been satisfied. Furthermore, Purchaser
will not be required to accept for payment or, subject as aforesaid, to pay for
any Shares not theretofore accepted for payment or paid for, and may, in
accordance with the provisions of the Merger Agreement described in the
subsection entitled "Termination of the Merger Agreement" in Item 12 above,
terminate the Merger Agreement or amend the Offer with the consent of the
Company and Von Roll, if, upon the scheduled expiration date of the Offer and
before the acceptance of such Shares for payment or the payment therefor, any of
the following conditions exists and is continuing and does not result
principally from the breach by Parent or the Purchaser of any of their
obligations under the Merger Agreement:
(a) there shall be instituted or pending by any Governmental Entity any
suit, action or proceeding (i) challenging the acquisition by Parent or the
Purchaser of any Shares under the Offer, seeking to restrain or prohibit the
making or consummation of the Offer or the Merger, (ii) seeking to prohibit or
materially limit the ownership or operation by the Company, Parent or any of
Parent's subsidiaries of a material portion of the business or assets of the
Company or Parent and its subsidiaries, taken as a whole, or to compel the
Company or Parent to dispose of or hold separate any material portion of the
business or assets of the Company or Parent and its subsidiaries, taken as a
whole, in each case as a result of the Offer or the Merger or (iii) seeking to
impose material limitations on the ability of Parent or the Purchaser to acquire
or hold, or exercise full rights of ownership of, any Shares to be accepted for
payment pursuant to the Offer including, without limitation, the right to vote
such Shares on all matters properly presented to the stockholders of the Company
or (iv) seeking to prohibit Parent or any of its subsidiaries from effectively
controlling in any material respect any material portion of the business or
operations of the Company;
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(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to the
Offer or the Merger, by any Governmental Entity or court, other than the
application to the Offer or the Merger of IRSA and any applicable waiting
periods under the HSR Act, that would result in any of the consequences referred
to in clauses (i) through (iv) of paragraph (a) above;
(c) there shall have occurred any material adverse change with respect to
the Company since the date of the Merger Agreement;
(d) the Board of Directors of the Company or any committee thereof shall
have withdrawn or modified in a manner adverse to Parent or the Purchaser its
approval or recommendation of the Offer or the Merger or its adoption of the
Merger Agreement, or approved or recommended any Takeover Proposal;
(e) any of the representations and warranties of the Company set forth in
the Merger Agreement that are qualified as to materiality shall not be true and
correct or any such representations and warranties that are not so qualified
shall not be true and correct in any material respect, in each case at the date
of the Merger Agreement and at the scheduled or extended expiration of the
Offer;
(f) the Company shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or material covenant of the Company to be performed or complied with
by it under the Merger Agreement, which failure to perform or comply has not
been cured within 30 business days after the giving of written notice to the
Company; or
(g) Parent and Purchaser shall not have received a certificate of the
President or Chief Financial Officer of the Company dated the expiration date of
the Offer (i) that the representations and warranties of the Company set forth
in this Agreement that are qualified as to materiality are true and correct as
and at such date, (ii) that the representations and warranties that are not so
qualified are true and correct in any material respect as and at such date, and
that (iii) the Company has performed in all material respects any material
obligation and complied in all material respects with any material agreement or
material covenant of the Company to be performed or complied with by it; or
(h) the Merger Agreement shall have been terminated in accordance with its
terms;
which, in the good faith judgment of Parent or the Purchaser, in its sole
discretion, make it inadvisable to proceed with such acceptance of Shares for
payment or the payment therefor.
The Merger Agreement provides that the condition set forth in clause (e)
above will be deemed not fulfilled only if the respects in which the
representations and warranties made by the Company in the Merger Agreement
(without giving effect to any "materiality" limitations or references to
"material adverse effect" set forth therein) are inaccurate would have a
material adverse effect on the Company and if the condition set forth in clause
(f) is not fulfilled, Purchaser shall not be obligated to purchase and pay for
any Shares so long as such condition remains unfulfilled, but Purchaser may not
terminate the Offer due solely to such failure until 30 days after it gives
written notice to the Company of such nonfulfillment and such nonfulfillment is
not cured by the end of such 30-day period.
The Merger Agreement provides that the foregoing conditions are for the sole
benefit of Parent and the Purchaser and (except for the Minimum Condition) may,
subject to the terms of the Merger Agreement, be waived by Parent and the
Purchaser in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or 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 time
and from time to time.
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15. CERTAIN LEGAL MATTERS
Based on a review of publicly available filings made by the Company with the
Commission and other publicly available information concerning the Company,
neither the Purchaser nor Parent is aware of any license or regulatory permit
that appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the Purchaser's
acquisition of Shares as contemplated herein or of any approval or other action,
except as otherwise described in this Section 15, by any Governmental Entity
that would be required for the acquisition or ownership of Shares by the
Purchaser as contemplated herein. Should any such approval or other action be
required, the Purchaser and Parent currently contemplate that such approval or
other action will be sought, except as described below under "State Takeover
Laws." While, except as otherwise expressly described in this Section 15, the
Purchaser does not presently intend to delay the acceptance for payment of or
payment for Shares tendered pursuant to the Offer pending the outcome of any
such matter, there can be no assurance that any such approval or other action,
if needed, would be obtained or would be obtained without substantial conditions
or that failure to obtain any such approval or other action might not result in
consequences adverse to the Company's business or that certain parts of the
Company's business might not have to be disposed of if such approvals were not
obtained or such other actions were not taken or in order to obtain any such
approval or other action. If certain types of adverse action are taken with
respect to the matters discussed below, the Purchaser could decline to accept
for payment or pay for any Shares tendered. See Section 14 for certain
conditions to the Offer.
STATE TAKEOVER LAWS. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable to
attempts to acquire securities of corporations that are incorporated or have
assets, stockholders, executive offices or places or business in such states. In
Edgar V. MITE Corp., the Supreme Court of the United States held that the
Illinois Business Takeover Act, which involved state securities laws that made
the takeover of certain corporations more difficult, imposed a substantial
burden on interstate commerce and therefore was unconstitutional. In CTS Corp.
v. Dynamics Corp. of America, however, the Supreme Court of the United States
held that a state may, as a matter of corporate law, and, in particular, those
laws concerning corporate governance, constitutionally disqualify a potential
acquirer from voting on the affairs of a target corporation without prior
approval of the remaining stockholders; provided that such laws were applicable
only under certain conditions.
Section 203 of the DGCL limits the ability of a Delaware corporation to
engage in business combinations with "interested stockholders" (defined
generally as any beneficial owner of 15% or more of the outstanding voting stock
of the corporation) unless, among other things, the corporation's board of
directors has given its prior approval to either the business combination or the
transaction which resulted in the stockholder becoming an "interested
stockholder." The Company's Board of Directors has approved the Merger Agreement
and the Purchaser's acquisition of Shares pursuant to the Offer and, therefore,
Section 203 of the DGCL is inapplicable to the Offer and the Merger.
Based on information supplied by the Company, the Purchaser does not believe
that any state takeover statutes purport to apply to the Offer or the Merger.
Neither the Purchaser nor Parent has currently complied with any state takeover
statute or regulation. The Purchaser reserves the right to challenge the
applicability or validity of any state law purportedly applicable to the Offer
or the Merger and nothing in this Offer to Purchase or any action taken in
connection with the Offer or the Merger is intended as a waiver of such right.
If it is asserted that any state takeover statute is applicable to the Offer or
the Merger and if an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer or the Merger, the Purchaser
might be required to file certain information with, or to receive approvals
from, the relevant state authorities, and the Purchaser might be unable to
accept for payment or pay for Shares tendered pursuant to the Offer, or be
delayed in consummating the Offer or the Merger. In such case, the Purchaser may
not be obliged to accept for payment or pay for any Shares tendered pursuant to
the Offer.
28
<PAGE>
ANTITRUST. Under the provisions of the HSR Act applicable to the Offer, the
purchase of Shares under the Offer may be consummated following the expiration
of a 15-calendar day waiting period following the filing by Parent of a
Notification and Report Form with respect to the Offer, unless Parent receives a
request for additional information or documentary material from the Antitrust
Division or the FTC or unless early termination of the waiting period is
granted. Parent is in the process of preparing such filing. If, within the
initial 15-day waiting 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. In
practice, complying with a request for additional information or material can
take a significant amount of time. In addition, if the Antitrust Division or the
FTC raises substantive issues in connection with a proposed transaction, the
parties frequently engage in negotiations with the relevant governmental agency
concerning possible means of addressing those issues and may agree to delay
consummation of the transaction while such negotiations continue.
The Merger would not require an additional filing under the HSR Act if the
Merger would not require an additional filing under the HSR Act if the Purchaser
owns 50% or more of the outstanding Shares at the time of the Merger or if the
Merger occurs within one year after the HSR Act waiting period applicable to the
Offer expires or is terminated.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed acquisition
of the Company. At any time before or after the Purchaser's purchase of Shares
pursuant to the Offer, the Antitrust Division or FTC could take such action
under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the purchase of Shares pursuant to the
Offer or the consummation of the Merger or seeking the divestiture of Shares
acquired by the Purchaser or the divestiture of substantial assets of Parent or
its subsidiaries, or the Company or its subsidiaries. Private parties may also
bring legal action under the antitrust laws under certain circumstances. There
can be no assurance that a challenge to the Offer on antitrust grounds will not
be made or, if such a challenge is made, of the results thereof.
NEW JERSEY INDUSTRIAL SITE RECOVERY ACT. The Company's facilities, which
are located in the State of New Jersey, constitute "industrial establishments"
as defined in ISRA. Under ISRA, it is a precondition to the transfer of a
controlling interest in any industrial establishment that the NJDEP be given
notice of the proposed transfer and that there be an investigation to identify,
followed by remediation of, any environmental contamination exceeding applicable
statutory and regulatory standards, subject to the review and approval of the
NJDEP. The requirements of ISRA may also be satisfied through a remediation
agreement between the owner of the industrial establishment and the NJDEP
whereby the transfer is permitted to occur prior to investigation and
remediation of environmental contamination based on assurances by the parties to
the NJDEP to complete such investigation and remediation following the transfer.
Under the Merger Agreement, the Company has agreed to comply with the
requirements of ISRA and intends to do so by seeking to enter into a remediation
agreement with the NJDEP providing for remediation to occur after the Effective
Time of the Merger, and the Purchaser has agreed not to unreasonably withhold
its consent to any such remediation agreement. It is a condition to Purchaser's
obligation to purchase and pay for Shares pursuant to the Offer that the
requirements of ISRA shall have been satisfied through such remediation
agreement or otherwise. Although the Purchaser does not anticipate that
compliance with ISRA will delay the purchase of Shares pursuant to the Offer,
there can be no assurance that the requirements of ISRA will be satisfied prior
to the Expiration Date.
16. FEES AND EXPENSES
The Purchaser has retained D.F. King & Co., Inc. to act as the Information
Agent and PNC Bank, National Association, c/o First City Transfer Company, to
serve as the Depositary in connection with the
29
<PAGE>
Offer. The Information Agent and the Depositary each will receive reasonable and
customary compensation for their services, be reimbursed for certain reasonable
out-of-pocket expenses and be indemnified against certain liabilities and
expenses in connection therewith, including certain liabilities under the
Federal securities laws.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent and the
Depositary) in connection with the solicitation of tenders of Shares pursuant to
the Offer. Brokers, dealers, banks and trust companies will be reimbursed by the
Purchaser upon request for customary mailing and handling expenses incurred by
them in forwarding material to their customers.
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. None of the Purchaser or Parent is aware of any jurisdiction in
which the making of the Offer or the tender of Shares in connection therewith
would not be in compliance with the laws of such jurisdiction. To the extent the
Purchaser or Parent becomes aware of any state law that would limit the class of
offerees in the Offer, the Purchaser will amend the Offer and, depending on the
timing of such amendment, if any, will extend the Offer to provide adequate
dissemination of such information to holders of Shares prior to the expiration
of the Offer.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT OR HOLDINGS 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 or Parent has filed with the Commission the Schedule 14D-l
pursuant to Rule 14d-3 under the Exchange Act, furnishing certain additional
information with respect to the Offer. In addition, the Company has filed with
the Commission the Schedule 14D-9 pursuant to Rule 14d-9 under the Exchange Act
setting forth its recommendation with respect to the Offer and the reasons for
such recommendation and furnishing certain additional related information. Such
Schedules and any amendments thereto, including exhibits, should be available
for inspection and copies should be obtainable in the manner set forth in
Sections 8 and 9 (except that they will not be available at the regional offices
of the Commission).
November 28, 1997 CO-STEEL MERGER CORPORATION
30
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT, HOLDINGS AND PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The name, business address,
present principal occupation or employment and five-year employment history of
each of the directors and executive officers of Parent are set forth below.
Unless otherwise indicated, the business address of each such director and each
such executive officer is Scotia Plaza, 40 King Street West, Toronto, Ontario,
Canada M5H 3Y2. All directors and executive officers listed below are citizens
of Canada.
<TABLE>
<CAPTION>
POSITION WITH PARENT; PRINCIPAL
NAME AND OCCUPATION OR EMPLOYMENT; 5-YEAR
BUSINESS ADDRESS EMPLOYMENT HISTORY
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
IAN W. DELANEY.......................................... Chairman, Sherritt International Corporation, an
Sherritt International Corporation international metals and oil and gas company, since
1133 Yonge Street September 1990; Chairman and Chief Executive Officer,
Toronto, Ontario Viridian Inc., a fertilizer, specialty products and
M4T 2Y7 technology company, from September 1990 to September
1996; Director of the Parent since 1992.
RONALD P. FOURNIER...................................... Vice Chairman of the Parent since June 1995; Deputy
Chief Executive Officer of the Parent since 1987;
Director of the Parent since 1975; Executive
Vice-President of the Parent from 1987 to June 1995.
KENNETH W. HARRIGAN..................................... Corporate Director and Consultant to Ford Motor Parent
of Canada, Limited; Chairman and Chief Executive Officer
of Fort Motor Parent of Canada, Limited from October
1990 to September 1992; Director of the Parent since
1994.
JOSEPH J. HEFFERNAN..................................... President and Chief Executive Officer Rothmans Inc. and
Rothmans, Benson & Hedges Rothmans, Benson & Inc. Hedges Inc. a tobacco products
800-1500 Don Mills Road manufacturer; Director of the Parent since 1996.
North York, Ontario
M3B 3L1
LEW C. HUTCHINSON....................................... President and Chief Operating Officer of Co-Steel Inc.
since November 1, 1996; Managing Director of Co-Steel
Sheerness since March 1992; President of Co-Steel Lasco
from April 1985 to February 1992;
MICHAEL M. KOERNER...................................... Director of the Parent since June 1997. President,
Canada Overseas Investments Limited, an investment
management company, since 1959; Director of the Parent
since 1970.
ROBERT W. KORTHALS...................................... Corporate Director; President of The Toronto- Dominion
Suite 2525 Bank, a Canadian chartered bank, from 1981 to 1995;
121 King Street W. Director of the Parent since 1971; Chairman of the
P.O. Box 36 Parent since June 1997.
Toronto, Ontario
M5H 3T9
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH PARENT; PRINCIPAL
NAME AND OCCUPATION OR EMPLOYMENT; 5-YEAR
BUSINESS ADDRESS EMPLOYMENT HISTORY
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
LIONEL H. SCHIPPER...................................... President, Schipper Enterprises, Inc., an investment
Schipper Enterprises Ltd. company, since 1981; Director of the Parent since 1970.
22 St. Clair Avenue East
Suite 1010
Toronto, Ontario
M4T 2S3
DR. MICHAEL D. SOPKO.................................... Chairman and Chief Executive Officer, Inco Limited, an
Inco Ltd. international metals and mining company, since April
Suite 1500 1992; President of Inco Limited from April 1991 to April
145 King Street West 1992; Vice- President, Human Resources of Inco Limited,
Toronto, Ontario from 1989 to 1991; Director of the Parent since 1997.
M5H 4B7
EDWARD G. REILLY........................................ Vice-President and Chief Financial Officer of the Parent
since 1983 and 1987, respectively.
BETH KIDNIE............................................. Vice-President and Controller of the Parent since 1996
and 1990, respectively.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF HOLDINGS AND PARENT. Lew C.
Hutchinson, Ronald P. Fournier and Edward G. Reilly are the sole Directors of
both the Purchaser and Holdings and serve, respectively, as President, Secretary
and Treasurer of both the Purchaser and Holdings. For the business address,
present principal occupation or employment and five-year employment history and
position with Parent of each of the Directors and Executive Officers of Parent
and Holdings see above.
32
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each stockholder of the
Company or such stockholder's broker, dealer, bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS:
PNC BANK, NATIONAL ASSOCIATION
C/O FIRST CITY TRANSFER COMPANY
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE: BY HAND/OVERNIGHT COURIER
P.O. Box 170 (For Eligible Institutions 505 Thornall Street, Suite
Iselin, NJ 08830 Only) 303
(732) 906-9269 Edison, NJ 08837
CONFIRM TELEPHONE:
(732) 906-9227 ext. 15
</TABLE>
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone number listed below. Additional copies of
this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be obtained from the Information Agent. A stockholder may also
contact brokers, dealers, commercial banks or trust companies for assistance
concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
(212) 269-5550
TOLL FREE (800) 714-3313
Banks and Brokerage Firms
Please call:
(212) 425-1685
33
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
NEW JERSEY STEEL CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED NOVEMBER 28, 1997
BY
CO-STEEL MERGER CORPORATION,
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
CO-STEEL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
THURSDAY, JANUARY 8, 1998 UNLESS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
PNC BANK, NATIONAL ASSOCIATION
C/O FIRST CITY TRANSFER COMPANY
<TABLE>
<S> <C> <C>
BY MAIL: BY FACSIMILE: BY HAND/OVERNIGHT COURIER:
P.O. Box 170 (For Eligible Institutions Only) 505 Thornall Street, Suite 303
Iselin, NJ 08830 (732) 906-9269 Edison, NJ 08837
CONFIRM TELEPHONE:
(732) 906-9227 ext. 15
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates for Shares
(as defined below) are to be forwarded herewith or, unless an Agent's Message
(as defined in Section 2 of the Offer to Purchase (as defined below)) is
utilized, if delivery of Shares is to be made by book-entry transfer to an
account maintained by the Depositary at a Book-Entry Transfer Facility as
defined in and pursuant to the procedures set forth in Section 2 of the Offer to
Purchase. Stockholders who deliver Shares by book-entry transfer are referred to
herein as "Book-Entry Stockholders" and other Stockholders are referred to
herein as "Certificate Stockholders." Stockholders whose certificates for Shares
are not immediately available or who cannot deliver either the certificates for,
or a Book-Entry Confirmation (as defined in Section 2 of the Offer to Purchase)
with respect to, their Shares and all other documents required hereby to the
Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase) must tender their Shares in accordance with the guaranteed delivery
procedures set forth in Section 2 of the Offer to Purchase. See Instruction 2.
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.
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
----------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF
REGISTERED OWNER(S)(PLEASE
FILL IN, IF BLANK, EXACTLY SHARES TENDERED
AS NAME(S) APPEAR(S) (ATTACH ADDITIONAL
CERTIFICATE(S)) LIST IF NECESSARY)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
TOTAL SHARES
- ----------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares described
herein are being tendered. See Instruction 4.
----------------------------------------------------------------------------
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution ______________________________________________
Check box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
Account Number _____________________________________________________________
Transaction Code Number ____________________________________________________
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s) _____________________________________________
Date of Execution of Notice of Guaranteed Delivery ________________________
If delivered by book-entry transfer check box:
/ / The Depository Trust Company
Account Number _____________________________________________________________
Transaction Code Number
----------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Co-Steel Merger Corporation, a Delaware
corporation (the "Purchaser") which is an indirect wholly-owned subsidiary of
Co-Steel Inc., a Canadian corporation, the above-described shares of Common
Stock, par value $.01 per share (the "Shares"), of New Jersey Steel Corporation,
a Delaware corporation (the "Company"), upon the terms and subject to the
conditions set forth in the Purchaser's Offer to Purchase dated November 28,
1997 (the "Offer to Purchase"), and this Letter of Transmittal (which, together
with any amendments or supplements thereto or hereto, collectively constitute
the "Offer"), receipt of which is hereby acknowledged.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Shares tendered herewith in accordance with the
terms 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
Shares that are being tendered hereby (and any and all other Shares or other
securities or rights issued or issuable in respect thereof on or after November
28, 1997), and irrevocably constitutes and appoints PNC Bank, National
Association, c/o First City Transfer Company (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 Shares (and any such other Shares or securities or rights), (a)
to deliver certificates for such Shares (and any such other Shares or securities
or rights) or transfer ownership of such Shares (and any such other Shares or
securities or rights) on the account books maintained by the 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, (b) to present such
Shares (and any such other Shares or securities or rights) for transfer on the
Company's books and (c) to receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares (and any such other Shares or
securities or rights), all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the tendered Shares
(and any and all other shares or other securities or rights issued or issuable
in respect of such Shares on or after November 21, 1997) 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 Shares (and any and all such other Shares or securities
or rights).
3
<PAGE>
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby irrevocably appoints Lew C. Hutchinson, Ronald P.
Fournier and Edward G. Reilly, 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 vote at any annual, special or adjourned meeting of
the Company's stockholders or otherwise in such manner as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, to execute any written consent concerning any matter as
each such attorney-in-fact and proxy or his substitute shall in his sole
discretion deem proper with respect to, and to otherwise act as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, the Shares tendered hereby that have been accepted for
payment by the Purchaser prior to the time any such action is taken and with
payment by the Purchaser prior to the time any such action is taken and with
respect to which the undersigned is entitled to vote (and any and all other
Shares or other securities or rights issued or issuable in respect of such
Shares on or after November 21, 1997). This appointment is effective when, and
only to the extent that, the Purchaser accepts for payment such Shares as
provided in the Offer to Purchase. This power of attorney and proxy are
irrevocable and are granted in consideration of the acceptance for payment of
such Shares in accordance with the terms of the Offer. Upon such acceptance for
payment, all prior powers of attorney, proxies and consents given by the
undersigned with respect to such Shares (and any such other Shares or 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) by the undersigned.
The undersigned understands that the valid tender of Shares pursuant to any
of the procedures described in Section 2 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment in the name(s) of the registered
holder(s) appearing under "Description of Shares Tendered." Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing under "Description of Shares
Tendered." In the event that both "Special Delivery Instructions" and "Special
Payment Instructions" are completed, please issue the check for the purchase
price and/or return any certificates for Shares not tendered or accepted for
payment (and any accompanying documents, as appropriate) in the name of, and
deliver such check and/or return such certificates (and any accompanying
documents, as appropriate) to, the person or persons so indicated. Please credit
any Shares 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 "Special Payment Instructions" to transfer any Shares from the name of the
registered holder thereof if the Purchaser does not accept for payment any of
the Shares so tendered.
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11.
Number of Shares represented by the lost or destroyed certificates:
4
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not accepted for
payment and/or the check for the purchase price of Shares accepted for payment
are to be issued in the name of someone other than the undersigned.
Issue: / / Check / / Certificate(s) to:
Name: __________________________________________________________________________
(Please Print)
Address: _______________________________________________________________________
_______________________________________________________________________________
(Include Zip Code)
_______________________________________________________________________________
(Employer Identification or Social Security Number)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not accepted for
payment and/or the check for the purchase price of Shares accepted for payment
are to be sent to someone other than the undersigned, or to the undersigned at
an address other than that above.
Mail: / / Check / / Certificate(s) to:
Name ___________________________________________________________________________
(Please Print)
Address ________________________________________________________________________
_______________________________________________________________________________
(Include Zip Code)
_______________________________________________________________________________
(Employer Identification or Social Security Number)
5
<PAGE>
<TABLE>
<S> <C> <C>
SIGN SIGN HERE SIGN
HERE (ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW) HERE
</TABLE>
(SIGNATURE(S) OF STOCKHOLDER(S))
__________________________________________________________
[LOGO]
__________________________________________________________
(SIGNATURE(S) OF STOCKHOLDER(S)
__________________________________________________________
Dated: ______________________________________________ 1997
(Must be signed by registered holder(s) as name(s)
appear(s) on the certificate(s) for the Shares or on a
security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees,
executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary
or representative capacity, please provide the following
information and see Instruction 5.)
Name(s) __________________________________________________
__________________________________________________________
(PLEASE PRINT)
Capacity (Full Title) ____________________________________
__________________________________________________________
(INCLUDE ZIP CODE)
Address __________________________________________________
Daytime Area Code and Telephone No. ______________________
Employer Identification or Social Security Number ________
(SEE SUBSTITUTE FORM
W-9)
6
<PAGE>
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature _________________________________
Name _________________________________________________
______________________________________________________
(PLEASE PRINT)
Name of Firm _________________________________________
Address ______________________________________________
______________________________________________________
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone No. __________________
Dated: __________________________________________ 1997
7
<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 Section, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
herewith, unless such registered holder(s) has completed either the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on this Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(such participant, 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. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed
by stockholders either if certificates are to be forwarded herewith or, unless
an Agent's Message (as defined below) is utilized, if delivery of Shares is to
be made pursuant to the procedures for book-entry transfer set forth in Section
2 of the Offer to Purchase. For a stockholder validly to tender Shares pursuant
to the Offer, either (a) a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, 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 Shares must be received by the Depositary at one of such addresses
or such Shares must be delivered pursuant to the procedures for book-entry
transfer set forth herein (and a Book-Entry Confirmation received by the
Depositary), in each case prior to the Expiration Date, or (b) the tendering
stockholder must comply with the guaranteed delivery procedures set forth below
and in Section 2 of the Offer to Purchase.
If a stockholder desires to tender Shares pursuant to the Offer and such
stockholder's certificates for Shares are not immediately available or the
procedures for book-entry transfer cannot be completed on a timely basis or time
will not permit all required documents to reach the Depositary prior to the
Expiration Date, such stockholder's tender may be effected by properly
completing and duly executing the Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase.
Pursuant to such procedures, (a) such tender must be made by or through an
Eligible Institution, (b) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by the Purchaser, must
be received by the Depositary prior to the Expiration Date and (c) the
certificates for all tendered Shares in proper form for transfer (or a
Book-Entry Confirmation with respect to all such Shares), together with 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 any other required documents, must be received
by the Depositary within three trading days after the date of execution of such
Notice of Guaranteed Delivery as provided in Section 2 of the Offer to Purchase.
A "trading day" is any day on which the New York Stock Exchange, is open for
business.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
8
<PAGE>
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile hereof), waive any right to receive any
notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
fill in the number of Shares that are to be tendered in the box entitled "Number
of Shares Tendered." In any such case, new certificate(s) for the remainder of
the Shares that were evidenced by the old certificate(s) will be sent to the
Shares that were evidenced by the old certificate(s) will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the acceptance for payment
of, and payment for, the Shares tendered herewith. All Shares represented by
certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder of the Shares
tendered hereby, the signature must correspond with the name as written on the
face of the certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or accepted for payment are to be issued
to, a person other than the registered owner(s). Signatures on such certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates. Signatures on such certificates or stock powers must be guaranteed
by an Eligible Institution.
6. STOCK TRANSFER TAXES. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale of Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or accepted for payment are to be
registered in the name of, any person(s) other than the registered owner(s), or
if tendered 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 owner(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.
9
<PAGE>
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares not accepted for payment are to
be returned to, a person other than the signer of this Letter of Transmittal or
if a check is to be sent and/or such certificates are to be returned to a person
other than the signer of this Letter of Transmittal or to an address other than
that shown above, the appropriate boxes on this Letter of Transmittal should be
completed.
8. WAIVER OF CONDITIONS. The Purchaser reserves the absolute right in its
sole discretion to waive any of the specified conditions of the Offer, in whole
or in part, in the case of any Shares tendered.
9. 31% BACKUP WITHHOLDING. In order to avoid backup withholding of Federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on
Substitute Form W-9 below in this Letter of Transmittal and certify under
penalty of perjury that such TIN is correct and that such stockholder is not
subject to backup withholding. If a stockholder does not provide such
stockholder's correct TIN or fails to provide the certifications described
above, the Internal Revenue Service (the "IRS") may impose a $50 penalty on such
stockholder and payment of cash to such stockholder pursuant to the Offer may be
subject to backup withholding of 31%.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the U.S. federal income tax
liability of the person subject to the backup withholding, provided 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 stockholder upon filing an
income tax return.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held 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 W9" for additional guidance on which
number to report.
10
<PAGE>
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders 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 the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or 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
directed to the Information Agent at its address set forth below.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary by checking the box immediately preceding the
special payment/ special delivery instructions and indicating the number of
Shares lost. The stockholder will then be instructed as to the steps that must
be taken in order to replace the certificate. This Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost or
destroyed certificates have been followed.
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 DATE AND EITHER CERTIFICATES FOR TENDERED
SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT
TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION
DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR
GUARANTEED DELIVERY.
PAYER'S NAME: PNC BANK, NATIONAL ASSOCIATION, C/O FIRST CITY TRANSFER COMPANY
PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND
CERTIFY BY SIGNING AND DATING BELOW
<TABLE>
<S> <C> <C>
SUBSTITUTE Part I--Taxpayer identification Social security number
FORM W-9 number-- for all accounts, enter OR
DEPARTMENT OF THE TREASURY taxpayer identification number in the Employer
INTERNAL REVENUE SERVICE box at right. (For the most identification number
individuals, this is your social (If awaiting TIN,
security number. If you do not have a write "Applied For")
number, see Obtaining a Number in the
enclosed GUIDELINES.) Certify by
signing and dating below.
Note: If the account is in more than
one name, see the chart in the
enclosed Guidelines to determine which
number to give the payer.
PAYER'S REQUEST FOR Part II--For Payees Exempt From Backup Withholding, see the
TAXPAYER IDENTIFICATION enclosed GUIDELINES and complete as instructed therein.
NUMBER (TIN)
</TABLE>
PART 2--CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT:
(1) the number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me) and
(2) I am not subject to backup withholding because (a) I am exempt from
backup withholding or (b) I have not been notified by the Internal
Revenue Service ("IRS") that I am subject to backup withholding as a
result of a failure to report all interest 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) in Part 2 above if
you have been notified by the IRS that you are subject to back up
withholding because of under reporting interest or dividends on your tax
returns. However, if after being notified by the IRS that you are 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). (Also see instructions in the enclosed Guidelines)
Signature________________________________________________ Date ___________, 1997
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9
12
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
NEW JERSEY STEEL CORPORATION
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer (as
defined below) if certificates for shares of Common Stock, par value $.01 per
share (the "Shares"), of New Jersey Steel Corporation, a Delaware corporation
(the "Company") are not immediately available or if the procedure for book-entry
transfer cannot be completed on a timely basis or time will not permit all
required documents to reach the Depositary prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase). This form may be delivered by
hand to the Depositary or transmitted by telegram, facsimile transmission or
mail to the Depositary and must include a guarantee by an Eligible Institution
(as defined in Section 2 of the Offer to Purchase). See Section 2 of the Offer
to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
PNC BANK, NATIONAL ASSOCIATION
C/O FIRST CITY TRANSFER COMPANY
<TABLE>
<CAPTION>
BY MAIL: BY FACSIMILE: BY HAND/OVERNIGHT COURIER:
<S> <C> <C>
(For Eligible Institutions
Only)
(732) 906-9269 505 Thornall Street, Suite
P.O. Box 170 CONFIRM TELEPHONE: 303
Iselin, NJ 08830 (732) 906-9227 ext. 15 Edison, NJ 08837
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A
FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID
DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Co-Steel Merger Corporation, a Delaware
corporation (the "Purchaser") which is an indirect wholly-owned subsidiary of
Co-Steel Inc., a Canadian corporation, upon the terms and subject to the
conditions set forth in the Purchaser's Offer to Purchase dated November 28,
1997 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"), receipt of which is hereby acknowledged, the number of Shares set
forth below, all pursuant to the guaranteed delivery procedures set forth in
Section 2 of the Offer to Purchase.
<TABLE>
<S> <C>
Number of Shares Name(s) of Record Holder(s)
Certificate Nos. (if available)
PLEASE PRINT
If the Shares will be tendered by book-entry Address(es)
transfer through The Depository Trust Company
("DTC") check the box / /
Daytime Area Code and Tel. No.:
DTC Account Number:
Dated: Signature(s):
</TABLE>
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares tendered hereby, in
proper form for transfer, or a Book-Entry Confirmation (as defined in the Offer
to Purchase) with respect to such Shares, in any such case together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase), and any other required documents, within
three trading days (as defined in the Offer to Purchase) after the date hereof.
The Eligible Institution that completes this form must communicate this
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
Name of Firm: __________________________________________________________________
Authorized Signature: __________________________________________________________
Title: _________________________________________________________________________
Address: _______________________________________________________________________
(Zip Code)
Area Code and Telephone Number: ________________________________________________
Date: __________________, 199___
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR
SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE>
D.F. KING & CO., INC.
77 WATER STREET
NEW YORK, NEW YORK 10005
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
NEW JERSEY STEEL CORPORATION
AT
$23 NET PER SHARE
BY
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
CO-STEEL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
THURSDAY, JANUARY 8, 1998, UNLESS EXTENDED.
November 28, 1997
To Brokers, Dealers, Banks,
Trust Companies and Other Nominees:
We have been appointed by Co-Steel Merger Corporation, a Delaware
corporation (the "Purchaser") and an indirect wholly-owned subsidiary of
Co-Steel Inc., a Canadian corporation ("Parent"), to act as Information Agent in
connection with the Purchaser's offer to purchase all outstanding shares of
common stock, par value $.01 per share (the "Shares"), of New Jersey Steel
Corporation, a Delaware corporation (the "Company"), at $23 per Share, net to
the seller in cash, upon the terms and subject to the conditions set forth in
the Purchaser's Offer to Purchase dated November 28, 1997 (the "Offer to
Purchase"), and the related Letter of Transmittal (which, together with any
supplements or amendments thereto, collectively constitute the "Offer").
Please furnish copies of the enclosed materials to those of your clients for
whom you hold Shares registered in your name or in the name of your nominee.
Enclose herewith are copies of the following documents:
1. Offer to Purchase dated November 28, 1997;
2. Letter of Transmittal to be used by stockholders of the Company
accepting the Offer;
3. The Letter to Stockholders of the Company from the President and
Chief Executive Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9;
4. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee, with space
provided for obtaining such client's instructions with regard to the Offer;
5. Notice of Guaranteed Delivery;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to PNC Bank, National Association, c/o
First City Transfer Company, the Depositary.
<PAGE>
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES THAT WOULD REPRESENT AT LEAST 80% OF THE OUTSTANDING SHARES (DETERMINED
ON A FULLY DILUTED BASIS FOR ALL OUTSTANDING STOCK OPTIONS AND ANY OTHER RIGHTS
TO ACQUIRE SHARES THAT ARE OR WOULD BE VESTED PRIOR TO DECEMBER 31, 1997), (2)
ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF
1976, AS AMENDED, AND THE REGULATIONS THEREUNDER APPLICABLE TO THE PURCHASE OF
SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED AND (3) THE
REQUIREMENTS OF THE NEW JERSEY INDUSTRIAL SITE RECOVERY ACT HAVING BEEN
SATISFIED THROUGH A REMEDIATION AGREEMENT WITH THE NEW JERSEY DEPARTMENT OF
ENVIRONMENTAL PROTECTION.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE OFFER AND
WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON THURSDAY,
JANUARY 8, 1998, UNLESS EXTENDED.
The Board of Directors of the Company has unanimously approved the Offer and
the Merger and determined that the terms of the Offer and the Merger are fair
to, and in the best interests of, the stockholders of the Company and
unanimously recommends that stockholders of the Company accept the Offer and
tender their Shares.
The Offer is being made pursuant to the Tender Offer Agreement and Agreement
and Plan of Merger dated as of November 21, 1997 (the "Merger Agreement"), among
Parent, the Purchaser, Von Roll Holding AG and the Company pursuant to which,
following the consummation of the Offer and the satisfaction or waiver of
certain conditions, the Purchaser will be merged with and into the Company, with
the Company surviving the merger as a wholly-owned subsidiary of Parent (the
"Merger"). In the Merger, each outstanding Share (other than Shares owned by the
Company or any subsidiary of the Company or by Parent, the Purchaser or any
other subsidiary of Parent or by stockholders, if any, who are entitled to and
who properly exercise dissenters' rights under Delaware law) will be converted
into the right to receive $23 per Share, without interest, as set forth in the
Merger Agreement and described in the Offer to Purchase.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by PNC Bank, National Association (the
"Depositary"), of (a) certificates for (or a timely Book-Entry Confirmation (as
defined in the Offer to Purchase) with respect to) such Shares, (b) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer
effected pursuant to the procedure set forth in Section 2 of the Offer to
Purchase, an Agent's Message (as defined in the Offer to Purchase), and (c) any
other documents required by the Letter of Transmittal. Accordingly, tendering
stockholders may be paid at different times depending upon when certificates for
Shares or Book-Entry Confirmations with respect to Shares are actually received
by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE
PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF
THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent and the
Depositary as described in the Offer to Purchase) in connection with the
solicitation of tenders of Shares pursuant to the Offer. You will be reimbursed
upon request for customary mailing and handling expenses incurred by you in
forwarding the enclosed offering materials to your customers.
2
<PAGE>
Questions and requests for additional copies of the enclosed material may be
directed to the Information Agent at the address and telephone number set forth
on the back cover of the enclosed Offer to Purchase.
Very truly yours,
D.F. KING & CO., INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, THE DEPOSITARY, THE
INFORMATION AGENT OR ANY AFFILIATE THEREOF OR AUTHORIZE YOU OR ANY OTHER PERSON
TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF
ANY OF THEM WITH RESPECT TO THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
NEW JERSEY STEEL CORPORATION
AT
$23 NET PER SHARE
BY
CO-STEEL MERGER CORPORATION
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
CO-STEEL INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
THURSDAY, JANUARY 8, 1998, UNLESS EXTENDED.
November 28, 1997
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated November 28,
1997 (the "Offer to Purchase"), and a related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") relating to an offer by Co-Steel Merger Corporation, a Delaware
corporation (the "Purchaser") and a wholly-owned subsidiary of Co-Steel Inc., a
Canadian corporation ("Parent"), to purchase shares of Common Stock, par value
$.01 per share (the "Shares"), of New Jersey Steel Corporation, a Delaware
corporation (the "Company"), at $23 per Share, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer. Also enclosed is
the Letter to Stockholders of the Company from the President and Chief Executive
Officer of the Company accompanied by the Company's Solicitation/Recommendation
Statement on Schedule 14D-9.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to tender any of or all the
Shares 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 price is $23 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer.
2. The Board of Directors of the Company has unanimously approved the Offer
and the Merger (as defined below) and determined that the terms of the Offer and
the Merger are fair to, and in the best interests of, the stockholders of the
Company and unanimously recommends that the stockholders of the Company accept
the Offer and tender their Shares.
3. The Offer is being made for all outstanding Shares.
4. The Offer is being made pursuant to the Tender Offer Agreement and
Agreement and Plan of Merger dated as of November 21, 1997 (the "Merger
Agreement"), among Parent, the Purchaser and the Company pursuant to which,
following the consummation of the Offer and the satisfaction or waiver of
<PAGE>
certain conditions, the Purchaser will be merged with and into the Company, with
the Company surviving the merger as a wholly-owned subsidiary of Parent (the
"Merger") In the Merger, each outstanding Share (other than Shares owned by the
Company or by any subsidiary of the Company or by Parent, the Purchaser or any
other subsidiary of Parent or by stockholders, if any, who are entitled to and
who properly exercise dissenters' rights under Delaware law) will be converted
into the right to receive $23 per Share, without interest, as set forth in the
Merger Agreement and described in the Offer to Purchase.
5. The Offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn prior to the expiration of the Offer that
number of Shares which would represent at least 80% of the outstanding Shares
(determined on a fully diluted basis for all outstanding stock options and any
other rights to acquire Shares that have vested or will have vested prior to
December 31, 1997), (2) any waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the regulations thereunder applicable
to the purchase of Shares pursuant to the Offer having expired or been
terminated, and (3) the requirements of the New Jersey Industrial Site Recovery
Act having been satisfied through a Remediation Agreement with the New Jersey
Department of Environmental Protection.
6. The Offer and withdrawal rights will expire at 5:00 p.m., New York City
time, on Thursday, January 8, 1998, unless the Offer is extended by the
Purchaser.
7. The Purchaser will pay any stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any of or all your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
set forth below. An envelope to return your instructions to us is enclosed. If
you authorize tender of your Shares, all such Shares will be tendered unless
otherwise specified below. Your instructions to us should be forwarded promptly
to permit us to submit a tender on your behalf prior to the expiration of the
Offer.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by PNC Bank, National Association, c/o
First City Transfer Company (the "Depositary"), of (a) certificates for (or a
timely Book-Entry Confirmation (as defined in the Offer to Purchase) with
respect to) such Shares, (b) a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
or, in the case of a book-entry transfer effected pursuant to the procedure set
forth in Section 2 of the Offer to Purchase, an Agent's Message (as defined in
the Offer to Purchase), and (c) any other documents required by the Letter of
Transmittal. Accordingly, tendering stockholders may be paid at different times
depending upon when certificates for Shares or Book-Entry Confirmations with
respect to Shares are actually received by the Depositary. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE
PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN
MAKING SUCH PAYMENT.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
ALL OUTSTANDING SHARES OF COMMON STOCK OF
NEW JERSEY STEEL CORPORATION
The undersigned acknowledges receipt of your letter enclosing the Offer to
Purchase, dated November 28, 1997, of Co-Steel Merger Corporation, a Delaware
corporation and an indirect wholly-owned subsidiary of Co-Steel Inc., a Canadian
corporation, and the related Letter of Transmittal, relating to shares of Common
Stock, par value $.01 per share of New Jersey Steel Corporation, a Delaware
corporation (the "Shares").
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned on the terms and conditions set forth
in such Offer to Purchase and the related Letter of Transmittal.
<TABLE>
<CAPTION>
Dated: 1997
<S> <C>
SIGNATURE(S)
Number of Shares to be Tendered
PLEASE PRINT NAME(S)
Shares
Address
(INCLUDE ZIP CODE)
Area Code and Telephone No.
Taxpayer Identification or
Social Security No.
</TABLE>
- ------------------------
* Unless otherwise indicated, it will be assumed that all your Shares are to
be tendered.
3
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER -- Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the payer.
<TABLE>
<CAPTION>
- -------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- -------------------------------------------------------
<C> <S> <C>
1. An individual's The individual
account
2. Two or more The actual owner of
individuals (joint the account or, if
account) combined funds, any
one of the
individuals (1)
3. Husband and wife The actual owner of
(joint account) the account or, if
joint funds, either
person (1)
4. Custodian account of The minor (2)
a minor (Uniform Gift
to Minors Act)
5. Adult and minor The adult or, if the
(joint account) minor is the only
contributor, the
minor (1)
6. Account in the name The ward, minor, or
of guardian or incompetent person
committee for a (3)
designated ward,
minor, or incompetent
person
7. (a) The usual The grantor-trustee
revocable savings (1)
trust account
(grantor is also
trustee)
(b) So-called trust
account that is The actual owner (1)
not a legal or
valid trust under
State law
- -------------------------------------------------------
<CAPTION>
GIVE THE
EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
<C> <S> <C>
- -------------------------------------------------------
8. Sole proprietorship The owner (4)
account
9. A valid trust, The legal entity (Do
estate, or pension not furnish the
trust identifying number of
the personal
representative or
trustee unless the
legal entity itself
is not designated in
the account title.)
(5)
10. Corporate account The corporation
11. Religious, The organization
charitable, or
educational
organization account
12. Partnership account The partnership
held in the name of
the business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or The broker or nominee
registered nominee
15. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
state or local
government, school
district, or prison)
that receives
agricultural program
payments
</TABLE>
- ---------------------------------------------
- ---------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor 5 or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
1
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
(PAGE 2)
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security 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 on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan or a custodial account under Section 403(b) (7).
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a)
- An exempt charitable remainder trust, or a nonexempt trust described in
section 4947(a) (1).
- An entity registered at all times 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 partner.
- Payments of patronage dividends where the amount received is not paid in
money
- Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b) (5) to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER IF THE PAYMENTS ARE INTEREST, DIVIDENDS OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under Sections 6041, 6041A(a),
6045 and 6050A.
PRIVACY ACT NOTICE--Section 6019 requires most recipients of dividend, interest
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 required to file
tax returns. Payers must generally withhold 31% of taxable interest, dividend
and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to wilful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includable payment for interest, dividends, or
patronage 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
evidence 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.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
2
<PAGE>
FOR IMMEDIATE RELEASE
NOVEMBER 21, 1997
CO-STEEL INC. ANNOUNCES AGREEMENT TO ACQUIRE
NEW JERSEY STEEL CORPORATION
TORONTO, ONTARIO -- Co-Steel Inc. today announced that it has entered into a
definitive agreement to acquire New Jersey Steel Corporation. Co-Steel will
acquire the outstanding shares of New Jersey Steel Corporation, located in
Sayreville, New Jersey, including those held by controlling shareholder Von Roll
Holding AG, for US$23.00 per share in cash, and assume outstanding debt of
approximately US$32 million, for a total value of approximately US$170 million.
This transaction, scheduled to be completed in mid-January 1998, is subject
to review under the Hart Scott-Rodino Antitrust Improvements Act and other
customary conditions.
"The acquisition of New Jersey Steel is consistent with Co-Steel's growth
strategy and represents an important step in increasing our steelmaking capacity
and market share," said Lew Hutchinson, president and chief executive officer,
Co-Steel Inc. "New Jersey Steel is an excellent strategic fit with Co-Steel's
existing businesses and will accelerate our growth in the North American steel
market and contribute to increased earnings." The transaction will be financed
with cash on hand and existing credit capabilities. The new facility will
operate under the name Co-Steel Sayreville and will increase Co-Steel's capacity
to 4.0 million tons of finished steel products.
New Jersey Steel, whose common stock is listed on the NASDAQ National Market
System, is the largest producer of rebar in the Northeastern U.S. The company
produces a full range of rebar sizes and epoxy coated rebar. The company's
geographic location will give Co-Steel a strong position in the 5.0 million ton
U.S. rebar market, in which Co-Steel does not currently participate, and
provides easy access to important growth markets in New England and the
Mid-Atlantic States.
New Jersey Steel recently completed a US$65 million modernization program
and has achieved significant gains in product quality, cost control, efficiency
and productivity that have resulted in a strong turnaround in 1997 operating
profits. The Sayreville plant consists of a 600,000 ton per annum rolling mill
and a new 800,000 ton per annum melt shop with scrap preheating capability, a
feature that reduces energy consumption.
According to Mr. Hutchinson, Co-Steel will expand New Jersey Steel's product
mix to include a broader range of higher value rounds, squares, flats and light
structural products to complement Co-Steel Lasco's product range. These products
will be sold in Canada and the U.S. through Co-Steel Lasco's existing marketing,
distribution, and transportation channels.
"There are attractive synergies to be achieved through this acquisition,"
explained Mr. Hutchinson. "There is a great potential to build earnings at
Co-Steel Sayreville through product diversification and by taking advantage of
the new melt shop capabilities."
Mr. Hutchinson also noted that New Jersey Steel is located within six miles
of Co-Steel Raritan, in Perth Amboy, New Jersey, and will provide billets to
Co-Steel Raritan, which has excess rolling capacity.
The acquisition will be accomplished by a tender offer for all outstanding
shares of New Jersey Steel at US$23.00 per share. The controlling shareholder of
New Jersey Steel has irrevocably committed to tender its shares to the tender
offer. Following the tender offer, a Co-Steel subsidiary will be merged with New
Jersey Steel so that New Jersey Steel will become wholly owned by Co-Steel.
Merrill Lynch & Co. acted as exclusive financial adviser to Co-Steel in
connection with this transaction.
Co-Steel Inc. is one of the world's largest minimill steel producers and
steel scrap processors. The Company has a current annual capacity of 3.4 million
tons of finished steel products and 3.0 million tons of ferrous and non-ferrous
material. Co-Steel manufactures and markets special quality steel bar and rod,
<PAGE>
reinforcing steel bar and rod, merchant bar, structural shapes and flat rolled
steel products used principally in the construction, automotive, appliance,
machinery and equipment industries.
Co-Steel's minimill operations consist of Co-Steel Raritan, New Jersey;
Co-Steel Lasco, Whitby, Ontario; Co-Steel Sheerness, Kent, England, and Gallatin
Steel Company, Gallatin County, Kentucky, Co-Steel's 50%-owned flat rolled steel
joint venture. Co-Steel also processes and trades steel scrap for its own use
and for sale to third parties through North American-based Co-Steel Recycling
and U.S.-based Mayer Parry Recycling Ltd., leading scrap processing and trading
companies with ferrous and non-ferrous recovery sites.
Co-Steel Inc. common shares are listed on the Toronto Stock Exchange and the
Montreal Exchange and trade under the CEI symbol.
For more information, please contact:
Lew Hutchinson
Co-Steel Inc.
(416) 366-4500
2
<PAGE>
TENDER OFFER AGREEMENT
AND
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
CO-STEEL INC.,
CO-STEEL MERGER CORPORATION,
NEW JERSEY STEEL CORPORATION
AND
VON ROLL HOLDING AG
<PAGE>
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
ARTICLE I THE OFFER
1.01 The Offer...................................................................... 2
1.02 Company Actions................................................................ 4
ARTICLE II THE MERGER
2.01 The Merger..................................................................... 5
2.02 Closing........................................................................ 6
2.03 Effective Time................................................................. 6
2.04 Effects of the Merger.......................................................... 6
2.05 Certificate of Incorporation; By-Laws.......................................... 6
2.06 Directors and Officers......................................................... 7
ARTICLE III CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
3.01 Conversion of Securities....................................................... 7
(a) Capital Stock of Sub....................................................... 7
(b) Cancellation of Treasury Stock and Parent Owned Stock...................... 7
(c) Conversion of Company Common Stock......................................... 8
(d) Dissenting Shares.......................................................... 8
3.02 Exchange of Certificates....................................................... 8
(a) Paying Agent............................................................... 8
(b) Exchange Procedures........................................................ 9
(c) Interest................................................................... 9
(d) No Further Rights in Shares................................................ 9
(e) Withholding Rights......................................................... 10
(f) No Liability............................................................... 10
(g) Lost, Stolen or Destroyed Certificates..................................... 10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.01 Organization and Qualification; Subsidiaries................................... 10
4.02 Certificates of Incorporation and By-Laws...................................... 11
4.03 Capitalization................................................................. 11
4.04 Authority...................................................................... 12
4.05 No Conflict; Required Filings and Consents..................................... 13
4.06 Information Supplied........................................................... 14
4.07 Reports; Financial Statements.................................................. 15
4.08 Absence of Certain Changes or Events........................................... 16
4.09 Permits; Compliance............................................................ 16
4.10 Absence of Litigation.......................................................... 17
4.11 Employee Benefit Plans; ERISA.................................................. 17
4.12 Taxes.......................................................................... 20
4.13 Certain Business Practices and Transactions.................................... 22
4.14 Environmental Matters.......................................................... 22
4.15 Real Property.................................................................. 25
4.16 Personal Property.............................................................. 25
4.17 Contracts...................................................................... 26
4.18 Labor Matters.................................................................. 26
4.19 Inventories.................................................................... 26
4.20 Intellectual Property.......................................................... 26
4.21 Opinion of Financial Advisor................................................... 27
4.22 Brokers........................................................................ 27
</TABLE>
i
<PAGE>
<TABLE>
<C> <S> <C>
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
5.01 Organization and Qualification; Subsidiaries................................... 27
5.02 Certificate of Incorporation and By-Laws....................................... 28
5.03 Authority...................................................................... 28
5.04 No Conflict: Required Filings and Consents..................................... 28
5.05 Information Supplied........................................................... 29
5.06 Brokers........................................................................ 30
5.07 Interested Stockholder......................................................... 30
5.08 Financing...................................................................... 30
ARTICLE VI COVENANTS
6.01 Affirmative Covenants of the Company........................................... 30
6.02 Negative Covenants of the Company.............................................. 31
6.03 Access and Information......................................................... 33
6.04 Confidentiality................................................................ 33
6.05 Notification of Certain Matters................................................ 33
ARTICLE VII ADDITIONAL AGREEMENTS
7.01 Stockholder Approval; Preparation of Proxy Statement........................... 34
7.02 Indemnification................................................................ 34
7.03 Reasonable Efforts............................................................. 36
7.04 Stock Options.................................................................. 36
7.05 ISRA........................................................................... 37
7.06 Company Debt................................................................... 37
7.07 No Solicitation................................................................ 37
7.08 Fees and Expenses.............................................................. 40
7.09 Public Announcements........................................................... 42
ARTICLE VIII CLOSING CONDITIONS
8.01 Conditions of Obligations of Each Party Under This Agreement................... 42
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER
9.01 Termination.................................................................... 42
9.02 Effect of Termination.......................................................... 44
9.03 Amendment...................................................................... 44
9.04 Extension; Waiver.............................................................. 44
ARTICLE X GENERAL PROVISIONS
10.01 Non-survival of Representations, Warranties and Agreements..................... 46
10.02 Notices........................................................................ 46
10.03 Interpretation................................................................. 46
10.04 Headings....................................................................... 47
10.05 Severability................................................................... 47
10.06 Entire Agreement............................................................... 47
10.07 Assignment..................................................................... 47
10.08 Parties in Interest............................................................ 47
10.09 Failure or Indulgence Not Waiver; Remedies Cumulative.......................... 48
10.10 Governing Law.................................................................. 48
10.11 Counterparts................................................................... 48
</TABLE>
ii
<PAGE>
AGREEMENT AND PLAN OF MERGER dated as of November 21, 1997 (this
"AGREEMENT") by and among CO-STEEL INC., a Canadian corporation ("PARENT"),
CO-STEEL MERGER CORPORATION, a Delaware corporation and an indirect wholly-owned
subsidiary of Parent ("SUB"), NEW JERSEY STEEL CORPORATION, a Delaware
corporation (the "COMPANY") and VON ROLL HOLDING AG, a Swiss corporation ("VON
ROLL").
BACKGROUND
WHEREAS, in furtherance of the acquisition of the Company by Parent on the
terms and subject to the conditions set forth in this Agreement, Parent proposes
to cause Sub to make a tender offer (as it may be amended from time to time as
permitted under this Agreement, the "OFFER") to purchase all the outstanding
shares (collectively, the "SHARES" and individually a "SHARE") of Common Stock,
par value $.01 per share, of the Company (the "COMPANY COMMON STOCK"), at a
purchase price (the "OFFER PRICE") of $23.00 per Share or such higher price as
may be paid in the Offer, net to the seller in cash, without interest, upon the
terms and subject to the conditions set forth in this Agreement; and
WHEREAS, Von Roll, through its Von Roll Steel Holdings AG subsidiary, owns
3,561,500 Shares or approximately 60% of the Shares and, subject to the terms
and conditions hereof, has agreed to tender such Shares in the Offer; and
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
have approved the Offer and the merger of Sub with the Company (the "MERGER")
upon the terms and subject to the conditions set forth in this Agreement,
whereby each Share, other than Shares owned directly or indirectly by Parent or
the Company and Dissenting Shares (as defined in Section 3.01(d)), will be
converted into the right to receive the Offer Price; and
WHEREAS, Parent, Sub, the Company and Von Roll desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Sub and the Company hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. THE OFFER. (a) Subject to the provisions of this Agreement, as
promptly as practicable but in no event later than five business days after the
date of the public announcement by Parent and the Company of this Agreement, Sub
shall, and Parent shall cause Sub to, commence the Offer. The initial expiration
date for the Offer shall be January 8, 1998. The obligation of Sub to, and of
Parent to cause Sub to, accept for payment, and pay for, any Shares tendered
pursuant to the Offer shall be subject only to the conditions set forth in
Exhibit A (the "OFFER CONDITIONS") (any of which may be waived in whole or in
part by Sub in its sole discretion, provided that, without the consent of the
Company, Sub shall not waive the Minimum Condition (as defined in Exhibit A))
and to the terms and conditions of this Agreement. Sub expressly reserves the
right to modify the terms of the Offer, except that, without the consent of the
Company, Sub shall not (i) reduce the number of Shares subject to the Offer,
(ii) reduce the Offer Price, (iii) amend or add to the Offer Conditions, (iv)
except as provided in the next sentence, extend the Offer, (v) change the form
of consideration payable in the Offer or (vi) amend any other term of the Offer
in any manner adverse to the holders of the Shares, Notwithstanding the
foregoing, Sub may, without the consent of the Company, (A) extend the Offer, if
at the scheduled or extended expiration date of the Offer any of the Offer
Conditions shall not be satisfied or waived, until such time as such conditions
are satisfied or waived, (B) extend the Offer for any period required by any
rule, regulation, interpretation or
1
<PAGE>
position of the Securities and Exchange Commission (the "SEC") or the staff
thereof applicable to the Offer and (C) extend the Offer on one or more
occasions for an aggregate period of not more than 10 business days beyond the
latest expiration date that would otherwise be permitted under clause (A) or (B)
of this sentence, if on such expiration date there shall not have been tendered
at least 90% of the Shares. Parent and Sub agree that if all of the Offer
Conditions are not satisfied on any scheduled expiration date of the Offer then,
provided that all such conditions are reasonably capable of being satisfied, Sub
shall extend the Offer from time to time until such conditions are satisfied or
waived, provided that Sub shall not be required to extend the Offer beyond May
5, 1998. Subject to the terms and conditions of the Offer and this Agreement,
Sub shall, and Parent shall cause Sub to, accept for payment, and pay for, all
Shares validly tendered and not withdrawn pursuant to the Offer that Sub becomes
obligated to accept for payment, and pay for, pursuant to the Offer as promptly
as practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall file with
the SEC a Tender Offer Statement on Schedule 14D-1 (the "SCHEDULE 14D-1") with
respect to the Offer, which shall contain an offer to purchase and a related
letter of transmittal and summary advertisement, if required, (such Schedule
14D-1 and the documents included therein pursuant to which the Offer will be
made, together with any supplements or amendments thereto, the "Offer
Documents"). Parent and Sub agree that the Offer Documents shall comply as to
form in all material respects with the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), and the rules and regulations promulgated
thereunder and the Offer Documents, on the date first published, sent or given
to the Company's stockholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation or warranty is made by Parent or Sub with respect to information
supplied by the Company or any of its stockholders specifically for inclusion or
incorporation by reference in the Offer Documents. Each of Parent, Sub and the
Company agree promptly to correct any information provided by it for use in the
Offer Documents if and to the extent that such information shall have become
false or misleading in any material respect, and Parent and Sub further agree to
take all steps necessary to cause the Schedule 14D-1 as so corrected to be filed
with the SEC and the other Offer Documents as so corrected to be disseminated to
the Company's stockholders, in each case as and to the extent required by
applicable federal securities laws. The Company and its counsel shall be given
reasonable opportunity to review and comment upon the Offer Documents prior to
their filing with the SEC or dissemination to the stockholders of the Company.
Parent and Sub agree to provide the Company and its counsel any comments Parent,
Sub or their counsel may receive from the SEC or its staff with respect to the
Offer Documents promptly after the receipt of such comments.
(c) Parent shall provide or cause to be provided to Sub on a timely basis
the funds necessary to accept for payment, and pay for, any Shares that Sub
becomes obligated to accept for payment, and pay for, pursuant to the Offer.
Parent shall (i) provide or cause to be provided to the Company on a timely
basis in connection with the transactions contemplated hereby substitute working
capital financing and funds or financing sufficient to repay in full the
Company's (A) obligations to PNC Bank under that certain Loan and Security
Agreement dated June 6, 1996, if required by said lender, (ii) at or prior to
the Closing, cause (x) all outstanding loans and accrued interest under the
Credit Agreement dated as of June 6, 1996 between the Company and Von Roll to be
paid in full, and (y) the termination of the Subordination and Intercreditor
Agreement date as of June 6, 1996 among Von Roll, the Company and PNC Bank
(formerly Midlantic Bank, National Association) and Von Roll's discharge or
release, in a manner satisfactory to Von Roll, from all obligations thereunder
(the Company's indebtedness under said Loan and Security Agreement and said
Credit Agreement, collectively, the "COMPANY DEBT"); and (iii) shall provide, or
cause the Company to provide Tube City, Inc., at or prior to the Closing, a
substitute guarantee or otherwise to effectuate the release of Von Roll from its
August 21, 1996 guarantee to Tube City, Inc. (the "TUBE CITY GUARANTEE").
2
<PAGE>
SECTION 1.02. COMPANY ACTIONS. (a) The Company hereby approves of and
consents to the Offer and represents that the Board of Directors of the Company,
at a meeting duly called and held, duly and unanimously adopted resolutions
adopting this Agreement, approving the Offer and the Merger, determining, as of
the date of such resolutions, that the terms of the Offer and the Merger are
fair to, and in the best interests of, the Company's stockholders, recommending
that the Company's stockholders accept the Offer, tender their Shares pursuant
to the Offer and approve this Agreement (if required) and approving the
acquisition of Shares by Sub pursuant to the Offer and the other transactions
contemplated by this Agreement. The Company has been advised by each of its
directors and executive officers that each such person currently intends to
tender all Shares (other than Shares, if any, held by such person that, if
tendered, could cause such person to incur liability under the provisions of
Section 16(b) of the Exchange Act) owned by such person pursuant to the Offer.
(b) On the date the Offer Documents are filed with the SEC, the Company
shall file with the SEC a Solicitation/Recommendation Statement on Schedule
14D-9 with respect to the Offer (such Schedule 14D-9, as supplemented or amended
from time to time, the "SCHEDULE 14D-9") containing, subject to the terms of
this Agreement, the recommendation described in paragraph (a) and shall mail the
Schedule 14D-9 to the stockholders of the Company. The Schedule 14D-9 shall
comply as to form in all material respects with the requirements of the Exchange
Act and the rules and regulations promulgated thereunder and, on the date filed
with the SEC and on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation or warranty is made by
the Company with respect to information supplied by Parent or Sub specifically
for inclusion in the Schedule 14D-9. Each of the Company, Parent and Sub agrees
promptly to correct any information provided by it for use in the Schedule 14D-9
if and to the extent that such information shall have become false or misleading
in any material respect, and the Company further agrees to take all steps
necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule
14D-9 as so amended or supplemented to be filed with the SEC and disseminated to
the Company's stockholders, in each case as and to the extent required by
applicable federal securities laws. Parent and its counsel shall be given
reasonable opportunity to review and comment upon the Schedule 14D-9 prior to
its filing with the SEC or dissemination to stockholders of the Company. The
Company agrees to provide Parent and its counsel any comments the Company or its
counsel may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments.
(c) In connection with the Offer and the Merger, the Company shall cause its
transfer agent to furnish Sub promptly with mailing labels containing the names
and addresses of the record holders of Shares as of a recent date and of those
persons becoming record holders subsequent to such date, together with copies of
all lists of stockholders, security position listings and computer files and all
other information in the Company's possession or control regarding the
beneficial owners of Shares, and shall furnish to Sub such information and
assistance (including updated lists of stockholders, security position listings
and computer files) as Parent may reasonably request in communicating the Offer
to the Company's stockholders. Subject to the requirements of applicable law,
and except for such steps as are necessary to disseminate the Offer Documents
and any other documents necessary to consummate the Merger, Parent and Sub and
their agents shall hold in confidence the information contained in any such
labels, listings and files, will use such information only in connection with
the Offer and the Merger and, if this Agreement shall be terminated, will
deliver, and will use their reasonable efforts to cause their agents to deliver,
to the Company all copies and any extracts or summaries from such information
then in their possession or control.
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ARTICLE II
THE MERGER
SECTION 2.01 THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL"), at the Effective Time, Sub shall be merged with and into the
Company. As a result of the Merger, the separate corporate existence of Sub
shall cease and the Company shall continue as the surviving corporation (the
"SURVIVING CORPORATION") and shall succeed to and assume all the rights and
obligations of Sub in accordance with the DGCL. At the election of Parent, to
the extent that any such action would not cause a failure of a condition to the
Offer or the Merger, (i) any direct or indirect wholly-owned subsidiary of
Parent may be substituted for and assume all of the rights and obligations of
Sub as a constituent corporation in the Merger or (ii) the Company may be merged
with and into Sub with Sub continuing as the Surviving Corporation with the
effects set forth above and in Section 2.04. In either such event, the parties
agree to execute an appropriate amendment to this Agreement in order to reflect
the foregoing.
SECTION 2.02 CLOSING. The closing of the Merger will take place at 10:00
a.m. (New York City Time) on a date to be specified by Parent or Sub, as soon a
practicable following satisfaction or waiver of the conditions set forth in
Article VIII (the "CLOSING DATE"; which date shall be no later than the tenth
business day following satisfaction or waiver of such conditions), at the
offices of Wilentz Goldman & Spitzer, 90 Woodbridge Center Drive, Woodbridge,
NJ, unless another date, time or place is agreed to in writing by the parties
hereto.
SECTION 2.03 EFFECTIVE TIME. As promptly as practicable after the Closing
Date, the parties hereto shall cause the Merger to be consummated by filing a
certificate of merger or other appropriate documents (in any such case, the
"CERTIFICATE OF MERGER") with the Secretary of State of the State of Delaware,
in such form as required by, and executed in accordance with the relevant
provisions of, the DGCL. The Merger shall become effective at such time as the
Certificate of Merger is duly filed, or at such other time as Sub and the
Company shall agree should be specified in the Certificate of Merger (the time
the Merger becomes effective being hereinafter referred to as the "EFFECTIVE
TIME").
SECTION 2.04 EFFECTS OF THE MERGER. At the Effective Time, the effects of
the Merger shall be as provided in Section 259 of The DGCL.
SECTION 2.05 CERTIFICATE OF INCORPORATION; BY-LAWS.
(a) At the Effective Time, the Certificate of Incorporation of the Company,
as in effect immediately prior to the Effective Time, shall be amended as of the
Effective Time so that Articles FIRST and FOURTH thereof shall read in their
entirety as follows:
"FIRST: The name of the Corporation is:
Co-Steel Sayreville, Inc."
"FOURTH: The aggregate number of shares of all classes of stock which
the Corporation shall have authority to issue is 1,000 shares of common
stock, par value $1.00 per share."
and as so amended shall be the Certificate of Incorporation of the Surviving
Corporation.
(b) At the Effective Time, the By-Laws of Sub, as in effect immediately
prior to the Effective Time, shall be the By-Laws of the Surviving Corporation
until thereafter changed or amended, subject to Section 7.02, as provided
therein or by applicable law.
SECTION 2.06 DIRECTORS AND OFFICERS. The directors of Sub immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation, and the officers of the Company immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation, each to
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hold office in accordance with the Certificate of Incorporation and By-Laws of
the Surviving Corporation and in each case until their respective resignation or
removal or their respective successors are duly elected and qualified, as the
case may be.
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 3.01 CONVERSION OF SECURITIES.
(A) CAPITAL STOCK OF SUB. Each share of capital stock of Sub ("SUB COMMON
STOCK") issued and outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and nonassessable share
of Common Stock, par value $1.00 per share, of the Surviving Corporation.
(B) CANCELLATION OF TREASURY STOCK AND PARENT OWNED STOCK. Each share of
Company Common Stock held in the treasury of the Company and each Share owned by
Parent or any direct or indirect wholly-owned subsidiary of Parent or of the
Company immediately prior to the Effective Time shall be canceled and
extinguished without any conversion thereof and no consideration shall be
delivered in exchange therefor.
(C) CONVERSION OF COMPANY COMMON STOCK. At the Effective Time, by virtue of
the Merger and without any action on the part of Parent, Sub, the Company or the
holders of the Shares, each Share (other than Shares to be canceled in
accordance with Section 3.01(b) and Dissenting Shares) shall be converted into
the right to receive the Offer Price in cash, without interest (the "MERGER
CONSIDERATION").
(D) DISSENTING SHARES. Notwithstanding anything in this Agreement to the
contrary, any issued and outstanding Shares held by a person (a "DISSENTING
STOCKHOLDER") who objects to the Merger and complies with all the provisions of
Delaware law concerning the right of holders of Shares to dissent from the
Merger and require appraisal of their Shares ("DISSENTING SHARES") shall not be
converted as described in Section 3.01(c), but shall be converted into the right
to receive such consideration as may be determined to be due to such Dissenting
Stockholder pursuant to Delaware law. If, after the Effective Time, such
Dissenting Stockholder withdraws his demand for appraisal or fails to perfect or
otherwise loses his right to appraisal, in any case pursuant to the DGCL, his
shares shall be deemed to be converted as of the Effective Time into the right
to receive the Merger Consideration. The Company shall give Parent prompt notice
upon receipt by the Company of any written demands for appraisal rights,
withdrawal of such demands, and any other written communications delivered to
the Company pursuant to Section 262 of the DGCL, and the Company shall give
Parent the opportunity, to the extent permitted by law, to direct all
negotiations and proceedings with respect to such demands. The Company shall not
voluntarily make any payment with respect to any demands for appraisal rights
and shall not, except with the prior written consent of Parent, settle or offer
to settle any such demands.
SECTION 3.02 EXCHANGE OF CERTIFICATES.
(A) PAYING AGENT. Prior to the Effective Time, Parent shall designate a bank
or trust company to act as paying agent in the Merger (the "PAYING AGENT"), and,
from time to time on, prior to or after the Effective Time, Parent shall make
available, or cause the Surviving Corporation to make available, to the Paying
Agent cash in amounts and at the times necessary for the prompt payment of the
Merger Consideration upon surrender of certificates representing Shares as part
of the Merger pursuant to Section 3.01 (it being understood that any and all
interest earned on funds made available to the Paying Agent pursuant to this
Agreement shall be turned over to Parent).
(B) EXCHANGE PROCEDURES. As soon as reasonably practicable after the
Effective Time, Parent will instruct the Paying Agent to mail to each holder of
record of a certificate or certificates which
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immediately prior to the Effective Time evidenced outstanding Shares (other than
Shares held by Parent and Dissenting Shares) (the "CERTIFICATES") (i) a letter
of transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent and shall be in such form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for cash. Upon surrender
of a Certificate for cancellation to the Paying Agent together with such letter
of transmittal, duly executed, and such other customary documents as may be
required pursuant to such instructions, the holder of such Certificate shall be
entitled to receive the Merger Consideration in exchange therefor and the
Certificate so surrendered shall forthwith be canceled.
In the event of a transfer of ownership of Shares which is not registered in
the transfer records of the Company, cash may be paid in accordance with this
Article II to a transferee if the Certificate evidencing such Shares is
presented to the Paying Agent, accompanied by all documents required to evidence
and effect such transfer and by evidence that any applicable stock transfer
taxes have been paid. Until surrendered as contemplated by this Section 2.3,
each Certificate shall be deemed at any time after the Effective Time to
evidence only the right to receive the Merger Consideration upon such surrender
in accordance with the terms and conditions set forth herein.
(C) INTEREST. No interest shall be paid on the Merger Consideration.
(D) NO FURTHER RIGHTS IN SHARES. All cash paid upon the surrender for
exchange of certificates evidencing Shares in accordance with the terms and
conditions hereof shall be deemed to have been issued or paid in full
satisfaction of all rights pertaining to such Shares. At the Effective Time, the
stock transfer books of the Company shall be closed and there shall be no
further registration of transfers of Shares thereafter on the records of the
Company. On or after the Effective Time, any valid certificate evidencing Shares
presented to the Paying Agent or Parent for any reason shall evidence only the
right to receive the Merger Consideration in accordance with the terms and
conditions set forth herein.
(E) WITHHOLDING RIGHTS. Parent shall be entitled to deduct and withhold from
the consideration otherwise payable pursuant to this Agreement to any holder of
Shares such amounts as Parent is required to deduct and withhold with respect to
the making of such payment under the Internal Revenue Code of 1986, as amended
(the "CODE"), or any provision of state, local or foreign tax law. To the extent
that amounts are so withheld by Parent, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the
Shares in respect of which such deduction and withholding were made by Parent.
(F) NO LIABILITY. None of Parent, Sub, the Company or the Paying Agent shall
be liable to any person in respect of any cash delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If any
Certificates shall not have been surrendered immediately prior to such date on
which any payment pursuant to this Article III would otherwise escheat to or
become the property of any Governmental Entity (as defined in Section 4.05(b)),
the cash payment in respect of such Certificate shall, to the extent permitted
by applicable law, become the property of the Surviving Corporation, free and
clear of all claims or interests of any person previously entitled thereto.
(G) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any certificates
evidencing Shares shall have been lost, stolen or destroyed, the Paying Agent
shall pay to such holder the Merger Consideration required pursuant to Section
3.01, in exchange for such lost, stolen or destroyed certificates, upon the
making of an affidavit of that fact by the holder thereof with such assurances
as the Paying Agent, in its discretion and as a condition precedent to the
payment of the Merger Consideration, may reasonably require of the holder of
such lost, stolen or destroyed certificates.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Sub that:
SECTION 4.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of the
Company and its subsidiary, N.J.S.C. Investment Co., Inc., a New Jersey
corporation ("SUBSIDIARY"), is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
organization, has all requisite corporate power and corporate authority to own,
lease and operate its properties and to carry on its business as it is now being
conducted and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary, other
than where the failure to be so duly qualified and in good standing would not
have a Company Material Adverse Effect. The term "COMPANY MATERIAL ADVERSE
EFFECT," as used in this Agreement, shall mean any change or effect that,
individually or when taken together with all other such changes or effects,
would be materially adverse to the financial condition, business or operations
of the Company and Subsidiary, taken as a whole, at the time of such change or
effect, other than changes or effects attributable to (i) occurrences relating
to the economy in general or the Company's industry in general and not
specifically relating to the Company, (ii) the delay or cancellation of orders
for the Company's products directly attributable to the announcement of this
Agreement or (iii) in the case of the Company, stockholder litigation brought or
threatened against the Company or any member of its Board of Directors in
respect of this Agreement, the Offer or the Merger. All of the outstanding
capital stock of Subsidiary is owned by the Company. The Company does not own an
equity interest in any other corporation, partnership, joint venture or other
entity.
SECTION 4.02 CERTIFICATES OF INCORPORATION AND BY-LAWS. The Company has
furnished to Parent true, correct and complete copies of the Certificates of
Incorporation and the By-Laws, in each case as in effect on the date hereof, of
the Company and Subsidiary. Neither the Company nor Subsidiary is in violation
of any of the provisions of its Certificate of Incorporation or By-Laws.
SECTION 4.03 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of (i) 15,000,000
shares of Company Common Stock of which at the date hereof: (A) 5,920,500 shares
are issued and outstanding; (B) no shares are held in the treasury of the
Company; and (C) 127,500 shares are reserved for future issuance pursuant to
stock options (the "Stock Options") granted pursuant to the Company's Incentive
Stock Option Plan and 1996 Stock Option Plan (the "Option Plans") and 185,000
are reserved for future issuance pursuant to stock options available for grant
under the Option Plans; and (ii) 5,000,000 shares of preferred stock, par value
$.01 per share, of the Company ("COMPANY PREFERRED STOCK"), of which no shares
are issued or outstanding. No shares of capital stock of the Company are
reserved for any other purpose. Each of the outstanding shares of capital stock
of, or other equity interests in, the Company and Subsidiary has been duly
authorized and validly issued, and, in the case of shares of capital stock, are
fully paid and nonassessable, and such shares or other equity interests owned by
the Company are owned free and clear of all security interests, liens, claims,
pledges, agreements, limitations on the Company's voting rights, charges or
other encumbrances of any nature whatsoever, except that PNC Bank and Von Roll
hold security interests in all of the Company's assets pursuant to the
provisions of the Company Debt.
(b) Except as set forth in Section 4.03(a) above, there are no options,
warrants or other rights (including registration rights), agreements,
arrangements or commitments of any character to which the Company or Subsidiary
is a party relating to the issued or unissued capital stock of the Company or
Subsidiary or obligating the Company or Subsidiary to grant, issue or sell any
shares of the capital stock of the Company or Subsidiary, by sale, lease,
license or otherwise. There are no obligations, contingent or otherwise, of the
Company or Subsidiary to (x) repurchase, redeem or otherwise acquire any capital
stock
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or other equity interests of the Company or Subsidiary; or (y) provide material
funds to, or make any material investment in (in the form of a loan, capital
contribution or otherwise), or provide any guarantee with respect to the
obligations of, Subsidiary or any other person. Neither the Company nor
Subsidiary, directly or indirectly owns, or has agreed to purchase or otherwise
acquire, the capital stock of, or any interest convertible into or exchangeable
or exercisable for the capital stock of, any corporation, partnership, joint
venture or other business entity. Except as set forth in Section 4.03 of the
disclosure schedule attached to and forming a part of this Agreement (the
"COMPANY DISCLOSURE SCHEDULE"), there are no agreements, arrangements or
commitments of any character (contingent or otherwise) pursuant to which any
person is or may be entitled to receive any payment based on the revenues or
earnings, or calculated in accordance therewith, of the Company or Subsidiary.
There are no voting trusts, proxies or other agreements or understandings to
which the Company or Subsidiary is a party or by which either of them is bound
with respect to the voting of any shares of capital stock of the Company or
Subsidiary.
SECTION 4.04 AUTHORITY. The Company has all requisite corporate power and
corporate authority to execute and deliver this Agreement, and, subject to, if
required by law, the approval of the Merger by the holders of a majority of the
Shares in accordance with the DGCL (the "COMPANY STOCKHOLDER APPROVAL"), to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the Company
and the consummation by the Company of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of the
Company, subject, in the case of this Agreement, to the Company Stockholder
Approval if such approval is required by law. This Agreement has been duly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery thereof by Parent and Sub, constitutes the valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except that (a) such enforcement may be subject to any
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
laws, now or hereafter in effect, relating to or limiting creditors' rights
generally and (b) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
Except as set forth in Section 4.04 of the Company Disclosure Schedule with
respect to written agreements between the Company and certain of its officers
and employees, the Company has taken all steps necessary to approve and to
exempt the transactions contemplated by this Agreement from the provisions of
Section 203 of the DGCL and any change of control, "anti-takeover" or similar
provisions of the Certificate of Incorporation or By-Laws of the Company or any
agreement, arrangement or understanding to which the Company is a party or which
is applicable to it.
SECTION 4.05 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by the Company do not, and
the performance of this Agreement by the Company will not, (i) conflict with or
violate the Certificate of Incorporation or By-Laws of the Company or
Subsidiary, (ii) conflict with or violate any federal, state, foreign or local
law, statute, ordinance, rule, regulation, order, judgment or decree, including,
such as protect human health (collectively, as used in this Section 4.05,
Section 4.07 and Section 5.05, "LAWS"), applicable to the Company or Subsidiary
or by which any of their respective properties is bound or subject to, or (iii)
except as set forth in Section 4.05 of the Company Disclosure Schedule, result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or require payment
under, or result in the creation of a lien or encumbrance on, any of the
properties or assets of the Company or Subsidiary pursuant to any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or Subsidiary is a party or
by which the Company or Subsidiary or any of their respective properties is
bound or subject to, except for any such breach, default, event, right of
termination, amendment, acceleration or cancellation, payment obligation
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or lien or encumbrance described in clause (iii) that would not, individually or
in the aggregate, have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company do not, and
the performance of this Agreement by the Company will not, require the Company
or Parent to obtain any consent, approval, authorization or permit of, or to
make any filing with or notification to, any governmental or regulatory
authority, domestic or foreign ("GOVERNMENTAL ENTITIES"), or any other third
party, except for (i) applicable requirements, if any, of the Securities Act of
1933, as amended (the "SECURITIES ACT"), and the Exchange Act, state securities
or blue sky laws ("BLUE SKY LAWS"), the National Association of Securities
Dealers, Inc. ("NASD") and the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR ACT"), and the New Jersey Industrial Site Recovery
Act, N.J.S.A. ss. 13:1L-6 ET SEQ., as amended by P.L. 1993, c. 139 ("ISRA"), and
the filing and recordation of a Certificate of Merger as required by the DGCL
and (ii) the consents, approvals, authorizations, permits, filings and
notifications set forth in Section 4.05 of the Company Disclosure Schedule.
SECTION 4.06. INFORMATION SUPPLIED. None of the information supplied or to
be supplied by the Company specifically for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9 or (iii) the
information to be filed by the Company in connection with the Offer pursuant to
Rule 14f-1 promulgated under the Exchange Act (the "INFORMATION STATEMENT"),
will, in the case of the Offer Documents, the Schedule 14D-9 and the Information
Statement, at the respective times the Offer Documents, the Schedule 14D-9 and
the Information Statement are filed with the SEC or first published, sent or
given to the Company's stockholders, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Schedule 14D-9 and the
Information Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Parent or Sub specifically for inclusion or incorporation by
reference therein.
SECTION 4.07 REPORTS; FINANCIAL STATEMENTS. (a) Since December 1, 1996, (x) the
Company has filed all forms, reports, statements and other documents required to
be filed with (i) the SEC, including, (A) all Annual Reports on Form 10-K, (B)
all Quarterly Reports on Form 10-Q, (C) all proxy statements relating to
meetings of stockholders (whether annual or special) pursuant to Section 14 of
the Exchange Act, (D) all Reports on Form 8-K, (E) all other reports or
registration statements and (F) all amendments and supplements to all such
reports and registration statements (collectively referred to herein as the
"COMPANY SEC REPORTS"), and (ii) any other applicable state securities
authorities and (y) the Company and Subsidiary have filed all forms, reports,
statements and other documents required to be filed with any other applicable
federal or state, foreign or local regulatory authorities, except where such
failure to file did not have and could not reasonably be expected to have a
Company Material Adverse Effect (all such forms, reports, statements and other
documents in clauses (x) and (y) of this Section 4.07(a) being referred to
herein, collectively, as the "COMPANY REPORTS"). The Company Reports, including
all Reports filed after the date of this Agreement and prior to the Effective
Time, (i) were or will be prepared in accordance with the requirements of
applicable law (including, with respect to the Company SEC Reports, the
Securities Act and the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Company SEC Reports) and
(ii) did not at the time they were filed, or will not at the time they are
filed, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
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(b) The Company's consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports filed
prior to, on or after the date of this Agreement (i) have been or will be
prepared in accordance with the published rules and regulations of the SEC and
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved (except as disclosed in such financial
statements) and (ii) fairly present or will fairly present the consolidated
financial position of the Company and the consolidated results of operations and
cash flows as of and for the periods indicated, except that any unaudited
interim financial statements were or will be subject to normal and recurring
year-end adjustments and may not be prepared in accordance with GAAP to the
extent permitted by applicable SEC forms and regulations. Except as set forth in
Section 4.07 of the Company Disclosure Schedule, neither the Company nor
Subsidiary has incurred any liability or obligation other than (a) such as have
been reflected in the consolidated financial statements of the Company through
August 31, 1997 in accordance with GAAP or the applicable SEC accounting rules
and (b) such as have been incurred in the ordinary course of business since
August 31, 1997.
SECTION 4.08 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Company SEC Reports filed prior to the date of this Agreement or as
contemplated in this Agreement or as set forth in Section 4.08 of the Company
Disclosure Schedule, since August 31, 1997, (i) the Company has conducted its
businesses only in the ordinary course and in a manner consistent with past
practice, (ii) the Company has not taken any action which would be prohibited
pursuant to Section 6.02 if taken after the date hereof, and (iii) there has not
been any change in the results of operations, condition (financial or
otherwise), properties, assets or business of the Company or Subsidiary, which,
individually or in the aggregate, has had or could reasonably be expected to
have a Company Material Adverse Effect.
SECTION 4.09 PERMITS; COMPLIANCE. Each of the Company and Subsidiary is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted (other than those required under Environmental Laws
(as hereinafter defined), the Company's representations as to which are
exclusively governed by Section 4.14 hereof) (collectively, the "COMPANY
PERMITS"), and there is no action, proceeding or investigation pending or, to
the knowledge of the Company, threatened regarding suspension or cancellation of
any of the Company Permits, except where the failure to possess, or the
suspension or cancellation of, such Company Permits would not have a Company
Material Adverse Effect. None of the Company Permits will lapse, terminate or
expire as a result of the transactions contemplated hereby. The Company and
Subsidiary are in compliance in all material respects with all Laws (other than
Environmental Laws, the Company's representations as to which are exclusively
governed by Section 4.14 hereof) and Company Permits (other than those required
under Environmental Laws, the Company's representations as to which are
exclusively covered by Section 4.14 hereof). During the period commencing on
December 1, 1996 and ending on the date hereof, neither the Company nor
Subsidiary has received from any Governmental Entity any notification with
respect to possible conflicts, defaults or violations of Laws (other than
Environmental Laws, the Company's representations as to which are exclusively
governed by Section 4.14 hereof).
SECTION 4.10 ABSENCE OF LITIGATION. Except as disclosed in the Company SEC
Reports filed prior to the date of this Agreement or as set forth in Section
4.10 of the Company Disclosure Schedule, (a) there is no claim, action, suit,
litigation, proceeding, arbitration or investigation of any kind, at law or in
equity (including actions or proceedings seeking injunctive relief), pending or,
to the knowledge of the Company, threatened against the Company or Subsidiary or
any properties or rights of the Company or Subsidiary (except for claims,
actions, suits, litigations, proceedings, arbitrations, or investigations which,
individually or in the aggregate, would not reasonably be expected to have a
Company Material Adverse Effect), and (b) neither the Company nor Subsidiary is
subject to any continuing order of, consent decree, settlement agreement or
other similar written agreement with, or continuing investigation by, any
Governmental Entity, or any judgment, order, writ, injunction, decree or award
of any Governmental Entity or arbitrator, including, cease-and-desist or other
orders.
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SECTION 4.11 EMPLOYEE BENEFIT PLANS; ERISA.
(a) Section 4.11 of the Company Disclosure Schedule contains a true, correct
and complete list of each bonus, deferred compensation, incentive compensation,
stock purchase, stock option, severance or termination pay, hospitalization or
other medical, life or other insurance, supplemental unemployment benefits,
profit-sharing, pension, or retirement plan, program, agreement or arrangement,
and each other employee benefit plan, program, agreement or arrangement,
sponsored, maintained or contributed to or required to be contributed to by the
Company or by any trade or business, whether or not incorporated (an "ERISA
Affiliate"), that together with the Company would be deemed a "single employer"
within the meaning of Section 4001 of the Employee Retirement Income Security
Act of 1974, as amended, and the rules and regulations promulgated thereunder
("ERISA") or Sections 414(b) or (c) of the Code, for the benefit of any employee
or former employee of the Company or any ERISA Affiliate, whether formal or
informal and whether legally binding or not (the "PLANS"). Section 4.11 of the
Company Disclosure Schedule identifies each of the Plans that is an "employee
benefit plan," as that term is defined in Section 3(3) of ERISA (such plans
being hereinafter referred to collectively as the "ERISA PLANS").
(b) No liability under Title IV of ERISA has been incurred by the Company or
any ERISA Affiliate since the effective date of ERISA that has not been
satisfied in full, and no condition exists that presents a material risk to the
Company or any ERISA Affiliate of incurring a liability under such Title, other
than liability for premiums due the Pension Benefit Guaranty Corporation
("PBGC") (which premiums have been paid when due). No reportable event within
the meaning of Section 4043 of ERISA (as to which notices would be required to
be filed) has occurred with respect to any ERISA Plan.
(c) The PBGC has not instituted proceedings to terminate any ERISA Plan and,
to the knowledge of the Company, no condition exists that presents a material
risk that such proceedings will be instituted.
(d) No ERISA Plan is subject to Title IV of ERISA.
(e) Neither the Company nor any ERISA Affiliate, nor any ERISA Plan, nor any
trust created thereunder, nor any trustee or administrator thereof has engaged
in a transaction in connection with which the Company or any ERISA Affiliate,
any ERISA Plan, any such trust, or any trustee or administrator thereof, or any
party dealing with any ERISA Plan or any such trust could be subject to either a
civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a tax
imposed pursuant to Section 4975 or 4976 of the Code.
(f) Full payment has been made, or will be made in accordance with Section
404(a)(6) of the Code, of all amounts which the Company or any ERISA Affiliate
is required to pay under the terms of each ERISA Plan as of the last day of the
most recent plan year thereof ended prior to the date of this Agreement, and all
such amounts properly accrued through the Effective Time with respect to the
current plan year thereof will be paid by the Company on or prior to the
Effective Time or will be properly recorded in the Company's financial
statements in accordance with GAAP; and no ERISA Plan or any trust established
thereunder has incurred any "accumulated funding deficiency" (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived, as of
the last day of the most recent fiscal year of each ERISA Plan ended prior to
the date of this Agreement; and all contributions required to be made with
respect thereto (whether pursuant to the terms of any ERISA Plan or otherwise),
on or prior to the Effective Time, have been timely made.
(g) No ERISA Plan is a "multi-employer plan," as such term is defined in
Section 3(37) of ERISA, nor is any ERISA Plan a plan described in Section
4063(a) of ERISA.
(h) Each Plan has been operated and administered in accordance with its
terms and applicable law, including, but not limited to, ERISA and the Code.
(i) Each ERISA Plan which is intended to be "qualified" within the meaning
of Section 401(a) of the Code has received a favorable determination letter from
the Internal Revenue Service (the "IRS"), and
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has made, or will make on or prior to the Effective Time, any amendments
required to be made before the Effective Time as a result of any amendments to
the Code since the date of the most recent determination letter, and the trusts
maintained thereunder are exempt from taxation under Section 501(a) of the Code.
(j) No Plan provides benefits, including, death or medical benefits (whether
or not insured), with respect to current or former employees of the Company or
any ERISA Affiliate beyond their retirement or other termination of service,
other than (i) coverage mandated by applicable law, (ii) retirement benefits
under the "employee pension plans" (as defined in Section 3(2) of ERISA)
identified in Section 4.11 of the Company Disclosure Schedule pursuant to
Section 4.11(a), or (iii) benefits the full cost of which is borne by the
current or former employee.
(k) Except as set forth in Section 4.11 of the Company Disclosure Schedule,
the consummation of the transactions contemplated by this Agreement will not (i)
entitle any current or former employee or officer of the Company or any ERISA
Affiliate to severance pay, unemployment compensation or any other payment,
except as provided in this Agreement, (ii) accelerate the time of payment or
vesting, or increase the amount of compensation due any such employee or
officer, or (iii) result in any prohibited transaction described in Section 406
of ERISA or Section 4975 of the Code for which an exemption is not available.
(l) With respect to each Plan that is funded wholly or partially through an
insurance policy, there will be no liability of the Company or any ERISA
Affiliate, as of the Effective Time, under any such insurance policy or
ancillary agreement with respect to such insurance policy in the nature of a
retroactive rate adjustment, loss sharing arrangement or other actual or
contingent liability arising wholly or partially out of events occurring prior
to the Effective Time, except to the extent recorded in the Company's
consolidated financial statements contained in the Company SEC Reports.
(m) No ERISA Plan, whether or not terminated, holds, or has discharged any
of its liabilities through the acquisition of, any annuity contract.
(n) Except as set forth in Section 4.11(n) of the Company Disclosure
Schedule, the Company is not liable for any excise tax under Chapter 43 of the
Code.
SECTION 4.12 TAXES. Except as described in detail in Section 4.12 of the
Company Disclosure Schedule:
(a) The Company and Subsidiary have (i) duly filed all Tax Returns (as
hereinafter defined) required to be filed by them within the time and in the
manner prescribed by law and such Tax Returns are true, correct and complete in
all respects, and (ii) paid on a timely basis all Taxes (as hereinafter defined)
due and payable on such Tax Returns.
(b) (i) No deficiencies for any Taxes have been proposed, asserted or
assessed against the Company or Subsidiary by any taxing authority with respect
to liabilities for Taxes of any of them which have not been fully paid or
finally settled, (ii) any such deficiency set forth in Section 4.12 of the
Company Disclosure Schedule is being contested in good faith through appropriate
proceedings and (iii) an adequate reserve in accordance with GAAP has been
established in the consolidated financial statements included in the Company SEC
Reports for each of the Company or Subsidiary, as the case may be, with respect
to any Taxes which have been or may be proposed, assessed or asserted against
them.
(c) The Company and Subsidiary have established adequate reserves in
accordance with GAAP for all Taxes not yet due and payable.
(d) The applicable statutes of limitations with respect to the assessment of
federal income taxes of the Company and Subsidiary have expired through their
taxable years ended November 30, 1993, and audits of the Company and Subsidiary
for such taxes are complete through their taxable years ended November 30, 1992.
The applicable statutes of limitations with respect to the assessment of Taxes
of the Company by the State of New Jersey have expired through the Company's
taxable year ended November 30, 1993, and
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audits of the Company for such Taxes are complete through the Company's taxable
year ended November 30, 1995. Subsidiary has not been the subject of any audit
by the State of New Jersey. There are no outstanding agreements or waivers
extending the statute of limitations applicable to any taxable year or Tax
Return of the Company or Subsidiary.
(e) No Tax Returns of the Company or Subsidiary are currently under Audit
(as hereinafter defined) by the IRS or any other taxing authority and no notice
of any such Audit has been received.
(f) To the Company's knowledge, each transaction that could give rise to an
understatement of the federal income tax liability of the Company or Subsidiary
within the meaning of Section 6662(d) of the Code is either (i) a transaction as
to which there is or was, at the relevant time, substantial authority for its
treatment by the Company or Subsidiary within the meaning of Section 6662
(d)(2)(B) of the Code or (ii) adequately disclosed on Tax Returns in accordance
with Section 6662(d)(2)(B) of the Code.
(g) There are no liens for Taxes (other than current Taxes not yet due) on
the assets of the Company or Subsidiary
(h) Neither the Company nor Subsidiary has participated in, or cooperated
with, an international boycott within the meaning of Section 999 of the Code.
Neither the Company nor Subsidiary has made an election under Section 341(f) of
the Code.
(i) Neither the Company nor Subsidiary is a party to any contract, agreement
or other arrangement pursuant to which the Company could be required to make any
payment that would not be deductible by reason of Section 280G or 162(m) of the
Code.
(j) There has been no change in the method of accounting utilized by the
Company that would require any adjustment to taxable income pursuant to Section
481 of the Code, and the Company has no knowledge that the IRS has proposed any
such adjustment or change in the accounting method.
(k) Neither the Company nor Subsidiary is a party to any agreement providing
for the allocation or apportionment of any liability for Taxes, payments of
Taxes or Tax benefits or refunds.
(l) As used in this Agreement:
(i) "AUDIT" means any audit, assessment of Taxes, examination or other
proceeding by the IRS or any other Governmental Entity responsible for the
administration of any Taxes, proceeding or appeal of such proceeding
relating to Taxes;
(ii) "TAXES" means all federal, state, local and foreign taxes, charges
and fees and other assessments of a similar nature (whether imposed directly
or through withholding), including any interest, additions to tax, and
penalties applicable thereto; and
(iii) "TAX RETURNS" means all federal, state, local and foreign tax
returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax Return relating to Taxes.
SECTION 4.13 CERTAIN BUSINESS PRACTICES AND TRANSACTIONS.
(a) Neither the Company nor Subsidiary nor any directors, officers, agents
or employees of the Company or Subsidiary has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, or (iii) made any other unlawful payment.
(b) Except as set forth in Section 4.13 of the Company Disclosure Schedule,
no officer or director of the Company or Subsidiary, or any affiliate or
associate of any such officer or director, or any affiliate or
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associate of the Company or Subsidiary, including, Von Roll, has a material
interest in any contract or property (real or personal), tangible or intangible,
used in or pertaining to the business of the Company or Subsidiary.
SECTION 4.14 ENVIRONMENTAL MATTERS.
(a) As used in this Agreement:
(i) "CLEANUP" means all actions required to (A) prevent the Release (as
hereinafter defined) or threatened Release of, or (B) cleanup, remove, treat
or remediate, Hazardous Materials in the indoor or outdoor environment,
including but not limited to performance of studies and investigations and
response to any government requests for information or documents.
(ii) "ENVIRONMENTAL CLAIM" means any claim, action, cause of action,
investigation or written notice by any person or entity alleging potential
liability arising out of, based on or resulting from (A) the presence,
Release or threatened Release of Hazardous Materials into ambient air, water
or land or otherwise relating to the generation, use, treatment, storage,
disposal or handling of Hazardous Materials, or (B) circumstances forming
the basis of any violation (or alleged violation) of or any other liability
under any Environmental Law (as hereinafter defined) or any permit or
approval issued pursuant thereto.
(iii) "ENVIRONMENTAL LAWS" means all federal, state and local laws
relating to pollution or protection of human health or the environment,
including, laws relating to Releases or threatened Releases of Hazardous
Materials into ambient air, water or land or otherwise relating to the
manufacture, processing, distribution, generation, use, treatment, storage,
disposal or handling of Hazardous Materials.
(iv) "HAZARDOUS MATERIALS" means all substances defined as Hazardous
Substances, Oils, Pollutants or Contaminants in the National Oil and
Hazardous Substances Pollution Contingency Plan, 40 C.F.R. ss. 300.5, or
defined as such by, or regulated as such under, any Environmental Law.
(v) "RELEASE" means any release, spill, emission, discharge, leaking,
pumping, injection, deposit, disposal, dispersal, leaching or migration into
the indoor or outdoor environment.
(b) Except as described in Section 4.14 of the Company Disclosure Schedule,
the Company and Subsidiary are in compliance with all applicable Environmental
Laws (which compliance includes, but is not limited to, the possession by the
Company and Subsidiary of all permits and other governmental authorizations
required under applicable Environmental Laws), except where noncompliance,
individually or in the aggregate, has not had or would not reasonably be
expected to have a Company Material Adverse Effect. All such permits and
governmental authorizations are in full force and effect and the Company is in
compliance therewith, except where noncompliance, individually or in the
aggregate, has not had or would not reasonably be expected to result in a
Company Material Adverse Effect. Except as described in Section 4.14 of the
Company Disclosure Schedule, since December 1, 1992 the Company and Subsidiary
have not received written notice of any Environmental Claim which, individually
or in the aggregate, has had or would reasonably be expected to have a Company
Material Adverse Effect.
(c) Except as set forth in Section 4.14 of the Company Disclosure Schedule,
to the Company's knowledge, no additional permits or other governmental
authorizations under Environmental Laws will be required to permit the Surviving
Corporation to conduct the business of the Company in full compliance with all
applicable Environmental Laws immediately following the Effective Time.
(d) Except as described in Section 4.14 of the Company Disclosure Schedule,
neither the Company nor Subsidiary has, and, to the Company's knowledge, no
other person has, Released, placed, stored, buried or disposed of any Hazardous
Material on, beneath, from or adjacent to any real property now or at
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any time owned, operated or leased by the Company or any of its predecessors (as
used in this Section 4.14, the "REAL PROPERTY"), except (1) for inventories of
such items used and to be used in the ordinary course of business of the Company
(which inventories were and are stored, tested, handled or disposed of
substantially in accordance with applicable Environmental Laws and in a manner
such that there has been no Release of any such items), or (2) where such
Release, placement, storage, burial or disposal of Hazardous Materials,
individually or in the aggregate, has not had or could not reasonably be
expected to have a Company Material Adverse Effect. No site or facility owned,
operated or used by the Company or Subsidiary nor the Real Property is or
contains a treatment, storage or disposal facility as defined by the federal
Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, 42 U.S.C.
ss. 6901 ET SEQ., or any analogous state law. Except as set forth in Section
4.14 of the Company Disclosure Schedule, no person, including but not limited to
the Company, Subsidiary or the Surviving Corporation, will be required to
conduct closure, post closure or corrective action with respect to any site or
facility owned, operated or used by the Company or the Real Property, pursuant
to RCRA or any analogous state law, as a result of any act or omission of the
Company or Subsidiary or any use of or Release of any Hazardous Material at or
from the Real Property prior to the Closing Date.
(e) The Company has delivered or otherwise made available for inspection to
Parent and Sub true, complete and correct copies and results of any reports,
studies, analyses, tests or monitoring possessed, available to or initiated by
the Company pertaining to Hazardous Materials in, on, beneath or adjacent to the
Real Property, or regarding the Company's compliance with or liability under
applicable Environmental Laws.
(f) Except as described in Section 4.14 of the Company Disclosure Schedule,
the Real Property does not contain any underground storage tanks, asbestos,
polychlorinated biphenyls, underground injection wells, radioactive materials,
or septic tanks in which process wastewater or any Hazardous Materials have been
discharged or disposed, in each case, as the result of a Release by the Company,
or, to the Company's knowledge, by any other person.
(g) No Lien has been recorded under any Environmental Law with respect to
any assets, facility or Real Property owned, operated, leased or controlled by
the Company.
(h) No currently owned Real Property of the Company, or, to the Company's
knowledge, no previously owned Real Property of the Company is (i) listed or
proposed for listing on the National Priorities List under CERCLA or (ii) listed
in the Comprehensive Environmental Response, Compensation, Liability Information
System List promulgated pursuant to CERCLA, or on any comparable list maintained
by any governmental authority having jurisdiction over any such Real Property.
SECTION 4.15 REAL PROPERTY.
(a) Section 4.15 of the Company Disclosure Schedule describes all real
property to which the Company has legal or equitable title (the "OWNED REALTY").
The Company holds no leasehold interests in any real property.
(b) The Company is the sole owner of the Owned Realty free and clear of any
lien, claim, charge, encumbrance, pledge, easement, encroachment, security
interest or restriction on transfer or title ("ENCUMBRANCES"), including, rights
of first refusal, except (i) as set forth in Section 4.15 of the Company
Disclosure Schedule; (ii) mechanics', carriers', workers', repairmen's or other
like liens arising or incurred in the ordinary course of business, and liens for
taxes, assessments and other governmental charges, which as to any thereof are
not yet due and payable; (iii) zoning, building and other similar restrictions,
provided that the existing buildings and other improvements on the real property
do not violate such restrictions; and (iv) those Encumbrances that, individually
or in the aggregate, do not materially adversely affect the marketability of the
title to or the present use (or any proposed use currently contemplated by the
Company), or materially impair the value, of the property subject thereto or
otherwise impair the operation of the Company's business as now conducted or
proposed to be conducted
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(collectively, the items in clauses (ii), (iii) and (iv), the "Permitted
Liens"). Section 4.15 of the Company Disclosure Schedule sets forth a list of
all leases, subleases and rights of parties in possession (collectively,
"LEASES") to which the Owned Realty is subject. Each Lease may be terminated by
the Company upon no more than nine months' notice to the other parties thereto,
without penalty to, or the imposition of liability on, the Company or any of its
successors in interest.
SECTION 4.16 PERSONAL PROPERTY. Except as set forth in Section 4.16 of the
Company Disclosure Schedule, the Company or Subsidiary has good title to all
personal property reflected on the Company's balance sheet included in the
Company's Report on Form 10-Q for the nine-month period ended August 31, 1997
(the "August Balance Sheet") and all personal property acquired by the Company
or Subsidiary since the date of the August Balance Sheet (except such personal
property as has been disposed of in the ordinary course of business) free and
clear of any Encumbrances except Permitted Liens.
SECTION 4.17 CONTRACTS. Except as disclosed in the Filed SEC Documents, as
of the date hereof, there are no contracts or agreements that are of a nature
required to be filed as an exhibit under the Exchange Act and the rules and
regulations promulgated thereunder. The Company is not in violation of or in
default under any lease, permit, concession, franchise, license or any other
contract, agreement, arrangement or understanding to which it is a party or by
which it or any of its properties or assets is bound, except for violations or
defaults that individually or in the aggregate would not have a Company Material
Adverse Effect
SECTION 4.18 LABOR MATTERS. Except as described in Section 4.18 of the
Company Disclosure Schedule, the Company is not a party to any collective
bargaining agreement with any labor organization or other written contract
concerning employment, or to any affirmative action plan established pursuant to
any federal, state or local law or order of any governmental body or court, or
any binding oral contract concerning employment. Since November 30, 1996 (i)
there has not been, nor is there currently pending or, to the Company's
knowledge, threatened, any labor dispute between the Company and any labor
organization or any strike, slowdowns, jurisdictional disputes, work stoppage or
other similar organized disruptive labor activities involving the employees of
the Company generally and (ii) there has not been, nor is there currently in
progress, pending or, to the Company's knowledge, threatened, any union
organizing or election activities involving any employees of the Company. The
Company is in compliance in all material respects with all federal, state and
local laws regarding labor, employment and employment practices, conditions of
employment, occupational safety and health and wages and hours, including, any
bargaining or other obligations under the National Labor Relations Act. The
Company is not engaged in unfair labor practices, and there are no unfair labor
practice complaints pending or, to the Company's knowledge, threatened against
the Company, as the case may be, before the National Labor Relations Board or
otherwise.
SECTION 4.19 INVENTORIES. Inventories of raw materials, work in progress and
finished goods of the Company are in good condition and of a quality useable and
saleable in the ordinary course of business or have had appropriate financial
reserves established. All inventory disposed of by the Company since August 31,
1997 has been disposed of under terms consistent with past practices.
SECTION 4.20 INTELLECTUAL PROPERTY. The Company owns or has the right to use
all copyrights, trade names, trademarks, service marks, trade secrets, designs,
licenses, patents and other intellectual property rights (including pending
applications for any of the foregoing) (collectively referred to herein as
"INTELLECTUAL PROPERTY") material to the conduct of the business of the Company
taken as a whole. There is no claim presently pending, nor since August 31, 1997
has there been any claim made or, to the Company's knowledge, threatened, nor,
to the Company's knowledge, is there any basis for any valid claim, that (x) the
operations of the Company or any Company Subsidiary infringe upon or conflict
with the asserted rights of any other person in respect of any Intellectual
Property, or (y) any of such Intellectual Property is invalid or unenforceable.
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SECTION 4.21 OPINION OF FINANCIAL ADVISOR. The Company has received the
written opinion of BT Wolfensohn on the date of this Agreement to the effect
that the $23.00 in cash per share to be received by the holders of Shares in the
Offer is fair, from a financial point of view, to such holders other than Von
Roll.
SECTION 4.22 BROKERS. Except as described in Section 4.22 of the Company
Disclosure Schedule, no broker, finder or investment banker, including, any
officer, director, employee or affiliate of the Company, is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company. Prior to the date of this Agreement, the Company has
made available to Parent a true, correct and complete copy of all agreements
between the Company and any such firm or person, pursuant to which such firm or
person will be entitled to any payment relating to the transactions contemplated
by this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub hereby jointly and severally represent and warrant to the
Company that:
SECTION 5.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of Parent
and Sub is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization and has
all requisite power and authority to own, lease and operate its properties and
to carry on its business as it is now being conducted and Parent is duly
qualified and in good standing to do business in each jurisdiction in which the
nature of the business conducted by it or the ownership or leasing of its
properties makes such qualification necessary, other than where the failure to
be so duly qualified and in good standing would not have a Parent Material
Adverse Effect. The term "PARENT MATERIAL ADVERSE EFFECT," as used in this
Agreement, shall mean any change or effect that, individually or when taken
together with all such other changes or effects, would be materially adverse to
the financial condition, business or operations of Parent and Sub, taken as a
whole, at the time of such change or effect.
SECTION 5.02 CERTIFICATE OF INCORPORATION AND BY-LAWS. Parent has furnished
to the Company a true, correct and complete copy of the Certificates of
Incorporation and the By-Laws, as amended or restated, of each of Parent and
Sub. Neither Parent nor Sub is in violation of any of the provisions of its
Certificate of Incorporation or By-Laws.
SECTION 5.03 AUTHORITY. Parent and Sub have all requisite corporate power
and corporate authority to execute and deliver this Agreement, to perform their
respective obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Parent and Sub and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action and no other corporate proceedings on the part
of Parent or Sub are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Parent and Sub and, assuming the due authorization, execution and
delivery thereof by the Company, constitutes the valid and binding obligation of
each of Parent and Sub, enforceable against Parent and Sub in accordance with
its terms, except that (a) such enforcement may be subject to any bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other laws, now
or hereafter in effect, relating to or limiting creditors' rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefore may be brought.
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SECTION 5.04 NO CONFLICT: REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by Parent and Sub do not,
and the performance of this Agreement by Parent and Sub will not, (i) conflict
with or violate the Certificate of Incorporation or By-Laws, in each case as
amended or restated, of Parent or Sub, (ii) conflict with or violate any Laws
applicable to Parent or Sub by which any of their respective properties is bound
or (iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any of the properties or assets of
Parent or Sub pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or Sub is a party or by which Parent or Sub or any of their
respective properties is bound or subject to, except for any such breach,
default, event, right of termination, amendment, acceleration or cancellation or
lien or encumbrance described in clause (iii) that would not have a Parent
Material Adverse Effect.
(b) The execution and delivery of this Agreement by Parent and Sub do not,
and the performance of this Agreement by Parent and Sub will not, as of the date
of this Agreement, require Parent or Sub to obtain any consent, approval,
authorization or permit of, or to make any filing with or notification to, any
Governmental Entities or third parties, except (i) for applicable requirements,
if any, of the Securities Act, the Exchange Act, Blue Sky Laws, the NASD, ISRA
and the HSR Act, and the filing and recordation of a Certificate of Merger as
required by the DGCL and (ii) the consents, approvals, authorizations, permits,
filings and notifications, if any, set forth in Section 5.04 of the disclosure
schedule attached hereto and made a part hereof (the "PARENT DISCLOSURE
SCHEDULE").
SECTION 5.05. INFORMATION SUPPLIED. None of the information supplied or to
be supplied by Parent or Sub specifically for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
Information Statement or (iv) the Proxy Statement will, in the case of the Offer
Documents, the Schedule 14D-9 and the Information Statement, at the respective
times the Offer Documents, the Schedule 14D-9 and the Information Statement are
filed with the SEC or first published, sent or given to the Company's
stockholders, or, in the case of the Proxy Statement, at the time the Proxy
Statement is first mailed to the Company's stockholders or at the time of the
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Offer Documents will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder, except that (other than with respect to the Proxy Statement) no
representation or warranty is made by Parent or Sub with respect to statements
made or incorporated by reference therein based on information supplied by the
Company specifically for inclusion or incorporation by reference therein.
SECTION 5.06. BROKERS. No broker, investment banker, financial advisor or
other person, other than Merrill Lynch & Co., Inc., the fees and expenses of
which will be paid by Parent, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent or Sub.
SECTION 5.07. INTERESTED STOCKHOLDER. Neither Parent nor any of its
"affiliates" or "associates" within the meaning of Section 203 of the DGCL is or
has been an "interested stockholder" of the Company within the meaning of said
Section 203.
SECTION 5.08. FINANCING. At the expiration of the Offer and the Effective
Time, Parent and Sub will have available all the funds necessary for the
acquisition of all Shares pursuant to the Offer and to perform their respective
obligations under this Agreement, including without limitation, payment in full
for all Shares validly tendered into the Offer or outstanding at the Effective
Time, repayment in full of the Company's indebtedness to Von Roll as referred to
in Section 1.01(c), and effecting the release of the Tube City Guarantee.
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ARTICLE VI
COVENANTS
SECTION 6.01 AFFIRMATIVE COVENANTS OF THE COMPANY. The Company hereby
covenants and agrees that, prior to the Effective Time, unless otherwise
expressly contemplated by this Agreement or consented to in writing by Parent,
the Company will, and will cause Subsidiary, to:
(a) operate its business only in the usual and ordinary course consistent
with past practices;
(b) preserve intact its business organizations, maintain its rights and
franchises, use its best efforts to retain the services of its respective
officers and key employees and maintain its relationships and goodwill with its
respective customers and suppliers and others with which it has business
relationships;
(c) maintain and keep its properties and assets in as good repair and
condition as at present, ordinary wear and tear excepted, and maintain
inventories in quantities consistent with its customary business practice; and
(d) keep in full force and effect insurance and bonds comparable in amount
and scope of coverage to that maintained on the date hereof.
SECTION 6.02 NEGATIVE COVENANTS OF THE COMPANY. Except as expressly
contemplated by this Agreement and except as set forth in Section 6.02 of the
Company Disclosure Schedule, or otherwise consented to in writing by Parent,
from the date of this Agreement until the Effective Time, the Company will not
do, and will not permit Subsidiary to do, any of the following:
(a) (1) increase the compensation payable to or to become payable to any
director, officer or employee (other than increases to employees, other than
officers, made in the ordinary course of business and consistent with past
practice); (ii) grant any severance or termination of pay (other than pursuant
to the normal severance policy of the Company as in effect on the date of this
Agreement) to, or enter into any employment or severance agreement with, any
director, officer or employee; (iii) establish, adopt, enter into or amend any
employee benefit plan or arrangement except as may be required by applicable
law; or (iv) lend or contribute any funds to any director, officer, employee,
affiliate or associate of the Company;
(b) declare or pay any dividend on, or make any other distribution in
respect of, outstanding shares of capital stock;
(c) (i) redeem, purchase or otherwise acquire any shares of its or any
securities or obligations convertible into or exchangeable for any shares of its
capital stock, or any options, warrants or conversion or other rights to acquire
any shares of its capital stock or any such securities or obligations; (ii)
effect any reorganization or recapitalization; or (iii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for, shares of its capital stock;
(d) (i) issue, deliver, award, grant or sell, or authorize or propose the
issuance, delivery, award, grant or sale (including the grant of any security
interest, liens, claims, pledges, limitations in voting rights, charges or other
encumbrances) of, any shares of any class of its capital stock (including shares
held in treasury), any securities convertible into or exercisable or
exchangeable for any such shares, or any rights, warrants or options to acquire,
any such shares, other than the issuance of shares pursuant to the exercise of
Stock Options granted prior to the date hereof; or (ii) amend or otherwise
modify the terms of any such rights, warrants or options the effect of which
shall be to make such terms more favorable to the holders thereof; (provided
however, the Company may take action to accelerate the vesting of outstanding
stock options);
(e) (i) acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or by any other
manner, any business or any corporation, partnership,
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association or other business organization or division thereof, or (ii)
otherwise acquire or agree to acquire any assets of any other person (other than
the purchase of assets from suppliers or vendors in the ordinary course of
business and consistent with past practice);
(f) sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose
of, or agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise
dispose of, any of its assets or any assets of Subsidiary, except for
dispositions of inventories and of assets in the ordinary course of business and
consistent with past practice;
(g) release any third party from its obligations under any existing
standstill relating to a Competing Transaction or otherwise under
confidentiality agreements;
(h) propose or adopt any amendments to its Certificate of Incorporation or
By-Laws;
(i) (A) change any of its methods of accounting in effect at August 31,
1997, or (B) make or rescind any express or deemed election relating to taxes,
settle or compromise any claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to taxes, or change
any of its methods of reporting income or deductions for federal income tax
purposes from those employed in the preparation of the federal income tax
returns for the taxable year ending November 30, 1996, except, in the case of
clause (A) or clause (B), as may be required by law or changes in GAAP;
(j) incur any obligation for borrowed money or purchase money indebtedness,
whether or not evidenced by a note, bond, debenture or similar instrument (other
than Company Debt incurred in the ordinary course of business (including
previously budgeted capital expenditures), which at November 30, 1997 (but not
thereafter) shall not exceed $32 million exclusive of any amount required to
fund a settlement of the NJDEP/PIRG litigation, if such shall occur prior to
November 30, 1997);
(k) enter into any arrangement, agreement or contract with any third party
(other than customers or suppliers in the ordinary course of business) which
provides for an exclusive arrangement with that third party or is more
restrictive on the Company or less advantageous to the Company than
arrangements, agreements or contracts existing on the date hereof;
(l) agree in writing or otherwise to do any of the foregoing.
SECTION 6.03 ACCESS AND INFORMATION. Subject to Section 6.04, the Company
shall (i) afford to Parent and its officers, directors, employees, accountants,
consultants, legal counsel, agents and other representatives (collectively, the
"PARENT Representatives") access at reasonable times to the officers, employees,
agents, properties, offices and other facilities of the Company and to the books
and records thereof and (ii) furnish promptly to Parent and the Parent
Representatives such information concerning the business, properties, contracts,
records and personnel of the Company (including, financial, operating and other
data and information) as may be requested, from time to time, by Parent.
SECTION 6.04 CONFIDENTIALITY. The parties will comply with all of their
respective obligations under the Confidentiality Agreement dated September 9,
1997 between Parent and the Company (the "CONFIDENTIALITY AGREEMENT").
SECTION 6.05 NOTIFICATION OF CERTAIN MATTERS. Parent shall give prompt
notice to the Company, and the Company shall give prompt notice to Parent, of
(i) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which would be likely to cause (x) any representation or
warranty contained in this Agreement to be untrue or inaccurate or (y) any
covenant, condition or agreement contained in this Agreement not to be complied
with or satisfied and (ii) any failure of Parent or the Company, as the case may
be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; PROVIDED, HOWEVER, that the delivery
of any notice pursuant to this Section 6.05 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
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ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. STOCKHOLDER APPROVAL; PREPARATION OF PROXY STATEMENT. (a) If
Shares are purchased pursuant to the Offer and the Company Stockholder Approval
is required by law, the Company shall, as soon as practicable following the
expiration of the Offer, duly call, give notice of, convene and hold a meeting
of its stockholders (the "Stockholders Meeting") for the purpose of obtaining
the Company Stockholder Approval. Subject to Section 7.07 hereof, the Company
shall, through its Board of Directors, recommend to its stockholders that the
Company Stockholder Approval be given. Notwithstanding the foregoing, if Sub or
any other subsidiary of Parent shall acquire at least 90% of the outstanding
Shares, the parties shall take all necessary and appropriate action to cause the
Merger to become effective as soon as practicable after the expiration of the
Offer without a Stockholders Meeting in accordance with Section 253 of the DGCL.
(b) If the Company Stockholder Approval is required by law, the Company
shall, as soon as practicable following the expiration of the Offer, prepare and
file a preliminary Proxy Statement with the SEC and shall use its best efforts
to respond to any comments of the SEC or its staff and to cause the Proxy
Statement to be mailed to the Company's stockholders as promptly as practicable
after responding to all such comments to the satisfaction of the staff. The
Company shall notify Parent promptly of the receipt of any comments from the SEC
or its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and will supply
Parent with copies of all correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff, on the other hand,
with respect to the Proxy Statement or the Merger. If at any time prior to the
Stockholders Meeting there shall occur any event that should be set forth in an
amendment or supplement to the Proxy Statement, the Company shall promptly
prepare and mail to its stockholders such an amendment or supplement.
(c) Parent agrees to cause all Shares purchased pursuant to the Offer and
all other Shares owned by Parent or any subsidiary of Parent to be voted in
favor of the Company Stockholder Approval.
SECTION 7.02. INDEMNIFICATION.
(a) From and after the consummation of the Offer, the Surviving Corporation
will, and Parent will use its best efforts to cause the Surviving Corporation
to, fulfill and honor in all respects the obligations of the Company pursuant to
(i) each indemnification agreement in effect at such time between the Company
and each person who is or was a director or officer of the Company at or prior
to the Effective Time and (ii) any indemnification provisions under the
Company's Certificate of Incorporation or By-laws as each is in effect on the
date hereof (the persons to be indemnified pursuant to the agreements or
provisions referred to in clauses (i) and (ii) of this Section 7.02(a) shall be
referred to as, collectively, the "Indemnified Parties"). The Certificate of
Incorporation and By-laws of the Surviving Corporation shall contain the
provisions with respect to indemnification and exculpation from liability set
forth in the Company's Certificate of Incorporation and By-laws on the date of
this Agreement, which provisions shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder of any Indemnified Party. Without
limiting the foregoing, after the Effective Time the Surviving Corporation shall
pay all reasonable out-of-pocket fees and expenses, including reasonable legal
fees, for the Indemnified Parties incurred with respect to the foregoing to the
fullest extent permitted under applicable law promptly after statements therefor
are received by the Surviving Corporation; PROVIDED the person on whose behalf
the expenses are paid provides an undertaking to repay such payments if it is
ultimately determined that such person is not entitled to indemnification.
Parent will cause the Surviving Corporation to maintain for not less than six
years from the Effective Time, directors' and officers' liability insurance
covering the Indemnified Parties who are presently covered by the Company's
directors' and officers' liability insurance or will be so covered
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at the Effective Time with respect to actions and omissions occurring on or
prior to the Effective Time on terms no less favorable to the Indemnified
Parties than such insurance maintained in effect by the Company on the date
hereof in terms of coverage and amount; PROVIDED, that to the extent such
coverage is not obtainable at less than per annum premiums in the amount of
$175,000 for such insurance, Parent shall cause the Surviving Corporation to
purchase so much coverage as may then be obtained for $175,000 per annum.
(b) This Section 7.02 shall survive the consummation of the Merger at the
Effective Time, is intended to be for the benefit of, and enforceable by, the
Company, Parent, the Surviving Corporation and each Indemnified Party and such
Indemnified Party's heirs and representatives, and shall be binding on all
successors and assigns of Parent and the Surviving Corporation.
(c) Notwithstanding anything to the contrary contained in this Agreement,
from and after the date hereof, the Company may enter into indemnification
agreements, or amended existing indemnification agreements, with current
directors and officers of the Company providing for customary provisions under
Delaware law.
7.03 REASONABLE EFFORTS. The Company and Parent shall each use their
reasonable efforts to (i) take, or cause to be taken, all appropriate action,
and do, or cause to be done, all things necessary, proper or advisable under
applicable law or otherwise to consummate and make effective the transactions
contemplated by this Agreement, (ii) obtain from any Governmental Entities or
third parties any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained or made by Parent or the
Company or any of their Subsidiaries in connection with the authorization,
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein, including, the Merger, and (iii) make all
necessary filings, and thereafter make any other required submissions, with
respect to this Agreement and the Merger, required under (A) the Exchange Act
and the rules and regulations thereunder, and any other applicable federal or
state securities laws, (B) the HSR Act and (C) any other applicable law;
PROVIDED that Parent and the Company shall cooperate with each other in
connection with the making of all such filings, including providing copies of
all such documents to the nonfiling party and its advisors prior to filing and,
if requested, to accept all reasonable additions, deletions or changes suggested
in connection therewith. The Company and Parent shall furnish all information
required for any application or other filing to be made pursuant to the rules
and regulations of any applicable Law (including all information required to be
included in the Proxy Statement, if required) in connection with the
transactions contemplated by this Agreement.
SECTION 7.04 STOCK OPTIONS. The Company shall use its best efforts to obtain
the agreement of each holder of an employee stock option granted under the
Company's Stock Plans (whether or not exercisable) outstanding as of the date of
this Agreement, for the cancellation and settlement of such option as of the
Effective Time in consideration of the payment by Parent or Sub, as the case may
be, to such option holder of a dollar amount for each share of Company Common
Stock subject to such option equal to the Merger Consideration payable in
respect of a share of Company Common Stock less the applicable exercise price
per share of such option due and payable as of the Effective Time. All such
payments to optionees shall be subject to applicable withholding taxes. At or
immediately prior to the Closing, Parent or Sub, as the case may be, shall
deposit or cause to be deposited with the Paying Agent in trust for the benefit
of such option holders the cash necessary to allow the Paying Agent to pay the
amounts due under this Section 7.04 as of the Effective Time.
SECTION 7.05 ISRA. The Company will comply with applicable requirements of
ISRA in connection with the transactions contemplated by this Agreement, and the
Company will bear all costs associated therewith until such time as all ISRA
requirements have been satisfied and evidenced by documentation from the New
Jersey Department of Environmental Protection ("NJDEP"). If required, such
compliance will include: (i) obtaining NJDEP approval of a negative declaration
or approval and implementation of a remedial action work plan to the
satisfaction of NJDEP, or entry into a remediation agreement with
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NJDEP and (ii) furnishing any remediation funding source required by NJDEP.
Prior to taking or omitting any action with respect to compliance with
applicable requirements of ISRA (including, but not limited to, submitting any
required document to NJDEP), the Company shall notify Parent and provide Parent
with an opportunity to consult with and to inform the Company as to the
reasonableness of its actions or omissions; PROVIDED, HOWEVER, that the Company
shall not, on or prior to the Effective Time, take or omit any such action, the
result of which would be to bind or commit the Surviving Corporation after the
Effective Time, without the prior written consent of Parent (except that Parent
shall not unreasonably withhold its consent to the Company's entering into a
customary remediation agreement with the NJDEP providing for remediation
following the Effective Time).
SECTION 7.06 COMPANY DEBT. Parent shall provide or cause to be provided to
the Company on a timely basis in connection with the transactions contemplated
hereby substitute working capital financing and funds or financing sufficient to
repay in full the Company Debt as provided in Section 1.01(b) hereof, shall
cause the Company at or prior to the Effective Time to repay in full its
indebtedness to Von Roll Holding AG and shall obtain the release of Von Roll
from the Tube City Guarantee.
SECTION 7.07 NO SOLICITATION. (a) The Company shall not, nor shall it
authorize or permit any of its officers, directors or employees or any
investment banker, financial advisor, attorney, accountant or other
representative or agent retained by it or any subsidiary to, directly or
indirectly, (i) solicit, initiate or knowingly encourage the submission of any
Takeover Proposal (as defined below) or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any nonpublic information with
respect to, or taken any other action designed or reasonably likely to
facilitate any inquiries or the making of any proposal that constitutes any
Takeover Proposal; provided, however, that if, at any time prior to the
acceptance for payment of Shares pursuant to the Offer, the Board of Directors
of the Company determines in good faith, after consultation with outside
counsel, that it is reasonably advisable to do so in order to comply with its
fiduciary duties to the Company's stockholders under applicable law, the Company
may, in response to a Takeover Proposal which was not solicited subsequent to
the date hereof, and subject to compliance with Section 7.07(c), (x) furnish
information with respect to the Company to any person pursuant to a customary
confidentiality agreement and (y) participate in discussions and negotiations
regarding such Takeover Proposal. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the preceding
sentence by any director, officer or employee of the Company or any of its
subsidiaries or any investment banker, financial advisor, attorney, account or
other representative or agent of the Company or any of its subsidiaries shall be
deemed to be a breach of this Section 7.07(a) by the Company. For purposes of
this Agreement, "TAKEOVER PROPOSAL" means any inquiry, proposal or offer from
any person relating to any direct or indirect acquisition or purchase of a
substantial amount of assets of the Company and its subsidiaries, taken as a
whole (other than the purchase of the Company's products in the ordinary course
of business), or more than 40% interest in the total voting securities of the
Company or any of its subsidiaries or any tender offer or exchange offer that if
consummated would result in any person beneficially owing 40% or more of any
class of equity securities of the Company or any of its subsidiaries or any
merger, consolidation, business combination, sale of substantially all assets,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its subsidiaries, other than the transactions contemplated by
this Agreement.
(b) Except as set forth in this Section 7.07 neither the Board of Directors
of the Company nor any committee thereof shall (i) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Parent, the approval or
recommendation by such Board of Directors or such committee of the Offer, the
Merger or this Agreement, (ii) approve or recommend, or propose publicly to
approve or recommend, any Takeover Proposal or (iii) cause the Company to enter
into any letter of intent, agreement in principle, acquisition agreement or
other similar agreement (each, an "Acquisition Agreement") related to any
Takeover Proposal. Notwithstanding the foregoing, in the event that prior to the
acceptance for payment of Shares pursuant to the Offer the Board of Directors of
the Company determines in good faith, after consultation with outside counsel,
that it is reasonably advisable to do so in order to comply with its
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fiduciary duties to the Company's stockholders under applicable law, the Board
of Directors of the Company may, in response to an unsolicited Superior Proposal
(as defined below) (subject to the following proviso), (x) withdraw or modify
its approval or recommendation of the Offer, the Merger or this Agreement or (y)
approve or recommend any such Superior Proposal if concurrently with such
approval or recommendation the Company terminates this Agreement and enters into
an Acquisition Agreement with respect to a Superior Proposal; provided, that in
the case of this clause (y), only at a time that is after the later of (i) the
third business day following Parent's receipt of written notice advising Parent
that the Board of Directors of the Company has received a Superior Proposal,
specifying the material terms of such Superior Proposal and identifying the
person making such Superior Proposal and (ii) in the event of any amendment to
the price or any material term of a Superior Proposal, one business day
following Parent's receipt of written notice containing the material terms of
such amendment, including any change in price (it being understood that each
further amendment to the price or any material terms of a Superior Proposal
shall necessitate an additional written notice to Parent and an additional one
business day period prior to which the Company can take the actions set forth in
clause (y) above.). For purposes of this Agreement, a "SUPERIOR PROPOSAL" means
any bona fide Takeover Proposal made by a third party (i) that is on terms which
the Board of Directors of the Company determines in its good faith judgment
(based on consultation with the Company's financial advisor) to be more
favorable to the Company's stockholders than the Offer and the Merger and (ii)
for which financing, to the extent required, is then committed or which, in the
good faith judgment of the Board of Directors of the Company, is capable of
being obtained by such third party.
(c) In addition to the obligations of the Company set forth in paragraphs
(a) and (b) of this Section 7.07, the Company shall promptly advise Parent
orally and in writing of any request for nonpublic information (except in the
ordinary course of business and not in connection with a possible Takeover
Proposal) or of any Takeover Proposal known to it, the material terms and
conditions of such request or Takeover Proposal and the identity of the person
making such request or Takeover Proposal. The Company will promptly inform
Parent of any material change in the details (including amendments or proposed
amendments) of any such request or Takeover Proposal.
(d) Nothing contained in this Agreement shall prohibit the Company from
taking and disclosing to its stockholders a position contemplated by Rule 14d-9
or Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to the Company's stockholders if, in the good faith judgment of the
Board of Directors of the Company, after consultation with outside counsel,
failure so to disclose would be inconsistent with applicable law; PROVIDED,
HOWEVER, neither the Company nor its Board of Directors nor any committee
thereof shall, except as permitted by this Section 7.07, withdraw or modify, or
propose to withdraw or modify, its position with respect to the Offer, the
Merger or this Agreement or approve or recommend, or propose to approve or
recommend, a Takeover Proposal.
SECTION 7.08 (A) FEES AND EXPENSES. Except as provided below in this Section
7.08, all fees and expenses in connection with the Offer, the Merger, this
Agreement and the transactions contemplated hereby shall be borne solely and
entirely by the party incurring such fees and expenses, whether or not the Offer
or the Merger are consummated.
(b) The Company shall pay, or cause to be paid, to Parent the amount of
$5,000,000 (the "Termination Fee") under the circumstances and at the times set
forth as follows:
(i) if the Company terminates this Agreement under Section 9.01(e), the
Company shall pay 50% of the Termination Fee simultaneously with such
termination, and 50% of the Termination Fee upon consummation of the
transactions contemplated by the Superior Proposal giving rise to the
Company's right to terminate this Agreement under Section 9.01(e), or upon
the earlier consummation of another Company Acquisition (as defined in
paragraph 7.08(c) below) provided that such other Company Acquisition is
consummated within twelve months following termination of this Agreement;
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(ii) if Parent or Sub terminates this Agreement under Section 9.01(d)
and in addition, if within twelve months after such termination the Company
shall enter into an Acquisition Agreement providing for a Company
Acquisition or the Company shall recommend to its stockholders that they
accept a Company Acquisition of the type referred to in Section
7.08(c)(iii), the Company shall pay (A) 50% of the Termination Fee
simultaneously with the entering into of such Acquisition Agreement of
making of such recommendation and (B) 50% of the Termination Fee upon
consummation of the Company Acquisition which was the subject of such
Acquisition Agreement or recommendation, or upon the consummation, prior to
the expiration of such twelve month period, of any other Company Acquisition
(it being understood that if any Company Acquisition shall be consummated
within such twelve month period and the Company shall not have paid any
amount pursuant to clause (A) above, that upon consummation of such Company
Acquisition the Company shall pay 100% of the Termination Fee); and
(iii) if, at the time of any termination of this Agreement pursuant to
Section 9.01(b)(i) (as a result of a failure to obtain the Minimum
Condition) or Section 9.01(c), any person shall have publicly announced a
proposal to effect a Company Acquisition and if, within twelve months after
such termination, the Company shall enter into an Acquisition Agreement
providing for a Company Acquisition or the Company shall recommend to its
stockholders that they accept a Company Acquisition of the type referred to
in Section 7.08(c)(iii), the Company shall pay (A) 50% of the Termination
Fee simultaneously with the entering into of such Acquisition Agreement or
making of such recommendation and (B) 50% of the Termination Fee upon
consummation of the Company Acquisition which was the subject of such
Acquisition Agreement or recommendation, or upon the consummation, prior to
the expiration of such twelve month period, of any other Company Acquisition
(it being understood that if any Company Acquisition shall be consummated
within such twelve month period and the Company shall not have paid any
amount pursuant to clause (A) above, that upon consummation of such Company
Acquisition the Company shall pay 100% of the Termination Fee.
(c) For purposes of this Agreement a "COMPANY ACQUISITION" shall mean any of
the following transactions (i) a merger, consolidation, business combination or
a recapitalization pursuant to which the stockholders of the Company immediately
preceding such transaction hold less than 60% of the equity interests in the
surviving or resulting entity of such transaction (other than the transactions
contemplated by this Agreement); (ii) a sale by the Company of assets (excluding
the sale of the Company's products in the ordinary course of business)
representing in excess of 40% of the fair market value of the Company
immediately prior to such sale or the issuance by the Company to any person or
group of shares representing in excess of 40% of the then outstanding shares of
capital stock of the Company (other than in connection with an underwritten
public offering); or (iii) the acquisition by any person or group, by way of a
tender offer, exchange offer, or by way of open market purchases of beneficial
ownership of 40% or more of the then outstanding shares of capital stock of the
Company.
SECTION 7.09 PUBLIC ANNOUNCEMENTS. Unless otherwise required by applicable
law, Parent and the Company shall consult with each other before issuing any
press release or otherwise making any public statement with respect to the
Merger and shall not issue any such press release or make any such public
statement prior to such consultation.
ARTICLE VIII
CLOSING CONDITIONS
SECTION 8.01 CONDITIONS OF OBLIGATIONS OF EACH PARTY UNDER THIS AGREEMENT.
The respective obligation of each party to effect the Merger shall be subject to
the satisfaction or waiver prior to the Closing Date of the following
conditions:
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(a) Company Stockholder Approval. If required by applicable law, the Company
Stockholder Approval shall have been obtained.
(b) No Injunctions or Restraints. No statute, rule, regulation, executive
order, decree, temporary restraining order, preliminary or permanent injunction
or other order issued by any court of competent jurisdiction or other
Governmental Entity or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; PROVIDED, HOWEVER, that each of
the parties shall have used reasonable efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any injunction
or other order that may be entered.
(c) Purchase of Shares. Sub shall have previously accepted for payment and
paid for Shares pursuant to the Offer.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01. TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of the terms of
this Agreement by the stockholders of the Company (provided, however, that if
Shares are purchased pursuant to the Offer, neither Parent nor Sub may in any
event terminate this Agreement):
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if Sub shall not have accepted for payment and Shares pursuant to
the Offer prior to May 5, 1998; provided, however, that the right to
terminate this Agreement pursuant to this Section 9.01(b)(i) shall not be
available to (1) Parent, if Sub shall have breached its obligations under
the second to the last sentence of Section 1.01(a) or (2) any party whose
failure to perform any of its obligations under this Agreement results in
the failure of any such condition or if the failure of such condition
results from facts or circumstances that constitute a willful breach of
representation or warranty under this Agreement by such party; or
(ii) if any Governmental Entity shall have issued an order, decree or
ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the acceptance for payment of, or payment for, Shares
pursuant to the Offer or the Merger and such order, decree or ruling or
other action shall have become final and nonappealable;
(c) by Parent or Sub prior to the purchase of Shares pursuant to the Offer
in the event of a breach or failure to perform by the Company of any
representation, warranty, covenant or other agreement contained in this
Agreement which (i) would give rise to the failure of a condition set forth in
paragraph (e) or (f) of Exhibit A and (ii) cannot be or has not been cured
within 30 days after the giving of written notice to the Company;
(d) by Parent or Sub if either Parent or Sub is entitled to terminate the
Offer as a result of the occurrence of any event set forth in paragraph (d) of
Exhibit A to this Agreement;
(e) by the Company in accordance with Section 7.07(b), provided that it has
complied with all provisions thereof, including the notice provisions therein,
and that it complies with applicable requirements relating to the payment
(including the timing of any payment) of the Termination Fee as provided in
Section 7.08 (it being understood that that, as provided in Section 7.07(b), the
Company will be required to terminate this Agreement); or
(f) by the Company in the event of a material breach or failure to perform
in any material respect by Parent or Sub of any representation, warranty,
covenant or other agreement contained in this Agreement which cannot be or has
not been cured within 30 days after the giving of written notice to Parent and
Sub.
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SECTION 9.02. EFFECT OF TERMINATION. In the event of a termination of this
Agreement by either the Company or Parent or Sub as provided in Section 9.01,
this Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Sub or the Company or their respective
officers or directors, except with respect to the last sentence of Section
1.02(c), Section 4.18, Section 5.05, the last sentence of Section 7.02, Section
7.06, this Section 9.02 and Article X; provided, however, that nothing herein
shall relieve any party for liability for any willful breach hereof.
SECTION 9.03. AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto, duly
authorized by action taken at any time before or after obtaining the Company
Stockholder Approval. After the purchase of Shares pursuant to the Offer, no
amendment shall be made which decreases the Merger Consideration. After the
Company Stockholder Approval, no amendment shall be made which by law requires
further approval by such stockholders without obtaining such further approval.
Prior to the Effective Time, the written consent of Von Roll shall be required
to (i) amend or terminate this Agreement, (ii) exercise or waive any of the
Company's rights or remedies under this Agreement, (iii) extend the time for
performance of Parent and Sub's obligations under this Agreement or (iv) take
any action to amend or otherwise modify the Company's Certificate of
Incorporation or By-laws in violation of Section 7.07 hereof.
SECTION 9.04. EXTENSION; WAIVER. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective Boards of
Directors, may, to the extent legally allowed, subject to Section 9.03, (i)
extend the time for the performance of any of the obligations or other acts of
the other parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto or
(iii) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in a written instrument signed on behalf
of such party. The failure of any party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of those
rights.
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ARTICLE X
GENERAL PROVISIONS
SECTION 10.01. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective Time
or, in the case of the Company, shall survive the acceptance for payment of, and
payment for, Shares by Sub pursuant to the Offer. This Section 10.01 shall not
limit any covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time, including Section 7.02.
SECTION 10.02 NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered, mailed or transmitted, and shall be effective
upon receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or sent by electronic transmission to the telecopier number
specified below:
(a) If to Parent or Sub:
Co-Steel Inc.
Scotia Plaza
40 King Street West
Toronto, Ontario
Canada M5H 3Y2
Attention: President
Telecopy: 416 366 4616
with copies to:
Goodman Phillips & Vineberg
250 Yonge Street
Toronto, Ontario
Canada M5B 2M6
Attention: Lorie Waisberg, Esq.
Telecopy: 416 979 1234
Wilentz Goldman & Spitzer
90 Woodbridge Center Drive
Woodbridge, NJ 07095
Attention: C. Kenneth Shank, Esq.
Telecopy: 908 855 6117
(b) If to the Company:
New Jersey Steel Corporation
North Crossman Road
Sayreville, New Jersey 08872
Attention: Mr. Gary Giovannetti
Telecopier No.: 732 721 8933
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<PAGE>
with a copy to:
Jacobs Persinger & Parker
77 Water Street
New York New York 10005
Attention: Walter H. Beebe, Esq.
Telecopier No.: 212 742 0938
(b) If to Von Roll:
Von Roll Holding AG
CH-4563 Gerlafingen
Switzerland
Attention: Mr. H. Georg Hahnloser
Telecopy: 011-416-534-2208
with a copy to:
Jacobs Persinger & Parker
77 Water Street
New York New York 10005
Attention: Walter H. Beebe, Esq.
Telecopier No.: 212 742 0938
SECTION 10.03 INTERPRETATION. When a reference is made in this Agreement to
an Article or a Section, such reference shall be to an Article or a Section of
this Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". The phrase "made
available" in this Agreement shall mean that the information referred to has
been made available if requested by the party to whom such information is to be
made available. As used in this Agreement, the term "subsidiary" of any person
means another person, an amount of the voting securities, other voting ownership
or voting partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if there are no
such voting interests, 50% or more of the equity interests of which) is owned
directly or indirectly by such first person.
SECTION 10.04 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.05 SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
SECTION 10.06 ENTIRE AGREEMENT. This Agreement (together with the Exhibits
attached hereto, the Company Disclosure Schedule and the Parent Disclosure
Schedule) and the Confidentiality Agreement constitute the entire agreement of
the parties and supersede all prior agreements and undertakings, both written
and oral, between the parties, or any of them, with respect to the subject
matter hereof
SECTION 10.07 ASSIGNMENT. Except as contemplated by Section 2.01 hereof,
this Agreement shall not be assigned by operation of law or otherwise.
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SECTION 10.08 PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and no provision of this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, except for the provisions of Section 6.7 (which are intended
to be for the benefit of the persons indicated therein and may be enforced by
such persons).
SECTION 10.09 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
SECTION 10.10 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law.
SECTION 10.11 COUNTERPARTS. This Agreement may be executed in counterparts,
and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
and Plan of Merger to be executed by their respective duly authorized officers
as of the date first written above.
<TABLE>
<S> <C> <C>
NEW JERSEY STEEL CORPORATION
By:
-----------------------------------------
Gary Giovannetti, PRESIDENT
VON ROLL HOLDING AG
By:
-----------------------------------------
H. Georg Hahnloser, CHIEF OPERATING
OFFICER
CO-STEEL INC.
By:
-----------------------------------------
Lew Hutchinson, PRESIDENT
CO-STEEL MERGER CORPORATION
BY:
-----------------------------------------
PRESIDENT
</TABLE>
30
<PAGE>
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or this Agreement, Sub shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Sub's obligation to pay for or return tendered Shares after the termination
or withdrawal of the Offer), to pay for any Shares tendered pursuant to the
Offer unless (i) there shall have been validly tendered and not withdrawn prior
to the expiration of the Offer such number of Shares that would constitute at
least 80% of the outstanding Shares (determined on a fully diluted basis for all
outstanding stock options and any other rights to acquire Shares that are or
would be vested prior to December 31, 1997)(the "Minimum Condition"), (ii) any
waiting period under the HSR Act applicable to the purchase of Shares pursuant
to the Offer shall have expired or been terminated and (iii) the requirements of
ISRA have been satisfied through a remediation agreement with the NJDEP as
contemplated by Section 7.05 or otherwise. Furthermore, Sub shall not be
required to accept for payment or, subject as aforesaid, to pay for any Shares
not theretofore accepted for payment or paid for, and may, in accordance with
Section 9.01, terminate this Agreement or amend the Offer with the consent of
the Company and Von Roll, if, upon the scheduled expiration date of the Offer
(as extended, if required, pursuant to the second to the last sentence of
Section 1.01(a)) and before the acceptance of such Shares for payment or the
payment therefor, any of the following conditions exists and is continuing and
does not result principally from the breach by Parent or Sub of any of their
obligations under this Agreement:
(a) there shall be instituted or pending by any Governmental Entity any
suit, action or proceeding (i) challenging the acquisition by Parent or Sub
of any Shares under the Offer, seeking to restrain or prohibit the making or
consummation of the Offer or the Merger, (ii) seeking to prohibit or
materially limit the ownership or operation by the Company, Parent or any of
Parent's subsidiaries of a material portion of the business or assets of the
Company or Parent and its subsidiaries, taken as a whole, or to compel the
Company or Parent to dispose of or hold separate any material portion of the
business or assets of the Company or Parent and its subsidiaries, taken as a
whole, in each case as a result of the Offer or the Merger or (iii) seeking
to impose material limitations on the ability of Parent or Sub to acquire or
hold, or exercise full rights of ownership of, any Shares to be accepted for
payment pursuant to the Offer including, the right to vote such Shares on
all matters properly presented to the stockholders of the Company or (iv)
seeking to prohibit Parent or any of its subsidiaries from effectively
controlling in any material respect any material portion of the business or
operations of the Company;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, by any Governmental Entity or court, other than the
application to the Offer or the Merger of ISRA and any applicable waiting
periods under the HSR Act, that would result in any of the consequences
referred to in clauses (i) through (iv) of paragraph (a) above;
(c) there shall have occurred any material adverse change with respect
to the Company since the date of this Agreement;
(d) the Board of Directors of the Company or any committee thereof shall
have withdrawn or modified in a manner adverse to Parent or Sub its approval
or recommendation of the Offer or the Merger or its adoption of this
Agreement, or approved or recommended any Takeover Proposal;
(e) any of the representations and warranties of the Company set forth
in this Agreement that are qualified as to materiality shall not be true and
correct or any such representations and warranties that are not so qualified
shall not be true and correct in any material respect, in each case at the
date of this Agreement and at the scheduled or extended expiration of the
Offer;
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<PAGE>
(f) the Company shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or material covenant of the Company to be performed or complied
with by it under this Agreement;
(g) Parent and Sub shall not have received a certificate of the
President or Chief Financial Officer of the Company dated the expiration
date of the Offer (i) that the representations and warranties of the Company
set forth in this Agreement that are qualified as to materiality are true
and correct as and at such date, (ii) that the representations and
warranties that are not so qualified are true and correct in any material
respect as and at such date, and that (iii) the Company has performed in all
material respects any material obligation and complied in all material
respect with any material agreement or material covenant of the Company to
be performed or complied with by it; or
(h) this Agreement shall have been terminated in accordance with its
terms;
which, in the good faith judgment of Parent or Sub, in its sole discretion, make
it inadvisable to proceed with such acceptance of Shares for payment or the
payment therefor.
Notwithstanding anything contained herein, (i) the conditions set forth in
clause (e) above shall be deemed not fulfilled only if the respects in which the
representations and warranties made by the Company (without giving effect to any
"materiality" limitations or references to "material adverse effect" set forth
therein) are inaccurate would have a material adverse effect on the Company, and
(ii) if the condition set forth in clause (f) is not fulfilled, Sub shall not be
obligated to purchase and pay for any Shares so long as such condition remains
unfulfilled, but Sub may not terminate the Offer due solely to such failure
until 30 days after it gives written notice to the Company of such
nonfulfillment and such nonfulfillment is not cured by the end of such 30-day
period.
The foregoing conditions are for the sole benefit of Parent and Sub and
(except for the Minimum Condition) may, subject to the terms of this Agreement,
be waived by Parent and Sub in whole or in part at any time and from time to
time in their sole discretion. The failure by Parent or Sub at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time. Terms used but not defined herein
shall have the meanings assigned to such terms in the Agreement to which this
Exhibit A is a part.
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<PAGE>
STOCKHOLDER AGREEMENT
This Stockholder Agreement (the "AGREEMENT") made as of this 21st day of
November, 1997, by and between CO-STEEL INC., a Canadian corporation ("BUYER"),
and VON ROLL HOLDING AG, a Swiss corporation (formerly, Von Roll AG,
"STOCKHOLDER").
WHEREAS, concurrently with the execution and delivery of this Agreement,
Buyer, CO-STEEL MERGER CORPORATION, a Delaware corporation and an indirect
wholly-owned subsidiary of Buyer ("MERGER SUB"), and NEW JERSEY STEEL
CORPORATION, a Delaware corporation (the "COMPANY"), are entering into a Tender
Offer Agreement and Agreement and Plan of Merger dated the date hereof (the
"TENDER AGREEMENT"), pursuant to which, among other things, Buyer is agreeing to
make a tender offer (the "OFFER") for all of the outstanding shares of common
stock, par value $.01 per share, of the Company (the "COMPANY COMMON STOCK") at
$23.00 per share (or such higher price as may be paid in the Offer) and
following the Offer, Merger Sub will be merged with and into the Company (the
"MERGER");
WHEREAS, as a result of the Offer and Merger, the Company will become an
indirect wholly-owned subsidiary of Buyer, and the Company Common Stock not
tendered to and purchased by Buyer in the Offer will be converted into the right
to receive in cash the per share price paid in the Offer, subject to the terms
and conditions of the Tender Agreement; and
WHEREAS, Stockholder is the record and ultimate beneficial owner of an
aggregate of 3,561,500 shares of Company Common Stock which it holds through its
VON ROLL STEEL HOLDING AG subsidiary;
NOW, THEREFORE, to induce Buyer to enter into the Tender Agreement and in
consideration of the aforesaid and the mutual representations, warranties,
covenants and agreements set forth herein and in the Tender Agreement, the
parties hereto agree as follows:
1. TENDER OF SHARES. Stockholder hereby agrees to validly tender (or cause
to be validly tendered), and not to withdraw, pursuant to and in accordance with
the terms of the Offer, not later than the fifth business day after commencement
of the Offer pursuant to Section 1.01 of the Tender Offer Agreement and Rule
14d-2 under the Exchange Act, all of the 3,561,500 shares of the Company owned
by it (and any shares acquired by Stockholder in any capacity after the date
hereof and prior to the termination of this Agreement by means of purchase,
dividend, distribution or in any other way, collectively, the "SHARES").
Stockholder hereby acknowledges and agrees that Buyer's obligation to accept for
payment and pay for the Shares in the Offer is subject to the terms and
conditions of the Offer.
2. SALE AND PURCHASE OTHER THAN PURSUANT TO OFFER In the event the Shares
are not purchased by Buyer pursuant to the Offer because the Offer is terminated
for any reason other than a failure of an Offer Condition (as defined in the
Tender Agreement) other than condition (d) thereof, Stockholder hereby agrees to
sell, transfer and convey the Shares to Buyer, and Buyer hereby agrees to
purchase, acquire and accept the Shares from Stockholder, at a purchase price of
$23.00 per share (the "PURCHASE PRICE"), all subject to the terms and conditions
of this Agreement. In addition, at the time of the purchase and sale of the
Shares pursuant to this Section 2, Buyer hereby agrees that it (i) will purchase
from Stockholder the outstanding subordinated loans to the Company held by
Stockholder made pursuant to that certain Credit Agreement dated June 6, 1996
between the Company and Stockholder, at the face amount thereof, plus all
interest accrued but unpaid to the date of such purchase, (ii) will thereafter
provide or cause to be provided to the Company on a timely basis substitute
working capital financing and financing sufficient to repay in full the
Company's obligations to PNC Bank under that certain Loan and Security Agreement
dated June 6, 1996, if required by said lender and (iii) will provide, or cause
the Company to provide, Tube City Inc. a substitute guarantee or otherwise act
with Von Roll to effectuate the prompt release of Von Roll from its August 21,
1996 guarantee to Tube City, Inc. (the "TUBE CITY GUARANTEE") without further
obligation or liability.
3. DELIVERY AND PAYMENT. The closing of the sale, transfer and conveyance of
the Shares and the subordinated obligations by Stockholder to Buyer pursuant to
Section 2. hereof (the "CLOSING") shall take place on the third business day
following the satisfaction or waiver of the conditions set forth in
<PAGE>
Sections 5 and 6 hereof at the offices of Wilentz, Goldman & Spitzer, 90
Woodbridge Center Drive, Woodbridge, NJ, or such other time or place as the
parties hereto may agree. The time and date of the closing is referred to herein
as the Closing Date. At the Closing, the following shall occur simultaneously:
(a) Stockholder shall deliver to Buyer stock certificates evidencing the
Shares, accompanied by stock powers duly endorsed by Stockholder in favor of
Buyer as transferee, with all signatures properly guaranteed and an assignment,
in form and substance reasonably satisfactory to Buyer, of the subordinated
obligations. Stockholder shall execute and deliver to Buyer a certificate which
states that all representations and warranties made by Stockholder in this
Agreement are true, correct and complete in all material respects as of the
Closing Date.
(b) Buyer shall deliver to Stockholder, as full payment for the Shares and
the subordinated obligations, by wire transfer in immediately available funds,
the Purchase Price multiplied by the aggregate number of Shares (the "AGGREGATE
PURCHASE PRICE") and a amount equal to the face amount of the subordinated
obligations, plus all interest accrued but unpaid to the Closing Date.
Notwithstanding the foregoing, Buyer shall deduct and withhold from the
Aggregate Purchase Price a tax equal to the amount specified in Section 1445 of
the Internal Revenue Code of 1986, as amended (the "CODE"), unless Stockholder
delivers to buyer, at or prior to the Closing, a certificate of the Company in
the form of Exhibit A attached hereto, executed by the President of the Company,
or otherwise establishes to Buyer's satisfaction that no withholding is required
pursuant to Section 1445 of the Code and the Treasury regulations promulgated
thereunder.
4. CONDITIONS PRECEDENT TO STOCKHOLDER'S OBLIGATION TO SELL PURSUANT TO
SECTION 2. Stockholder's obligation to sell the Shares and the subordinated
obligations on the Closing Date is subject to the satisfaction of the following
conditions, any or all of which, to the extent permitted by applicable law, may
be waived in writing by Stockholder:
(a) All representations and warranties of Buyer in this Agreement shall be
true, correct and complete in all material respects on and as of the Closing
Date as though such representations and warranties were made on and as of the
Closing Date;
(b) No injunction or order prohibiting the consummation of the transactions
contemplated by this Agreement shall be outstanding;
(c) All waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 (the "HSR") shall have expired or been terminated;
(d) a satisfactory remediation agreement shall have been entered into with
the NJDEP, or the requirements of the New Jersey Industrial Site Recovery Act
("ISRA") shall have otherwise been satisfied; and
(e) Buyer shall have performed and complied with all obligations under this
Agreement that are to be performed or complied with by Buyer prior to or on the
Closing Date.
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO PURCHASE PURSUANT TO
SECTION 2. Buyer's obligation to purchase the Shares on the Closing Date is
subject to the satisfaction of the following conditions, any or all of which, to
the extent permitted by applicable law, may be waived in writing by Buyer:
(a) All representations and warranties of Stockholder in this Agreement
shall be true, correct and complete in all material respects on and as of the
Closing Date as though such representations and warranties were made on and as
of the Closing Date;
(b) Stockholder shall have performed and complied with all obligations under
this Agreement that are to be performed or complied with by Stockholder prior to
or on the Closing Date;
(c) All waiting periods under the HSR shall have expired or been terminated;
2
<PAGE>
(d) a satisfactory remediation agreement shall have been entered into with
the NJDEP, or the requirements of ISRA shall have otherwise been satisfied; and
(e) Von Roll and the Company shall have terminated without further payment
by, or liability of the Company for, any termination, severance or similar fees,
(I) the Management and Technical Services Agreement between them and (II) the
employment by the Company of any Von Roll employees on an interim basis
(including the Chief Financial Officer); and
(f) The condition set forth in Section 8.01(b) of the Tender Agreement shall
have been satisfied or, to the extent permitted by applicable law, waived.
6. STOCKHOLDER'S REPRESENTATIONS AND WARRANTIES. In connection with a tender
pursuant to Section 1 above or a sale pursuant to Section 2 above, Stockholder
represents and warrants to Buyer as follows:
(a) Stockholder is a corporation duly organized, validly existing and in
good standing under the laws of Switzerland and has the corporate power and
corporate authority to enter into a perform its obligations under this
Agreement. Stockholder's execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and legally binding obligation of Stockholder enforceable
against Stockholder in accordance with its terms. Except as set forth in Section
4.04 of the Tender Agreement, the Company has taken all steps necessary to
approve and to irrevocably exempt the transactions contemplated by this
Agreement from the provisions of Section 203 of the General Corporation Law of
Delaware and any other applicable state takeover statute and from any applicable
charter or contractual agreement, arrangement or understanding to which the
Company is a party containing change of control, "antitakeover" or similar
provisions.
(b) The execution and delivery of this Agreement and the consummation of the
sale of the Shares to Buyer on the Closing Date will not (i) violate any term or
provision of the Certificate of Incorporation or By-laws of Stockholder or
similar organizational documents; (ii) result in the breach of any term,
condition or other provision of, or constitute a default under, any material
agreement or instrument to which Stockholder is a party or by which it is bound;
or (iii) violate or result in a breach of, or constitute a default under, any
judgment, order, decree, law, rule, regulation or other restriction of any
court, government or governmental agency to which Stockholder is subject other
than violations, breaches or defaults which, individually, or in the aggregate,
would not have a material adverse effect on the ability of Stockholder to
perform its obligations hereunder, except that the transfer of the Shares
hereunder will give PNC Bank the right to accelerate its portion of the Company
Debt (as defined in the Tender Agreement).
(c) Stockholder, or its subsidiary, Von Roll Steel Holdings AG, is the
record and beneficial owner of, and has good and valid title to, the Shares,
free and clear of all liens, encumbrances, claims, charges, assessments and
limitations of every kind whatsoever (collectively, "Liens"). There are no
outstanding warrants, subscriptions, rights, options, calls, commitments or
other agreements to purchase or acquire any of the Shares. Neither Stockholder
nor any of its affiliates or associates (as such terms are defined in Rule 12b-2
promulgated under the Securities Exchange Act of 1934, as amended) holds either
of record or beneficially any securities or capital stock of the Company or any
of the Company's direct or indirect subsidiaries other than the Shares. On the
Closing Date, Stockholder will sell, transfer and convey to Buyer good and valid
title to the Shares, free and clear of all Liens.
7. BUYER'S REPRESENTATIONS AND WARRANTIES. In connection with a purchase
pursuant to Section 1 or 2 above, Buyer represents and warrants to Stockholder
as follows:
(a) Buyer is a corporation duly organized, validly existing and in good
standing under the laws of Canada and has the corporate power and corporate
authority to enter into and perform its obligations under the Offer and this
Agreement. Buyer's execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and legally binding obligation of Buyer enforceable against
Buyer in accordance with its terms.
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(b) The execution and delivery of this Agreement and the consummation of the
purchase of the Shares from Stockholder pursuant to the Offer or on the Closing
Date will not (i) violate the Certificate of Incorporation or By-laws of Buyer;
(ii) result in the breach of any term, condition or other provision of, or
constitute a default under, any material agreement or instrument to which Buyer
is a party or by which Buyer is bound; or (iii) violate or result in a breach
of, or constitute a default under, any judgment, order, decree, law, rule,
regulation or other restriction of any court, government or governmental agency
to which Buyer is subject other than violations, breaches or defaults which,
individually or in the aggregate, would not have a material adverse effect on
the ability of Buyer to perform its obligations hereunder.
(c) Buyer is acquiring the Shares solely for its own account, for investment
and not with a view to, or for resale in connection with, any distribution of
the Shares or any part thereof in violation of applicable federal or state
securities laws and Buyer agrees with Stockholder, and such agreement shall be
for the benefit as well of the Company, that Buyer will not dispose of any of
the Shares except in compliance with applicable Federal and state securities
laws.
8. VOTING AGREEMENT. At any meeting or consent solicitation of the Company's
stockholders, or upon request of Buyer that it act alone without a meeting
pursuant to the Delaware General Corporation Law, during the term of this
Agreement, Stockholder shall vote, or express a consent with respect to, all of
the Shares in favor of approval and adoption of the Tender Agreement and the
transactions contemplated thereby, including, without limitation, the Merger,
and against any competing Takeover Proposal (as defined in the Tender
Agreement).
9. HSR ACT. Each party hereto shall use its reasonable efforts to make all
necessary filings, and thereafter make any other required submissions, with
respect to this Agreement required under the HSR; provided that each party
hereto shall cooperate with each other in connection with the making of all such
filings, including providing copies of all such documents to the non-filing
party and its advisors prior to filing and, if requested, to accept all
reasonable additions, deletions or changes suggested in connection therewith.
10. EXPENSES. Each party hereto shall pay its own expenses incurred in
connection with this Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, any fees and commissions, if
any, payable to any person, including, without limitation, financial
institutions, retained by such party. Stockholder agrees to pay all applicable
transfer taxes in connection with Buyer's purchase of the Shares.
11. EXCLUSIVE DEALING. Stockholder will not, directly or indirectly, through
any director, officer, agent, partner, shareholder or otherwise solicit,
initiate or encourage submission of offers or proposals from, or enter into any
discussions, negotiations, agreements, arrangements or understandings with, any
person in respect of the purchase or other acquisition, directly or indirectly,
of all or a portion of any equity or other ownership interest in the Company or
any merger, consolidation, business combination or equity investment (directly
or indirectly) with the Company, or participate in any discussions or
negotiations regarding or furnish or afford access to any other person to any
information regarding, or otherwise cooperate in any manner with, or assist or
participate in, facilitate or encourage, any effort or attempt by any other
person with respect to any of the foregoing. Nothing contained herein shall
prohibit any designee of the Stockholder who is serving as a director from
taking any such action solely in his capacity as a director of the Company to
the extent permitted under Section 7.07(d) of the Tender Agreement.
12. CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS. Stockholder shall keep
confidential and shall cause its affiliates and instruct its and their officers,
directors, employees and advisors to keep confidential and non-public
information regarding the Company, its assets, business and operations, except
as required by applicable law. Unless otherwise required by applicable law,
Buyer and Stockholder shall consult with each other before issuing any press
release or otherwise making any public statement with
4
<PAGE>
respect to this Agreement or the transactions contemplated hereby and shall not
issue any such press release or make any such public statement prior to such
consultation.
13. INDEMNIFICATION.
(a) Stockholder shall indemnify, defend and hold harmless Buyer, the
Surviving Corporation (as defined in the Tender Agreement) and their respective
officers, directors, employees, agents, affiliates, successors and assigns
(collectively, the "BUYER GROUP"), from and after the Closing, from and against
all demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, costs and expenses (collectively, "DAMAGES"), including, without
limitations, interest, penalties and reasonable attorneys' fees and expenses,
directly or indirectly made or asserted against, resulting to, imposed upon or
incurred by the Buyer Group, or any of them, by reason of or resulting from (i)
a breach of any representation or warranty of Stockholder contained in or made
pursuant to this Agreement or any facts or circumstances constituting such a
breach or (ii) non-fulfillment of any agreement or covenant of Stockholder
contained in or made pursuant to this Agreement or any facts or circumstances
constituting such non-fulfillment (collectively, "BUYER CLAIMS").
(b) The obligations and liabilities of Stockholder with respect to Buyer
Claims which arise or result from claims for Damages made by third parties
("THIRD-PARTY CLAIMS") shall be subject to the following terms and conditions:
(i) The indemnified party will give the indemnifying party prompt notice of
any such Third-Party Claim, setting forth therein in reasonable detail the basis
for such Third-Party Claim, and the indemnifying party shall have the right to
undertake the defense thereof by representatives chosen by it;
(ii) If the indemnifying party, within a reasonable time after notice of any
such Third-Party Claim, fails to defend the indemnified party against which such
Third-Party Claim has been asserted, the indemnified party shall (upon further
notice to the indemnifying party) have the right to undertake the defense,
compromise or settlement of such Third-Party claim on behalf of and for the
account and risk of the indemnifying party subject to the right of the
indemnifying party to assume the defense of such Third-Party Claim at any time
prior to settlement, compromise or final determination thereof; and
(iii) Any provision hereof to the contrary notwithstanding, (A) if there is
a reasonable probability that a Third-Party Claim may materially and adversely
affect the indemnified party other than as a result of money damages or other
money payments, the indemnified party shall have the right, at its own cost and
expense, to defend, compromise or settle such Third-Party Claim; PROVIDED,
HOWEVER, that if such Third-Party Claim is settled without the indemnifying
party's consent, the indemnified party shall be deemed to have waived all rights
hereunder against the indemnifying party for money damages arising out of such
Third-Party Claim; and (B) the indemnifying part shall not, without the written
consent of the indemnified party, settle or compromise any Third-Party Claim or
consent to the entry of any judgment which does not include as an unconditional
term thereof the giving by the claimant or the plaintiff to the indemnified
party a release from all liability in respect to such Third-Party Claim.
14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties, covenants and agreements made herein shall survive the execution and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement.
15. REASONABLE EFFORTS. Subject to the terms and conditions herein provided,
each of the parties hereto agrees to use all reasonable efforts promptly to
take, or cause to be taken, all actions and to do or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, the satisfaction of all conditions and receipt of
consents of all third parties and governmental authorities necessary to the
consummation of the transactions contemplated by this Agreement.
5
<PAGE>
16. ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof and
supersedes all prior or contemporaneous written or verbal agreements,
understandings and negotiations in connection herewith. This Agreement may be
amended, modified, terminated or cancelled only by the written agreement of the
parties hereto.
17. NOTICE. Any notices or other communications required or permitted
hereunder or otherwise in connection herewith shall be in writing and shall be
deemed to have been duly given and received on the date of delivery if delivered
in person or by overnight express delivery or when transmitted and confirmed by
facsimile transmission, or three business days after dispatch by registered or
certified mail, postage prepaid, addressed as follows (or at such other address
for a party as shall be specified by like notice, which notice shall not be
deemed to have been given until received by the addressee):
(a) If to Stockholder:
Von Roll Holding AG
CH-4563 Gerlafingen
Switzerland
Attention: Mr. H. Georg Hahnloser
Telecopy: 011-416-534-2208
with a copy to:
Jacobs Persinger & Parker
77 Water Street
New York, New York 10005
Attention: Walter H. Beebe, Esq.
Telecopy: 212-742-0938
(b) If to Buyer:
Co-Steel Inc.
Scotia Plaza
40 King Street West
PO Box 130
Toronto, Ontario
Canada M5H 3Y2
Attention: President
Telecopy: 416 366 4616
with copies to:
Goodman Phillips & Vineberg
250 Yonge Street
Toronto, Ontario
Canada M5B 2M6
Attention: Lorie Waisberg, Esq.
Telecopy: 416 979 1234
Wilentz Goldman & Spitzer
90 Woodbridge Center Drive
Woodbridge, NJ 07095
Attention: C. Kenneth Shank, Esq.
Telecopy: 908 855 6117
6
<PAGE>
18. ASSIGNMENT. This Agreement shall be binding upon and shall inure solely
to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement shall not be assigned by any party without the
prior written consent of the other party, except that Buyer may assign this
Agreement to a subsidiary or affiliate of Buyer.
19. SPECIFIC PERFORMANCE. Each of the parties hereto acknowledges that, in
view of the uniqueness of the transactions contemplated hereby, Buyer would not
have an adequate remedy at law for money damages in the event that this
Agreement were not performed in accordance with its terms, and therefore agrees
that Buyer shall be entitled to specific enforcement of the terms hereof in
addition to any other remedy to which Buyer may be entitled at law or in equity.
20. PARTIES IN INTEREST. No provision of this Agreement, express or implied,
is intended to or shall confer upon any other person any right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
21. WAIVER. The application of any provision of this Agreement may be waived
by any party entitled to the benefit thereof; PROVIDED, HOWEVER, that no delay
or failure on the part of any party in exercising any right hereunder, and no
waiver or partial or single exercise thereof, shall constitute a waiver of any
other rights under this Agreement.
22. GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York, without giving
effect to the principles of conflicts of laws thereof.
23. JURISDICTION; FORUM; SERVICE OF PROCESS.
(a) Any legal suit, action or proceeding bought by Stockholder or Buyer, or
any of their respective affiliates, arising out of or based upon this Agreement
shall be instituted exclusively in any federal or state court in the State of
New York, and each of Stockholder and Buyer (on its behalf and on behalf of such
affiliates) waives any objection which it may now or hereafter have to the
laying of venue of any such proceeding, and irrevocably submits to the
jurisdiction of such courts in any such suit, action or proceeding.
(b) Stockholder has appointed Jacobs Persinger & Parker as its authorized
agent (the "STOCKHOLDER'S AUTHORIZED AGENT") upon which process may be served in
any action based on this Agreement which may be instituted in any federal or
state court in the State of New York by Buyer and expressly accepts the
jurisdiction of any court in respect of such action. Such appointment shall be
irrevocable. Stockholder represents and warrants that Stockholder's Authorized
Agent has agreed to act as said agent for service of process, and Stockholder
agrees to take any and all action, including, without limitation, the filing of
any and all documents and instruments, which may be necessary to continue such
appointment in full force and effect. Service of process upon Stockholder's
Authorized Agent and written notice of such service to Stockholder shall be
deemed, in every respect, effective service of process upon Stockholder.
(c) Buyer has appointed Goodman Phillips & Vineberg as its authorized agent
(the "BUYER'S AUTHORIZED AGENT") upon which process may be served in any action
based on this Agreement which may be instituted in any federal or state court in
the State of New York by Stockholder and expressly accepts the jurisdiction of
any court in respect of such action. Such appointment shall be irrevocable.
Buyer represents and warrants that the Buyer's Authorized Agent has agreed to
act as said agent for service of process, and Buyer agrees to take any and all
action, including, without limitation, the filing of any and all documents and
instruments, which may be necessary to continue such appointment in full force
and effect. Service of process upon Buyer's Authorized Agent and written notice
of such service to Buyer shall be deemed, in every respect, effective service of
process upon Buyer.
7
<PAGE>
24. SEVERABILITY. In the event that any one or more of the provisions
contained herein or any application thereof shall be deemed invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement or any application thereof shall not in
any way be affected or impaired thereby, unless the invalidity, illegality or
unenforceability of such provisions frustrates the purpose of the parties
hereto.
25. HEADINGS. The headings to the sections of this Agreement are for
convenience only and in no way define, limit or describe the scope or intent of
this Agreement or any party hereto, nor in any other way affect this Agreement
or any part hereof.
26. MISCELLANEOUS. Whenever the context shall require, the use of any gender
shall include all genders, and the use of any singular shall include the plural,
and vice versa.
27. EXHIBITS. All exhibits attached to this Agreement are incorporated
herein by this reference.
28. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and
the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Stockholder
Agreement to be duly executed as of the day and year first above written.
<TABLE>
<S> <C> <C>
CO-STEEL INC.
By:
-----------------------------------------
Name: Lew Hutchinson
Title: President
</TABLE>
<TABLE>
<S> <C> <C>
VON ROLL HOLDING AG
By:
-----------------------------------------
Name: H. Georg Hahnloser
Title: Chief Operating Officer
</TABLE>
<TABLE>
<S> <C> <C>
VON ROLL STEEL HOLDING AG
By:
-----------------------------------------
Name: Georg Hahnloser
Title: Chairman
</TABLE>
8
<PAGE>
EXHIBIT A
<TABLE>
<S> <C> <C>
STATE OF )
: ss.:
COUNTY OF )
</TABLE>
Section 1445 of the Internal Revenue Code of 1986, as amended (the "Code"),
provides that a purchaser of a "U.S. real property interest", as defined in
Section 897 of the Code, from a foreign person may be required to withhold tax
under certain circumstances.
Pursuant to, and in compliance with the provisions of, Treasury Regulation
Section 1.897-2(h), the undersigned certifies the following to Co-Steel Inc. on
behalf of New Jersey Steel Corporation:
1. The shares of stock of New Jersey Steel Corporation owned by Von Roll
Holding AG do not constitute a "United States real property interest", as
defined in Section 897 of the Code;
2. New Jersey Steel Corporation's U.S. employer identification number is
22-2137967;
3. New Jersey Steel Corporation's office address is:
North Crossman Road
Sayreville, New Jersey 08872;
4. Von Roll Holdings AG's office address is:
CH-4563 Gerlafingen
Switzerland
Under penalties of perjury, I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete, and I further declare that I have authority to sign this document on
behalf of New Jersey Steel Corporation.
--------------------------------------
President
SWORN TO AND SUBSCRIBED
before me this day
of , 199 .
- ---------------------------------------------
Notary Public
9
