<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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
----------------
SPRECKELS INDUSTRIES, INC.
(NAME OF SUBJECT COMPANY)
----------------
L ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
COLUMBUS MCKINNON CORPORATION
(BIDDERS)
CLASS A COMMON STOCK, PAR VALUE $0.01 PER CUSIP NO. 849416201
SHARE
(INCLUDING THE ASSOCIATED COMMON STOCK
PURCHASE RIGHTS)
WARRANTS TO PURCHASE SHARES OF CLASS A
COMMON STOCK
($9.17 EXERCISE PRICE PER WARRANT)
WARRANTS TO PURCHASE SHARES OF CLASS A
COMMON STOCK
($11.67 EXERCISE PRICE PER WARRANT)
WARRANTS TO PURCHASE SHARES OF CLASS A
COMMON STOCK
($15.00 EXERCISE PRICE PER WARRANT)
WARRANTS TO PURCHASE SHARES OF CLASS A
COMMON STOCK
($1.00 EXERCISE PRICE PER WARRANT)
(TITLE OF CLASS OF SECURITIES) (CUSIP NUMBER OF CLASS
---------------- OF SECURITIES)
ROBERT L. MONTGOMERY, JR.
COLUMBUS MCKINNON CORPORATION
140 JOHN JAMES AUDUBON PARKWAY
AMHERST, NEW YORK 14228
(716) 689-5400
(NAMES, ADDRESSES AND TELEPHONE NUMBERS OF PERSONS AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
WITH COPIES TO:
FREDERICK G. ATTEA, ESQ. MORTON A. PIERCE, ESQ.
PHILLIPS, LYTLE, HITCHCOCK, DEWEY BALLANTINE
BLAINE & HUBER 1301 AVENUE OF THE AMERICAS
3400 MARINE MIDLAND CENTER NEW YORK, NEW YORK 10019
BUFFALO, NEW YORK 14203 (212) 259-8000
(716) 847-7010
CALCULATION OF FILING FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRANSACTION VALUATION AMOUNT OF FILING FEE
- --------------------------------------------------------------------------------
<S> <C>
$197,795,040/1/ $39,559/1/
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
[_]CHECK BOX IF ANY PART OF THE FEE IS OFFSET BY RULE O-11(A)(2) AND IDENTIFY
THE FILING WITH WHICH THE OFFSETTING FEE WAS PREVIOUSLY PAID. IDENTIFY THE
PREVIOUS FILING BY REGISTRATION STATEMENT NUMBER, OR THE FORM OR SCHEDULE
AND THE DATE OF ITS FILING.
<TABLE>
<S> <C>
AMOUNT PREVIOUSLY PAID: NOT APPLICABLE
FORM OR REGISTRATION NO.: NOT APPLICABLE
FILING PARTY: NOT APPLICABLE
DATE FILED: NOT APPLICABLE
</TABLE>
----------------
/1/FOR PURPOSES OF CALCULATING FEE ONLY. THIS AMOUNT ASSUMES THE PURCHASE OF
(i) AN AGGREGATE OF 6,090,941 SHARES (INCLUDING THE ASSOCIATED RIGHTS) AT A
PURCHASE PRICE OF $24.00 NET PER SHARE (AND THE ASSOCIATED RIGHT), (ii)
900,000 $9.17 WARRANTS AT A PURCHASE PRICE OF $14.83 PER WARRANT, (iii)
600,000 $11.67 WARRANTS AT A PURCHASE PRICE OF $12.33 PER WARRANT, (iv)
1,050,000 $15.00 WARRANTS AT A PURCHASE PRICE OF $9.00 PER WARRANT, (v)
300,000 $1.00 WARRANTS AT A PURCHASE PRICE OF $23.00 PER WARRANT AND (vi)
604,894 SHARES ISSUABLE UPON EXERCISE OF OPTIONS AT A PURCHASE PRICE OF $24.00
NET PER SHARE. THE AMOUNT OF THE FILING FEE, CALCULATED IN ACCORDANCE WITH
REGULATION 240.0-11(d) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
EQUALS 1/50 OF ONE PERCENTUM OF THE VALUE OF SHARES (INCLUDING ASSOCIATED
RIGHTS) AND WARRANTS PURCHASED.
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<PAGE>
CUSIP No. 849416201
Page ____ of ____ Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON: L ACQUISITION CORPORATION
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 16-1507147
- --------------------------------------------------------------------------------
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
ITEMS 2(e) or 2(f) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES [_]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N/A
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
2
<PAGE>
CUSIP No. 849416201 Page ____ of ____ Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON: COLUMBUS McKINNON CORPORATION
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 16-0547600
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [_]
(b) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCES OF FUNDS
BK
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(e) or 2(f) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES [_]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
N/A
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
3
<PAGE>
This Statement relates to a tender offer by L Acquisition Corporation, a
Delaware corporation (the "Purchaser") and a wholly owned subsidiary of
Columbus McKinnon Corporation, a New York corporation ("Parent"), to purchase
(i) all outstanding shares of Class A Common Stock, par value $0.01 per share
(the "Shares"), of Spreckels Industries, Inc. (doing business as Yale
International, Inc.), a Delaware corporation (the "Company"), including the
associated common stock purchase rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of November 11, 1995, between the Company and
ChaseMellon Shareholder Services, L.L.C. (successor to Chemical Mellon
Shareholder Services, L.L.C.), as Rights Agent, as amended (the "Rights
Agreement"), at a purchase price of $24.00 per Share (and the associated
Right) and (ii) all outstanding warrants of the Company to purchase Shares
(the "Warrants"), at a price equal to the difference between the Offer price
for the Shares and the exercise price for each of the Warrants, which equals
$14.83 per Warrant, in the case of the $9.17 Warrants (as defined below),
$12.33 per Warrant, in the case of the $11.67 Warrants (as defined below),
$9.00 per Warrant, in the case of the $15.00 Warrants (as defined below) and
$23.00 per Warrant, in the case of the $1.00 Warrants (as defined below), in
each case net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated August
30, 1996 (the "Offer to Purchase") and in the related Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer"). Copies
of the Offer to Purchase and the Letter of Transmittal are annexed to and
filed with this Statement as Exhibits (a)(1) and (a)(2), respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Spreckels Industries, Inc., a
Delaware corporation. The principal executive offices of the Company are
located at 6805 Morrison Boulevard, Suite 450, One Morrocroft Centre,
Charlotte, North Carolina 28211.
(b) The exact title of the class of equity securities being sought in the
Offer is the Class A Common Stock, par value $0.01 per Share, of the Company,
Warrants to Purchase Shares of Class A Common Stock ($9.17 Exercise Price Per
Warrant) (the "$9.17 Warrants"), Warrants to Purchase Shares of Class A Common
Stock ($11.67 Exercise Price Per Warrant) (the "$11.67 Warrants"), Warrants to
Purchase Shares of Class A Common Stock ($15.00 Exercise Price Per Warrant)
(the "$15.00 Warrants") and Warrants to Purchase Shares of Class A Common
Stock ($1.00 Exercise Price Per Warrant) (the $1.00 Warrants"). The
information set forth in the Introduction to the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a) through (d) and (g). This Statement is being filed by the Purchaser and
Parent. The information set forth in the "Introduction," Section 9 ("Certain
Information Concerning the Purchaser and Parent") and Schedule I of the Offer
to Purchase, is incorporated herein by reference.
(e) and (f). None of the Purchaser or Parent, nor, to the best of their
knowledge, any of the persons listed in Schedule I of the Offer to Purchase,
has during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any
violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) and (b). The information set forth in the "Introduction," Section 9
("Certain Information Concerning the Purchaser and Parent"), Section 11
("Background of the Offer") and Section 12 ("Purpose of the Offer; Plans for
the Company; Proposed Merger; Rights Agreement") of the Offer to Purchase is
incorporated herein by reference.
4
<PAGE>
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 BIDDER.
(a) through (e). The information set forth in the "Introduction," Section 11
("Background of the Offer") and Section 12 ("Purpose of the Offer; Plans for
the Company; Proposed Merger; Rights Agreement") of the Offer to Purchase is
incorporated herein by reference.
(f) and (g). The information set forth in Section 7 ("Effect of the Offer on
the Market for the Shares; 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 the "Introduction," Section 9
("Certain Information Concerning the Purchaser and Parent") and Schedule I of
the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the "Introduction," Section 9 ("Certain
Information Concerning the Purchaser and Parent"), Section 11 ("Background of
the Offer"), Section 12 ("Purpose of the Offer; Plans for the Company;
Proposed Merger; Rights Agreement") and Schedule I 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.
The information set forth in Section 9 ("Certain Information Concerning the
Purchaser and Parent") of the Offer to Purchase is incorporated herein by
reference.
The incorporation by reference herein of the above-mentioned financial
information does not constitute an admission that such information is material
to a decision by a security holder of the Company whether to sell, tender or
hold securities being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) None.
(b) and (c). The information set forth in Section 15 ("Certain Legal
Matters; Regulatory Approvals") 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; Exchange Act Registration; Margin Regulations") and
Section 15 ("Certain Legal Matters; Regulatory Approvals") of the Offer to
Purchase is incorporated herein by reference.
(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
5
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S>
(a)(1) Offer to Purchase, dated August 30, 1996.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Letter from Bear, Stearns & Co. Inc., as Dealer Manager, to
Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(4) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees to Clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Form of tombstone advertisement, dated August 30, 1996.
(a)(8) Form of press release issued by Parent on August 26, 1996.
(b)(1) Commitment Letter from Fleet Bank; Summary of Terms and Conditions by
and between Parent and Fleet Bank.
(c)(1) The Agreement and Plan of Merger, dated August 24, 1996, among Parent,
the Purchaser and the Company.
(d) None.
(e) Not Applicable.
(f) None.
</TABLE>
6
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: August 30, 1996
L Acquisition Corporation
/s/ Robert L. Montgomery, Jr.
By: _________________________________
Name: Robert L. Montgomery, Jr.
Title: Vice President and
Treasurer
Columbus McKinnon Corporation
/s/ Robert L. Montgomery, Jr.
By: _________________________________
Name: Robert L. Montgomery, Jr.
Title: Executive Vice President
and Chief Financial Officer
7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
(a)(1) Offer to Purchase, dated August 30, 1996........................
(a)(2) Form of Letter of Transmittal...................................
(a)(3) Form of Letter from Bear, Stearns & Co. Inc., as Dealer Manager,
to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees........................................................
(a)(4) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees to Clients.........................
(a)(5) Notice of Guaranteed Delivery...................................
Guidelines for Certification of Taxpayer Identification Number
(a)(6) on Substitute Form W-9..........................................
(a)(7) Form of tombstone advertisement, dated August 30, 1996..........
(a)(8) Form of press release issued by Parent on August 26, 1996.......
(b)(1) Commitment Letter from Fleet Bank; Summary of Terms and
Conditions by and between Parent and Fleet Bank.................
(c)(1) The Agreement and Plan of Merger, dated August 24, 1996, among
Parent, the Purchaser and the Company...........................
(d) None............................................................
(e) Not Applicable..................................................
(f) None............................................................
</TABLE>
<PAGE>
Exhibit 99.(a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
AND
ALL OUTSTANDING WARRANTS TO PURCHASE SHARES OF CLASS A COMMON STOCK
OF
SPRECKELS INDUSTRIES, INC.
AT
$24.00 NET PER SHARE
AND
$14.83 NET PER $9.17 WARRANT
$12.33 NET PER $11.67 WARRANT
$9.00 NET PER $15.00 WARRANT
$23.00 NET PER $1.00 WARRANT
BY
L ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
COLUMBUS MCKINNON CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORKCITY
TIME, ON FRIDAY, SEPTEMBER 27, 1996, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN), A
NUMBER OF SHARES OF CLASS A COMMON STOCK, PAR VALUE $0.01 PER SHARE (THE
"SHARES"), OF SPRECKELS INDUSTRIES, INC. (THE "COMPANY") WHICH, WHEN ADDED TO
THE SHARES OWNED BY COLUMBUS McKINNON CORPORATION ("PARENT"), CONSTITUTES AT
LEAST 51% OF THE VOTING POWER (DETERMINED ON A FULLY DILUTED BASIS, INCLUDING
THE EXERCISE IN FULL OF ALL OPTIONS AND WARRANTS OUTSTANDING, OTHER THAN
WARRANTS VALIDLY TENDERED AND ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER) ON
THE DATE OF PURCHASE, OF ALL OF THE SECURITIES OF THE COMPANY ENTITLED TO VOTE
GENERALLY IN THE ELECTION OF DIRECTORS OR IN A MERGER AND (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 THE
SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED. SEE SECTION
14.
--------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE
OFFER AND THE MERGER DESCRIBED HEREIN ARE FAIR TO, AND IN THE BEST INTERESTS
OF, THE COMPANY AND ITS STOCKHOLDERS AND WARRANT HOLDERS (COLLECTIVELY, THE
"HOLDERS"), HAS APPROVED THE OFFER AND THE MERGER AND RECOMMENDS THAT THE
COMPANY'S HOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES AND WARRANTS
PURSUANT TO THE OFFER.
--------------
IMPORTANT
Any Holder desiring to tender all or any portion of such Holder's Shares or
Warrants should either (1) complete and sign the Letter of Transmittal (or a
manually signed facsimile thereof) in accordance with the instructions in the
Letter of Transmittal and mail or deliver it and any other required documents
to the Depositary and either deliver the certificates for such Shares or
Warrants to the Depositary along with the Letter of Transmittal (or a manually
signed facsimile) or deliver such Shares pursuant to the procedures for book-
entry transfer set forth in Section 3 hereof or (2) request his or her broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for him or her. A Holder whose Shares or Warrants are registered
in the name of a broker, dealer, commercial bank, trust company or other
nominee must contact such person if he or she desires to tender such Shares or
Warrants.
If a Holder desires to tender Shares or Warrants and such Holder's
certificates are not immediately available, or the procedures for book-entry
transfer, if applicable, 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 Holder may tender such Shares or Warrants by following
the procedures for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional
copies of this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be obtained from the Information Agent, the Dealer
Manager or from brokers, dealers, commercial banks or trust companies.
--------------
THE DEALER MANAGER FOR THE OFFER IS:
BEAR, STEARNS & CO. INC.
August 30, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
------- ----
<C> <S> <C>
INTRODUCTION................................................... 1
1. Terms of the Offer; Expiration Date............................ 2
2. Acceptance for Payment and Payment............................. 3
3. Procedure for Tendering Shares and Warrants.................... 4
4. Withdrawal Rights.............................................. 7
5. Certain Federal Income Tax Consequences of the Offer and the
Merger......................................................... 7
6. Price Range of Shares; Dividends............................... 8
7. Effect of the Offer on the Market for the Shares; Exchange Act
Registration; Margin Regulations............................... 9
8. Certain Information Concerning the Company..................... 10
9. Certain Information Concerning the Purchaser and Parent........ 13
10. Source and Amounts of Funds.................................... 15
11. Background of the Offer........................................ 17
12. Purpose of the Offer; Plans for the Company; Proposed Merger;
Rights Agreement............................................... 18
13. Dividends and Distributions.................................... 28
14. Certain Conditions to the Offer................................ 28
15. Certain Legal Matters; Regulatory Approvals.................... 30
16. Fees and Expenses.............................................. 32
17. Miscellaneous.................................................. 32
Schedule I--Directors and Executive Officers of Parent and the
Purchaser...................................................... S-1
</TABLE>
i
<PAGE>
To the Holders of Class A Common Stock and Warrants of Spreckels Industries,
Inc.:
INTRODUCTION
L Acquisition Corporation, a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Columbus McKinnon Corporation, a New York
corporation ("Parent"), hereby offers to purchase (i) all outstanding shares
of Class A Common Stock, par value $0.01 per share (the "Shares"), of
Spreckels Industries, Inc., a Delaware corporation (the "Company"), including
the associated common stock purchase rights (the "Rights") issued pursuant to
the Rights Agreement, dated as of November 11, 1995, between the Company and
ChaseMellon Shareholder Services, L.L.C. (successor to Chemical Mellon
Shareholder Services, L.L.C.), as Rights Agent, as amended (the "Rights
Agreement"), at a purchase price of $24.00 per Share (and the associated
Right) and (ii) all outstanding warrants of the Company to purchase Shares
(the "Warrants") at the Spread (as defined below), in each case net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"). The Company is currently doing business as Yale International, Inc.
The Company has outstanding four classes of Warrants exercisable for Shares
at prices of $9.17, $11.67, $15.00 and $1.00, respectively, per Warrant (the
"$9.17 Warrants," the "$11.67 Warrants," the "$15.00 Warrants" and the "$1.00
Warrants," respectively). The "Spread" with respect to each of the Warrants is
the difference between the Offer price for the Shares and the exercise price
for each of the Warrants, which equals $14.83 per Warrant, in the case of the
$9.17 Warrants, $12.33 per Warrant, in the case of the $11.67 Warrants, $9.00
per Warrant, in the case of the $15.00 Warrants and $23.00 per Warrant, in the
case of the $1.00 Warrants. Each Warrant will expire at 5:00 p.m. on September
2, 2001.
Tendering Holders will not be obligated to pay brokerage fees or commissions
or, except as set forth on Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the purchase of Shares or Warrants by the Purchaser pursuant
to the Offer. The Purchaser will pay all charges and expenses of Bear, Stearns
& Co. Inc. ("Bear Stearns"), which is acting as Dealer Manager for the Offer
(in such capacity, the "Dealer Manager"), First Chicago Trust Company of New
York, which is acting as Depositary (the "Depositary"), and Morrow & Co.,
Inc., which is acting as the Information Agent (the "Information Agent"),
incurred in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD OF DIRECTORS" OR THE
"BOARD") HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER DESCRIBED
HEREIN ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS HOLDERS,
HAS APPROVED THE OFFER AND THE MERGER AND RECOMMENDS THAT THE HOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES AND WARRANTS PURSUANT TO THE OFFER.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
August 24, 1996 (the "Merger Agreement"), among Parent, the Purchaser and the
Company. The Merger Agreement provides, among other things, that upon the
terms and subject to the conditions therein, as soon as practicable after the
consummation of the Offer and any required approval of the Merger Agreement by
the stockholders of the Company (the "Stockholders"), the Purchaser will be
merged with and into the Company (the "Merger"), with the Company being the
corporation surviving the Merger (the "Surviving Corporation"). Each
outstanding Share (other than Dissenting Shares (as hereinafter defined)) not
owned by Parent, the Purchaser, the Company or any of their subsidiaries will
be converted into and represent the right to receive $24.00 in cash or any
higher price that may be paid per Share pursuant to the Offer, without
interest. See Section 12.
1
<PAGE>
Salomon Brothers Inc ("Salomon Brothers"), financial advisor to the Company,
has delivered to the Board of Directors its written opinion to the effect
that, as of the date of the Merger Agreement, the $24.00 in cash to be
received by the Stockholders, in the Offer and the Merger, is fair to such
Stockholders from a financial point of view. A copy of such opinion is
included with the Company's Solicitation/Recommendation Statement on Schedule
14D-9 with respect to the Offer, and Holders are urged to read the opinion in
its entirety for a description of the assumptions made, factors considered and
procedures followed by Salomon Brothers.
PURCHASER SHALL NOT BE REQUIRED TO CONSUMMATE THE OFFER IF PRIOR TO THE
EXPIRATION OF THE OFFER A NUMBER OF SHARES WHICH, WHEN ADDED TO THE SHARES
OWNED BY PARENT, CONSTITUTES AT LEAST 51% OF THE VOTING POWER (DETERMINED ON A
FULLY DILUTED BASIS, INCLUDING THE EXERCISE IN FULL OF ALL OPTIONS AND
WARRANTS OUTSTANDING, OTHER THAN WARRANTS VALIDLY TENDERED AND ACCEPTED FOR
PAYMENT PURSUANT TO THE OFFER) ON THE DATE OF PURCHASE, OF ALL OF THE
SECURITIES OF THE COMPANY ENTITLED TO VOTE GENERALLY IN THE ELECTION OF
DIRECTORS OR IN A MERGER SHALL NOT HAVE BEEN VALIDLY TENDERED AND AVAILABLE
FOR ACCEPTANCE PURSUANT TO THE OFFER (THE "MINIMUM CONDITION").
PURSUANT TO THE MERGER AGREEMENT, THE COMPANY HAS REPRESENTED AND WARRANTED
THAT AS OF AUGUST 23, 1996, 6,090,941 SHARES WERE ISSUED AND OUTSTANDING (PLUS
ANY SHARES ISSUED UPON THE EXERCISE OF EMPLOYEE OPTIONS SINCE AUGUST 21,
1996), 604,894 SHARES (LESS ANY SHARES ISSUED UPON THE EXERCISE OF EMPLOYEE
OPTIONS SINCE AUGUST 21, 1996) WERE RESERVED FOR ISSUANCE AND ARE ISSUABLE IN
CONNECTION WITH THE EXERCISE OF EMPLOYEE OPTIONS AND 900,000 SHARES, 600,000
SHARES, 1,050,000 SHARES AND 300,000 SHARES, RESPECTIVELY, WERE RESERVED FOR
ISSUANCE AND ARE ISSUABLE IN CONNECTION WITH THE EXERCISE OF THE $9.17
WARRANTS, THE $11.67 WARRANTS, THE $15.00 WARRANTS AND THE $1.00 WARRANTS,
RESPECTIVELY.
See Section 14, which sets forth the conditions to consummation of the Offer
and Section 15, which discusses certain legal matters and regulatory consents
and approvals.
Section 203 of the DGCL. Section 203 of the Delaware General Corporation Law
(the "DGCL"), in general, prohibits a Delaware corporation such as the Company
from engaging in a business combination with the holder of 15% or more of its
outstanding shares for a period of three years from the date of acquisition of
such shares unless certain conditions are satisfied. In its Restated
Certificate of Incorporation, filed September 2, 1993, the Company elected not
to be governed by Section 203 of the DGCL.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for all Shares and
Warrants that have been validly tendered prior to the Expiration Date and not
withdrawn as permitted by Section 4. The term "Expiration Date" means 12:00
Midnight, New York City time, on Friday, September 27, 1996, unless and until
the Purchaser, in its sole discretion, shall have extended the period of time
for which the Offer is open, subject to the terms of the Merger Agreement, in
which event the term "Expiration Date" shall refer to the latest time and date
at which the Offer, as so extended by the Purchaser, shall expire.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), the Purchaser reserves the right, in
its sole discretion, at any time or from time to time, and regardless of
whether any of the events set forth in Section 14 hereof shall have occurred
or shall have been determined by the Purchaser to have occurred, to (a) extend
the Offer up to the tenth business day after the later of (i) October 11, 1996
and (ii) the date on which all such conditions shall first have been satisfied
or waived, and thereby delay acceptance for payment of and the payment for any
Shares or Warrants, by giving oral or written notice of such extension to the
Depositary and (b) waive any of the conditions set forth in Section 14 (other
than the Minimum Condition) and to make any other changes in the terms and
conditions of the Offer by
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<PAGE>
giving oral or written notice of such waiver or amendment to the Depositary;
provided, however, that unless previously approved by the Company in writing,
no change may be made which decreases the price per Share or Spread per
Warrant payable in the Offer, which changes the form of consideration payable
in the Offer (other than by adding consideration), which reduces the maximum
number of Shares or Warrants to be purchased in the Offer or which imposes
conditions to the Offer in addition to those set forth in Section 14 hereto.
During any such extension, all Shares and Warrants previously tendered and not
properly withdrawn will remain subject to the Offer, subject to the right of a
tendering Holder to withdraw such Holder's Shares or Warrants. See Section 4.
If by the Expiration Date any or all of the conditions to the Offer have not
been satisfied or waived, the Purchaser reserves the right (but shall not be
obligated), in its sole discretion, subject to the terms of the Merger
Agreement and the applicable rules and regulations of the Commission, to (a)
terminate the Offer and not accept for payment or pay for any Shares or
Warrants and return all tendered Shares and Warrants to tendering Holders, (b)
waive all the unsatisfied conditions (other than the Minimum Condition) and
accept for payment and pay for all Shares and Warrants validly tendered prior
to the Expiration Date, or (c) extend the Offer and, subject to the right of
Holders to withdraw Shares and Warrants during such extension, retain the
Shares and Warrants that have been tendered during the period or periods for
which the Offer is extended.
The rights reserved by the Purchaser in the two preceding paragraphs are in
addition to the Purchaser's rights pursuant to Section 14. There can be no
assurance that the Purchaser will exercise its rights to extend the Offer. Any
extension, amendment or termination will be followed as promptly as
practicable by public announcement. In the case of an extension, Rule 14e-1(d)
under the Exchange Act requires that the announcement be issued no later than
9:00 a.m., 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 Securities and Exchange Act of 1934,
as amended (the "Exchange Act"). Subject to applicable law (including Rules
14d-4(c) and 14d-6(d) under the Exchange Act, which requires that any material
change in the information published, sent or given to Holders be promptly
disseminated in a manner reasonably designed to inform the Holders of such
change) and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser currently intends to make
announcements by issuing a release to the Dow Jones News Service. For purposes
of the Offer, "business day" has the meaning set forth in Rule 14d-1 under the
Exchange Act.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares and Warrants) is delayed in its
purchase of or payment for Shares or Warrants or is unable to pay for Shares
or Warrants pursuant to the Offer for any reason, then, without prejudice to
the Purchaser's right under the Offer, the Depositary may retain tendered
Shares or Warrants on behalf of the Purchaser, and such Shares or Warrants may
not be withdrawn except to the extent tendering Holders are entitled to
withdrawal rights as described in Section 4.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will extend the Offer and disseminate additional tender offer
materials to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under
the Exchange Act.
The Company has provided or will provide the Purchaser with the Company's
Stockholder and Warrant holder lists and security position listings for the
purpose of disseminating the Offer to Holders. This Offer to Purchase and the
related Letter of Transmittal and other relevant materials will be mailed to
record holders of Shares and Warrants, and will be furnished to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the securityholder 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
and Warrants.
2. 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 pay
3
<PAGE>
for all Shares and Warrants validly tendered and not withdrawn on or prior to
the Expiration Date as soon as practicable after the later of (i) the
Expiration Date and (ii) the satisfaction or waiver of the conditions set
forth in Section 14. All questions as to the satisfaction of such terms and
conditions will be determined in good faith by the Purchaser. Subject to the
applicable rules of the Commission, the Purchaser expressly reserves the right
to delay acceptance for payment of or payment for Shares or Warrants in order
to comply, in whole or in part, with any applicable law or government
regulation. Any such delays will be effected in compliance with Rule 14e-1(c)
under the Exchange Act (relating to a bidder's obligation to pay for or return
tendered securities promptly after the termination or withdrawal of such
bidder's offer).
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment tendered Shares and Warrants when, as and if the Purchaser gives
oral or written notice to the Depositary of its acceptance of the tenders of
such Shares and Warrants. Payment for Shares and Warrants accepted for payment
pursuant to the Offer will be made by deposit of the purchase price with the
Depositary, which will act as agent for the tendering Holders for the purpose
of receiving payments from the Purchaser and transmitting such payments to
tendering Holders. For a description of the procedure for tendering Shares and
Warrants pursuant to the Offer, see Section 3. Accordingly, payment may be
made to tendering Holders at different times if delivery of the Shares and
Warrants and other required documents occur at different times. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID BY THE PURCHASER ON THE CONSIDERATION PAID
FOR SHARES AND WARRANTS PURSUANT TO THE OFFER, WHETHER OR NOT THE PURCHASER
EXERCISES ITS RIGHTS TO EXTEND THE OFFER OR DELAYS IN MAKING SUCH PAYMENT.
If the Purchaser increases the consideration to be paid for Shares and
Warrants pursuant to the Offer, the Purchaser will pay such increased
consideration for all Shares and Warrants purchased pursuant to the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to any direct or indirect wholly owned subsidiary or
subsidiaries of Parent the right to purchase Shares and Warrants tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
the Purchaser of its obligations under the Offer or prejudice the rights of
tendering Holders to receive payment for Shares and Warrants validly tendered
and accepted for payment.
If any tendered Shares or Warrants are not purchased pursuant to the Offer
for any reason, or if certificates are submitted for more Shares and Warrants
than are tendered, certificates for such unpurchased or untendered Shares and
Warrants will be returned (or, in the case of Shares tendered by book-entry
transfer, such Shares will be credited to an account maintained at one of the
Book-Entry Transfer Facilities (as defined in Section 3)), without expense to
the tendering Holder, as promptly as practicable following the expiration or
termination of the Offer.
3. PROCEDURE FOR TENDERING SHARES AND WARRANTS
Valid Tenders. For a Holder validly to tender Shares and Warrants pursuant
to the Offer, either (a) a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) and any other documents required by the
Letter of Transmittal must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase and either (i)
certificates for the Shares and Warrants to be tendered must be received by
the Depositary, at one of such addresses or (ii) such Shares must be delivered
pursuant to the procedures for book-entry transfer described below (and a
confirmation of such delivery received by the Depositary, including an Agent's
Message (as defined below) if the tendering Holder has not delivered a Letter
of Transmittal (or a facsimile thereof)), in each case prior to the Expiration
Date, or (b) the guaranteed delivery procedure described below must be
complied with. As used herein, "Certificates" shall mean certificates
representing Shares or Warrants, as the case may be.
Book-Entry Transfer. The Depositary will establish accounts with respect to
the Shares at The Depository Trust Company and the Philadelphia Depository
Trust Company (each, a "Book-Entry Transfer Facility") for purposes of the
Offer within two business days after the date of this Offer to Purchase. Any
financial institution
4
<PAGE>
that is a participant in any of the Book-Entry Transfer Facilities' systems
may make book-entry delivery of Shares by causing a Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account in accordance
with such Book-Entry Transfer Facility's procedures for transfer. However,
although delivery of Shares may be effected through book-entry transfer at a
Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, 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 procedures described below.
The confirmation of a book-entry transfer into the Depositary's account at a
Book-Entry Facility as described herein is referred to herein as a "Book-Entry
Confirmation". DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
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 acknowledgement from the participant in such Book-
Entry Transfer Facility tendering the Shares, that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that the Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ANY
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER, AND THE DELIVERY
WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING,
IN THE CASE OF A BOOK-ENTRY TRANSFER, A BOOK-ENTRY CONFIRMATION). IF DELIVERY
IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED,
IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE
TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (a) if the Letter of Transmittal is signed by a registered holder
(which term, for purposes of this Section, includes any participant in any of
the Book-Entry Transfer Facilities' systems whose name appears on a security
position listing as the owner of the applicable security) of Shares or
Warrants, as the case may be, tendered therewith and such registered holder
has not completed either the box entitled "Special Delivery Instructions" or
the box entitled "Special Payment Instructions" on the Letter of Transmittal,
or (b) if the securities 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 (each, an "Eligible
Institution"). In all other cases, all signatures on the Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instructions 1 and 5 to the
Letter of Transmittal.
If the Certificates are registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made or
Certificates not tendered or not accepted for payment are to be returned to a
person other than the registered holder, then 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 owner or owners appear on the
Certificates, with the signatures guaranteed as described above. See
Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a Holder desires to tender Shares or Warrants
pursuant to the Offer and such Holder's Certificates are not immediately
available or time will not permit all required documents to reach the
Depositary on or prior to the Expiration Date, or the procedure for book-entry
transfer cannot be completed on a timely basis, such Shares or Warrants may
nevertheless be tendered if all the following conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
5
<PAGE>
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser herewith, is
received by the Depositary on or prior to the Expiration Date; and
(iii) the appropriate Certificates (or, if applicable, a Book-Entry
Confirmation) representing all tendered securities, in proper form for
transfer, together with the appropriate 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 documents required by the Letter of Transmittal, are received
by the Depositary within three trading days after the execution of such
Notice of Guaranteed Delivery. A trading day is any day on which the Nasdaq
National Market is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
IN ALL CASES, SHARES SHALL NOT BE DEEMED VALIDLY TENDERED UNLESS A PROPERLY
COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF) IS
RECEIVED BY THE DEPOSITARY.
The Purchaser's acceptance for payment of Shares or Warrants validly
tendered pursuant to the Offer will constitute a binding agreement between the
tendering Holder and the Purchaser upon the terms and subject to the
conditions of the Offer.
Appointment as Proxy. By executing a Letter of Transmittal as set forth
above, a tendering Holder irrevocably appoints designees of the Purchaser as
the Holder'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 the Holder's rights with respect to the securities tendered by the
Holder and accepted for payment by the Purchaser (and any and all other
securities issued or issuable in respect of such Shares and Warrants on or
after the date of this Offer to Purchase). All such powers of attorney and
proxies shall be considered coupled with an interest in the tendered
securities. This appointment will be effective when, and only to the extent
that, the Purchaser accepts the tendered securities for payment pursuant to
the Offer. Upon such acceptance for payment, all prior powers of attorney,
proxies or consents given by the Holder with respect to the tendered
securities will, without further action, be revoked, and no subsequent powers
of attorney, proxies or consents may be given (and, if given, will not be
deemed to be effective) with respect thereto. The designees of the Purchaser
will, with respect to the tendered securities, be empowered to exercise all
voting and other rights of such Holder as they in their sole discretion may
deem proper at any annual, special or adjourned meeting of the Company's
Stockholders, by written consent or otherwise. 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 of a record
and beneficial holder, including action by written consent, with respect to
such Shares.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tendered Shares or Warrants pursuant to any of the procedures described above
will be determined by the Purchaser, in its sole discretion, whose
determination shall be final and binding on all parties. The Purchaser
reserves the absolute right to reject any or all tenders of any Shares or
Warrants determined by it not to be in proper form or if the acceptance for
payment of, or payment for, such Shares or Warrants 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 Shares
or Warrants of any particular Holder, whether or not similar defects or
irregularities are waived in the case of other Holders. No tender of Shares or
Warrants will be deemed to have been validly made until all defects and
irregularities have been cured or waived. None of the Purchaser, Parent, the
Depositary, the Information Agent, the Dealer Manager or any other person will
be under any duty to give notification of any defects or irregularities in
tenders or will incur any liability for failure to give any such notification.
The Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be
final and binding on all parties.
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<PAGE>
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares and
Warrants made pursuant to the Offer are irrevocable, provided that such Shares
and Warrants tendered pursuant to the Offer may be withdrawn at any time prior
to the Expiration Date and, unless theretofore accepted for payment by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after
October 28, 1996.
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase. Any such
notice of withdrawal must specify the name of the person who tendered the
securities to be withdrawn, the number of Shares or Warrants to be withdrawn
and the name of the registered holder, if different from that of the person
who tendered such Shares or Warrants. If Certificates have been delivered or
otherwise identified to the Depositary, then, prior to the release of such
Certificates, the serial numbers of the particular Certificates evidencing the
Shares or Warrants to be withdrawn and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution, except in the case of Shares
or Warrants tendered for the account of an Eligible Institution, must also be
furnished to the Depositary as described above. If Shares have been tendered
pursuant to the procedures for book-entry transfer as set forth in Section 3,
any notice of withdrawal must also specify the name and number of the account
at the appropriate Book-Entry Transfer Facility to be credited with the
withdrawn Shares.
Withdrawals of Shares and Warrants may not be rescinded. Any Shares or
Warrants properly withdrawn will not be deemed to be validly tendered for
purposes of the Offer and the satisfaction of the Minimum Condition. Withdrawn
Shares or Warrants may, however, be retendered for purposes of the Offer by
following one of the procedures described in Section 3 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, whose determination will be final and binding on all parties. None
of the Purchaser, Parent, the Dealer Manager, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or incur any liability
for failure to give any such notification.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND THE MERGER
The following is a summary of certain federal income tax consequences of the
Offer and the Merger to Holders whose Shares or Warrants are purchased
pursuant to the Offer or whose Shares are converted, in accordance with the
Merger Agreement, into the right to receive the price per Share paid pursuant
to the Offer (the "Merger Consideration") (including any cash amounts received
by dissenting Stockholders pursuant to the exercise of appraisal rights). This
discussion is based upon the provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), the applicable Treasury Regulations promulgated and
proposed thereunder, judicial authority and administrative rulings and
practice. Legislative, judicial or administrative changes or interpretations
are subject to change, possibly on a retroactive basis, at any time and
therefore could alter or modify the statements and conclusions set forth
below. This discussion assumes that the Holders hold the Shares or Warrants,
as applicable, as "capital assets" within the meaning of Section 1221 of the
Code (i.e. property held for investment). This discussion does not address all
aspects of federal income taxation that may be relevant to a particular Holder
in light of such Holder's personal investment circumstances, or those Holders
subject to special treatment under the federal income tax laws (for example,
life insurance companies, tax-exempt organizations, foreign corporations and
nonresident alien individuals) or to Holders who acquired their Shares or
Warrants through the exercise of employee stock options or other compensation
arrangements. In addition, the discussion does not address any aspect of
foreign, state, local or estate and gift taxation that may be applicable to a
Holder.
Consequences of the Offer and the Merger to Holders. The receipt of the
Offer price and the Merger Consideration (including any cash amounts received
by dissenting Holders pursuant to the exercise of appraisal rights) will be a
taxable transaction for federal income tax purposes (and also may be a taxable
transaction under applicable state, local and other income tax laws). In
general, for federal income tax purposes, a Holder will
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<PAGE>
recognize gain or loss equal to the difference between his or her adjusted tax
basis in the Shares or Warrants sold pursuant to the Offer or converted to
cash in the Merger and the amount of cash received therefor. Gain or loss must
be determined separately for each block of Shares or Warrants (i.e. Shares or
Warrants acquired at the same cost in a single transaction) sold pursuant to
the Offer or converted to cash in the Merger. Such gain or loss will be
capital gain or loss and will be long-term gain or loss if, on the date of
sale (or, if applicable, the date of the Merger) the Shares or Warrants, as
applicable, were held for more than one year (other than with respect to the
exercise of appraisal rights, amounts, if any, which are or are deemed to be
interest for federal income tax purposes).
Backup Tax Withholding. Under the Code, a Holder may be subject, under
certain circumstances, to "backup withholding" at a 31% rate with respect to
payments made in connection with the Offer or the Merger. Backup withholding
generally applies if the Holder (i) fails to furnish his or her Social
Security Number or employer identification number ("TIN"), (ii) furnishes an
incorrect TIN, (iii) fails properly to report interest or dividends or (iv)
under certain circumstances, fails to provide a certified statement, signed
under penalties of perjury, that the TIN provided is his or her correct number
and that he or she is not subject to backup withholding. Backup withholding is
not an additional tax but merely an advance payment, which may be refunded to
the extent it results in an overpayment of tax. Certain persons generally are
exempt from backup withholding, including corporations and financial
institutions. Certain penalties apply for failure to furnish correct
information and for failure to include the reportable payments in income. Each
Holder should consult with his or her own tax advisor as to his or her
qualifications for exemption from withholding and the procedure for obtaining
such exemption. Foreign Holders should consult their own tax advisors
regarding withholding taxes in general.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION PURPOSES ONLY. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS TO
DETERMINE THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE OFFER
AND THE MERGER TO THEM IN VIEW OF THEIR OWN PARTICULAR CIRCUMSTANCES.
6. PRICE RANGE OF SHARES; DIVIDENDS
The Shares trade in the over-the-counter market and are quoted on the Nasdaq
National Market under the symbol YALE. The following table sets forth, for
each of the periods indicated, the reported high and low sales prices per
Share for the Shares on the Nasdaq National Market as published in financial
sources.
<TABLE>
<CAPTION>
HIGH LOW
------- ------
<S> <C> <C>
1994
First Quarter................................................. 10 3/4 9 7/8
Second Quarter................................................ 10 5/8 8
Third Quarter................................................. 8 7/8 7 1/8
Fourth Quarter................................................ 10 8
1995
First Quarter................................................. 10 1/16 8 3/8
Second Quarter................................................ 10 1/2 8 1/8
Third Quarter................................................. 9 3/4 7 3/4
Fourth Quarter................................................ 14 1/4 9
1996
First Quarter................................................. 15 1/2 13 1/2
Second Quarter................................................ 17 14 3/4
Third Quarter (through August 29, 1996),...................... 23 1/2 15
</TABLE>
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<PAGE>
On August 23, 1996, the last full trading day prior to the public
announcement of the execution of the Merger Agreement and the Purchaser's
intention to commence the Offer, the reported closing price per Share on the
Nasdaq National Market was $19 3/8.
On August 29, 1996, the last full trading day prior to the commencement of
the Offer, the reported closing sales price per Share on the Nasdaq National
Market was $23 7/16. The Warrants are not listed on any exchange or traded on
the Nasdaq National Market. As a result, no price quotations are available for
the Warrants.
According to the Company, the Company did not declare any cash dividends on
the Shares during the periods set forth above.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE ACT
REGISTRATION; MARGIN REGULATIONS
The purchase of Shares and Warrants pursuant to the Offer will reduce the
number of Shares and Warrants that might otherwise trade publicly and the
number of Holders of Shares and Warrants which could adversely affect the
liquidity and market value of the remaining Shares and Warrants held by
Holders other than the Purchaser. The Purchaser cannot predict whether the
reduction in the number of Shares and Warrants that might otherwise trade
publicly would have an adverse or beneficial effect on the market price for,
or marketability of, the Shares and Warrants or whether such reduction would
cause future market prices to be greater or less than the Offer price.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the standards of the National Association of
Securities Dealers, Inc. (the "NASD") for continued inclusion in the Nasdaq
National Market, which require that an issuer have at least 200,000 publicly
held shares with a market value of $1 million held by at least 400
stockholders or 300 stockholders holding round lots and have net tangible
assets of at least either $1 million, $2 million or $4 million 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 NASD's Nasdaq Stock Market with quotations published in the
Nasdaq over-the-counter "additional list" or in one of the "local lists", but
if the number of Stockholders were to fall below 300, or if the number of
publicly held Shares were to fall below 100,000, or if there are not at least
two registered and active market makers for such 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 an officer or director of the Company,
or by any beneficial owner of more than 10% of the Shares, ordinarily will not
be considered as being publicly held for this purpose. If, as a result of the
purchase of Shares pursuant to the Offer or otherwise, the Shares no longer
meet the NASD requirements for continued inclusion in the Nasdaq National
Market or in any other tier of the Nasdaq Stock Market, and the Shares are no
longer included in the Nasdaq National Market or any other tier of the Nasdaq
Stock Market, the market for such Shares could be adversely affected.
In the event the Shares no longer meet the requirements of the NASD for
inclusion in any tier of the Nasdaq Stock Market, quotations might still be
available from other sources. The extent of the public market for Shares and
availability of such quotations would, however, depend upon the number of
Stockholders of Shares remaining at such time, the interest in maintaining a
market in the Shares on the part of securities firms, the possible termination
of registration under the Exchange Act, as described below, and other factors.
The Shares are currently registered under the Exchange Act. The purchase of
the Shares pursuant to the Offer may result in the Shares becoming eligible
for deregistration under the Exchange Act. Registration of the Shares under
the Exchange Act may be terminated upon application of the Company to the
Commission if such class is not listed on a national securities exchange and
there are fewer than 300 record holders of such Shares. Termination of
registration of the Shares under the Exchange Act would reduce substantially
the information
9
<PAGE>
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 short-swing profit recovery provisions
of Section 16(b), the requirement of furnishing a proxy statement in
connection with Stockholders' meetings and the related requirement of an
annual report. If the Shares are no longer registered under the Exchange Act,
the requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions would no longer be applicable to the Company.
Furthermore, if the Purchaser acquires a substantial number of Shares or the
registration of the Shares under the Exchange Act were to be terminated, 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 under the Securities Act of 1933, as amended (the "Securities Act"),
may be impaired or eliminated. If registration of the Shares under the
Exchange Act were terminated, the Shares would no longer be "margin
securities" or be eligible for listing or Nasdaq reporting. It is the present
intention of the Purchaser to seek to cause the Company to make an application
for termination of registration of the Shares as soon as possible following
the consummation of the Offer if the requirements for termination of
registration are met.
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, following
the Offer it is possible that 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. In addition, if registration of the Shares under the Exchange Act
were terminated, the Shares would no longer constitute "margin securities."
The Warrants are not listed on any exchange or traded on the Nasdaq National
Market nor are such Warrants registered under the Exchange Act. The Warrants
are not "margin securities" under the regulations of the Federal Reserve
Board.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Delaware corporation, with its principal executive offices
located at 6805 Morrison Boulevard, Suite 450, One Morrocroft Centre,
Charlotte, North Carolina 28211, and, through its subsidiaries, produces a
wide range of industrial products, including hoists, scissor lifts, mechanical
jacks, rotating joints, actuators and circuit protection devices.
The Company was organized in Delaware in May 1987 by its then senior
management and Prudential-Bache Interfunding, Inc. In July 1987, the Company
acquired the Spreckels Sugar Company, Inc. ("Spreckels Sugar") and a portion
of the industrial products segment from Amstar Corporation in a leveraged
buyout. In December 1988, the Company purchased all of the stock of Yale
Industrial Products, Inc., a manufacturer of hoists and lifting equipment.
In October 1992, the Company commenced a case under Chapter 11 of the
Bankruptcy Code. On August 4, 1993, the Company's plan of reorganization (the
"Plan"), was confirmed by the Bankruptcy Court. The Plan became effective on
September 2, 1993. The Plan provided for the cancellation of all equity
interests in the Company in exchange for Shares and 2,850,000 Warrants . As
part of the Plan, the Company also issued its $70 million aggregate principal
amount of 11.5% Senior Secured Notes Due 2000 (the "Company Notes"), in
partial satisfaction of the claims of its bank creditors.
The Sweetener Segment (as defined below) has been in continuous operation
since 1898 and through Spreckels Sugar, a subsidiary of the Company, was a
major producer and marketer of refined sugar products in the western United
States. On November 13, 1995, the Company announced its intention to sell the
operations of Spreckels Sugar and Limestone Products Company, Inc., another
subsidiary of the Company (together with Spreckels Sugar, the "Sweetener
Segment"). On April 19, 1996, the Company completed the sale of all of the
issued and outstanding capital stock of the Sweetener Segment to Holly Sugar
Corporation in consideration of a payment of approximately $28.0 million in
cash and the assumption of $19 million in debt.
10
<PAGE>
The Company previously announced its intention to seek Stockholder approval
to change the name of the Company from Spreckels Industries, Inc. to Yale
International, Inc.
Selected Consolidated Financial Data. Set forth below is certain selected
consolidated financial data with respect to the Company and its consolidated
subsidiaries excerpted or derived from financial information contained in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1995
(the "Company Form 10-K"), with respect to income statement data for the
fiscal year ended June 30, 1996, the unaudited financial information of the
Company filed by the Company in its Current Report on Form 8-K dated August
26, 1996 and, with respect to balance sheet data at June 30, 1996, the
unaudited financial information provided by the Company to Purchaser. More
comprehensive financial information is included in the Company Form 10-K and
other documents filed by the Company with the Commission. The financial
information that follows is qualified in its entirety by reference to the
Company Form 10-K, and such other documents, including the financial
statements and related notes therein. The Company Form 10-K, and such other
documents should be available for inspection and copies thereof should be
obtainable from the offices of the Commission in the manner set forth below.
SPRECKELS INDUSTRIES, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL FISCAL ELEVEN
YEAR ENDED YEAR ENDED MONTHS ENDED
JUNE 30, 1996 JUNE 30, 1995(/1/) JUNE 30, 1994
------------- ------------------ -------------
(UNAUDITED)
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales...................... $ 186,967 $357,052 $349,577
Operating income from continu-
ing operations................ 19,129 5,531 14,677
Net income (loss) from continu-
ing operations................ 6,868 (2,140) 2,470
Net income (loss) per share
from continuing operations.... 1.14 (.35) .41
BALANCE SHEET DATA (AT THE END
OF THE PERIOD):
Total assets................... $ 160,539 $318,101 $309,213
Working capital................ 64,274 68,068 69,013
Total indebtedness............. 70,000 120,366 104,385
Total stockholders' equity..... 19,958 72,509 72,951
</TABLE>
- --------
(/1/Unaudited)balance sheet data amounts for this period have been
reclassified to reflect the disposition of the Company's Sweetener
Segment: Total assets--$222,659; Working capital--$125,745; Total
indebtedness--$80,616; and Total stockholders' equity--$72,509.
Projected Financial Information. During the course of discussions between
Parent, the Purchaser and the Company that led to the execution of the Merger
Agreement (see Section 11), the Company provided Parent with certain projected
financial data for the fiscal years ending June 30, 1997, June 30, 1998, June
30, 1999, and June 30, 2000 relating to the Company (the "Projections"). This
data was not prepared with a view to public disclosure or compliance with
published guidelines of the Commission or the guidelines established by the
American Institute of Certified Public Accountants regarding projections, and
is included in this Offer to Purchase only because it was provided to Parent.
None of Parent, the Purchaser, the Company or any of their financial advisors
or any of their respective directors or officers assumes any responsibility
for the accuracy of the Projections. The Company's independent auditors have
not examined or compiled the Projections presented herein and, accordingly,
assume no responsibility for them. In addition, because the estimates and
assumptions, underlying the Projections are inherently subject to significant
economic and competitive uncertainties and contingencies which are difficult
or impossible to predict and are beyond Parent's, the Purchaser's and the
Company's control, there can be no assurance that the Projections will be
realized. Accordingly, it is expected
11
<PAGE>
that there will be differences between the actual and projected results, and
actual results may be materially higher or lower than those set forth below.
The following information has been excerpted from the materials presented by
the Company to Parent and the Purchaser:
SPRECKELS INDUSTRIES, INC.
MANAGEMENT PROJECTIONS DATED AUGUST 14, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PROJECTED FISCAL YEAR ENDED JUNE 30,
---------------------------------------
1997 1998 1999 2000
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues............................... $ 201,093 $ 217,180 $ 234,555 $ 253,319
Cost of goods sold..................... 138,087 146,250 156,861 168,274
Depreciation........................... 3,072 3,820 4,628 5,501
--------- --------- --------- ---------
Gross profit........................... 59,934 67,110 73,066 79,544
SG&A expense........................... 32,909 34,225 35,594 37,018
Goodwill amortization.................. 2,141 2,141 2,141 2,141
--------- --------- --------- ---------
Operating earnings..................... 24,884 30,744 35,331 40,385
Corporate overhead/other expenses...... 4,516 4,552 4,803 5,052
--------- --------- --------- ---------
Earnings before interest and taxes..... 20,368 26,192 30,528 35,333
Interest expense....................... 8,100 6,745 3,797 426
--------- --------- --------- ---------
Pre-tax income......................... 12,268 19,447 26,731 34,907
Income tax............................. 5,349 8,475 11,389 14,659
--------- --------- --------- ---------
After-tax net income................... $ 6,919 $ 10,972 $ 15,342 $ 20,248
========= ========= ========= =========
</TABLE>
Other Information. The Company is subject to the information filing
requirements of the Exchange Act and, in accordance therewith, is required to
file periodic reports, proxy statements and other information with the
Commission relating to its business, financial condition and other matters.
Information, as of particular dates, concerning the Company's directors and
officers, their remuneration, stock options granted to them, the principal
holders of the Company's securities, any material interests of such persons in
transactions with the Company and other matters is required to be described in
proxy statements distributed to the Company's Stockholders and filed with the
Commission. These reports, proxy statements and other information should be
available for inspection at the public reference facilities of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549, and should also be
available for inspection and copying at prescribed rates at the regional
offices of the Commission located at Seven World Trade Center, 13th Floor, New
York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of this material may also be obtained by mail,
upon payment of the Commission's customary fees, from the Commission's
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a site on the World Wide Web at http://www.sec.gov
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
Except as otherwise noted in this Offer to Purchase, all of the information
concerning the Company contained in this Offer to Purchase, including
financial information, has been taken from or based upon publicly available
documents and records on file with the Commission and other publicly available
information. Although neither the Purchaser nor Parent has any knowledge that
any such information is untrue, neither the Purchaser nor Parent nor the
Dealer Manager 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 or may affect the significance or accuracy of such information.
12
<PAGE>
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT
The Purchaser is a newly incorporated Delaware corporation and a wholly
owned subsidiary of Parent. To date, the Purchaser has not conducted any
business other than in connection with the Offer. Until immediately prior to
the time the Purchaser purchases Shares and Warrants pursuant to the Offer, it
is not anticipated that the Purchaser will have any significant assets or
liabilities or engage in activities other than those incident to its formation
and capitalization and the transactions contemplated by the Offer. Because the
Purchaser is a newly formed corporation and has minimal assets and
capitalization, no meaningful financial information regarding the Purchaser is
available.
Parent, established in 1875, designs, manufactures and distributes a broad
range of material handling, lifting and positioning products. Parent's
products are sold to distributors and end-users for various applications in
the general manufacturing, crane building, mining, construction,
transportation, entertainment, power generation, waste management,
agriculture, marine and other markets, and to hardware distributors, mass
merchandisers and rental outlets for consumer use. Parent's total sales in its
fiscal year ending March 31, 1996 were approximately $209.8 million, of which
commercial sales and consumer sales accounted for approximately $184.2 million
and $25.6 million, respectively.
Parent's specific product offerings include the following. Hoist products
are sold under its Budgit(R), Chester(TM), Cyclone(R), Lodestar(R), Meteor(R),
Puller(TM), Shaw-Box(R), Valustar(R), and other recognized trademarks. A line
of Parent's alloy chain is sold under the Herc-Alloy(R) brand name for use in
overhead lifting, pulling and restraining applications. Parent also sells
specialized load chain for use in hoists, and carbon steel welded-link chain
which is used for various load securement and other non-overhead lifting
applications. Parent's alloy and carbon steel forging product offerings
include hooks, shackles, hitch pins, master links and loadbinders. Operator-
controlled manipulators and tire shredders complete the Parent's list of
product categories.
The name, citizenship, business address, principal occupation or employment
and five year employment history of each of the directors and executive
officers of the Purchaser and Parent are set forth in Schedule I hereto. The
principal executive offices of Parent and the Purchaser are located at 140
John James Audubon Parkway, Amherst, New York 14228-1197.
13
<PAGE>
Set forth below is a summary of certain consolidated financial information
with respect to Parent and its consolidated subsidiaries excerpted or derived
from the information contained in or incorporated by reference in Parent's
Annual Report on Form 10-K for the year ended March 31, 1996 (the "Parent 10-
K"), and Parent's Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 1996 (the "Parent 10-Q"), in each case filed with the Commission by
Parent. More comprehensive financial information is included in or
incorporated by reference in the Parent 10-K, the Parent 10-Q and other
documents filed by Parent with the Commission, and the financial information
summary set forth below is qualified in its entirety by reference to the
Parent 10-K, the Parent 10-Q and such other documents and all the financial
information and related notes contained therein.
<TABLE>
<CAPTION>
COLUMBUS MCKINNON CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FISCAL YEAR ENDED THREE MONTHS ENDED
-------------------------------------------- --------------------------
MARCH 31, 1996 MARCH 31, 1995 MARCH 31, 1994 JUNE 30, 1996 JULY 2, 1995
-------------- -------------- -------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net sales............... $ 209,837 $ 172,330 $ 142,313 $ 65,735 $ 44,532
Income from operations.. 25,802 18,276 12,420 8,681 5,343
Income before cumulative
effect of accounting
change................. 12,987 10,504 6,028 5,032 3,002
Net income.............. 12,987 10,504 7,029 5,032 3,002
Earnings per share,
primary & fully
diluted/1/:
Income before cumulative
effect of accounting
change................. $ 1.69 $ 1.48 $ 0.85 $ 0.38 $ 0.43
Cumulative effect of
accounting change...... 0.00 0.00 0.14 0.00 0.00
-------------- -------------- -------------- ------------- ------------
Net income.............. $ 1.69 $ 1.48 $ 0.99 $ 0.38 $ 0.43
============== ============== ============== ============= ============
Cash dividends per
common share/1/........ $ 0.24 $ 0.21 $ 0.18 $ 0.06 $ 0.06
============== ============== ============== ============= ============
AS OF AS OF AS OF AS OF AS OF
MARCH 31, 1996 MARCH 31, 1995 MARCH 31, 1994 JUNE 30, 1996 JULY 2, 1995
-------------- -------------- -------------- ------------- ------------
CONDENSED BALANCE SHEET DATA:
Total assets............ $ 188,734 $ 97,822 $ 93,378 $ 190,273 $ 98,445
Total assets less
goodwill and other
intangibles, net....... 145,783 96,483 91,797 147,693 97,105
Working capital......... 64,458 32,106 25,146 67,643 33,336
Total indebtedness...... 11,379 27,142 31,880 9,651 28,359
Shareholders' equity.... 137,622 40,850 32,464 142,193 43,859
</TABLE>
- -------
/1/Reflects a 17 to 1 stock split effected on February 15, 1996.
Parent is subject to the informational filing requirements of the Exchange
Act and 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 Parent's directors and officers, their
remuneration, the principal holder of Parent's securities and any material
interest of such persons in transactions with Parent is required to be
described in periodic statements filed with the Commission. Such reports and
other information, including the Parent 10-K and the Parent 10-Q, may be
inspected and copies may be obtained from the offices of the Commission in the
same manner as set forth in Section 8.
Except as set forth in this Offer to Purchase, none of Parent, the Purchaser
or any of their affiliates (collectively, the "Purchaser Entities"), nor, to
the best knowledge of any of the Purchaser Entities, any of the persons listed
on Schedule I, has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company,
including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any securities of the
Company, joint ventures, loan or option arrangements,
14
<PAGE>
puts or calls, guarantees of loans, guarantees against loss or the giving or
withholding of proxies. Except as set forth in this Offer to Purchase, none of
the Purchaser Entities, nor, to the best knowledge of any of the Purchaser
Entities, any of the persons listed on Schedule I, has had, since July 1,
1993, any business relationships or transactions with the Company or any of
its executive officers, directors or affiliates that would require reporting
under the rules of the Commission. Except as set forth in this Offer to
Purchase, since July 1, 1993, there have been no contacts, negotiations or
transactions between the Purchaser Entities, or their respective subsidiaries
or, to the best knowledge of any of the Purchaser Entities, any of the persons
listed on Schedule I, and the Company or its affiliates, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
election of directors or a sale or other transfer of a material amount of
assets.
Except as set forth in this Offer to Purchase, during the last five years,
none of the Purchaser Entities, nor, to the best knowledge of any of the
Purchaser Entities, any of the persons listed in Schedule I hereto, (i) has
been convicted in a criminal proceeding (excluding traffic violations and
similar misdemeanors) or (ii) 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.
Except as set forth in this Offer to Purchase, none of the Purchaser
Entities, nor, to the best knowledge of the Purchaser Entities, any of the
persons listed on Schedule I hereto, beneficially owns any equity securities
of the Company. Except as set forth in this Offer to Purchase, none of the
Purchaser Entities, nor, to the best knowledge of the Purchaser Entities, any
of the persons listed on Schedule I, beneficially owns any Shares or has
effected any transaction in such equity securities during the past 60 days.
10. SOURCE AND AMOUNTS OF FUNDS
The total amount of funds required by the Purchaser to consummate the Offer
and the Merger and to pay fees and expenses related to the Offer and the
Merger is estimated to be approximately $205 million. Parent intends to obtain
the funds primarily from loans to be provided by Fleet Bank. It is anticipated
that Fleet Bank will, with the assistance of the Purchaser and Parent,
syndicate the loans to a group of commercial banks (together with Fleet Bank,
the "Banks"). It is also expected that Fleet Bank will provide loans
aggregating $125 million (i) to refinance the purchase of the Company Notes
(as described below) and (ii) to finance the consolidated working capital
needs of Parent and its subsidiaries, including the Company, following the
closing of the Offer. All of the foregoing loans will be fully and
unconditionally guaranteed by the Parent and all of its significant
subsidiaries. The loans to be provided by the Banks are collectively referred
to as the "Bank Financing."
Set forth below is a summary description of the Bank Financing. Consummation
of the Bank Financing is subject to, among other things, the negotiation,
execution and delivery of definitive financing agreements on terms
satisfactory to Fleet Bank and Parent (the "Bank Financing Agreements"). The
summary description does not purport to be complete, and there can be no
assurance that the terms set forth below will be contained in such agreements
or that such agreements will not contain additional provisions.
Pursuant to a commitment letter, dated August 23, 1996 (the "Commitment
Letter"), Fleet Bank has committed to provide up to $325 million of the Bank
Financing. Parent and Fleet Bank have agreed that Fleet Bank will act as sole
administrative agent (the "Administrative Agent"), for an anticipated
commercial bank syndicate.
The Bank Financing, will consist of up to $325 million at any time
outstanding, apportioned as follows:
(i) Up to $125 million as a five year senior revolving loan (the
"Revolving Facility"), with a sublimit for standby and trade letters of
credit in an amount to be agreed upon between Fleet Bank and Parent
("Letters of Credit"), $75 million of which shall be available solely to
finance the repurchase of the Company Notes pursuant to the change of
control provision (as described below);
(ii) $125 million as a five year senior tranche A term loan (the "Term A
Facility"); and
15
<PAGE>
(iii) $75 million as a seven year senior tranche B term loan (the "Term B
Facility" and, together with the Revolving Facility and the Term A
Facility, the "Credit Facilities"). The Term A Facility and Term B Facility
are collectively referred to as the "Term Facilities."
Loans under the Revolving Facility may be made, and Letters of Credit may be
issued, at any time during the period from the date of the execution and
delivery of definitive financing agreements to the fifth anniversary thereof.
No trade Letter of Credit will expire more than 180 days after the date of
issuance thereof. No standby Letter of Credit will expire more than 365 days
after the date of issuance thereof and no Letter of Credit will expire within
60 days prior to the maturity date of the Revolving Facility.
Revolving and term loans under the Credit Facilities will bear interest, at
the option of Parent, at (i) a rate equal to the higher of the rate announced
from time to time by Fleet Bank as its prime rate or a rate equal to the
Federal Funds rate plus 0.5% ("Prime Rate"); or (ii) the London interbank
offered rate ("LIBOR Rate") for one-, two-, three-, or six-month periods plus
an interest rate margin with respect to the Revolving Facility and Term A
Facility of 1.25% per annum for Prime Rate borrowings and 2.50% per annum for
LIBOR Rate borrowings, and with respect to the Term B Facility, 1.75% per
annum for Prime Rate borrowings and 3.00% per annum for LIBOR Rate borrowings.
The interest rate margins on the Credit Facilities are subject to step-up and
step-down adjustments to be agreed upon between Fleet Bank and Parent based on
certain consolidated financial targets to be specified in the Bank Financing
Agreements. Interest will be payable monthly in arrears, based on a 360-day
year and the actual number of days elapsed on Prime Rate borrowings and
quarterly in arrears or at the end of the relevant interest period, whichever
is sooner, for LIBOR Rate borrowings. Overdue principal, interest, fees and
other amounts owing will bear interest at 2.0% over the rate otherwise
applicable thereto.
Any obligations of the Purchaser under the Credit Facilities will be
unconditionally and irrevocably guaranteed by Parent, and certain of Parent's
subsidiaries and certain of the Company's subsidiaries. The obligations of
Parent and the Purchaser under the Credit Facilities and the guarantee thereof
will be secured by a perfected first priority (subject to certain exceptions
to be set forth in the Bank Financing Agreements) lien and security interest
in (i) all present and future personal property and assets of Parent and the
guarantors, (ii) all shares of capital stock of certain of Parent's present
and future domestic subsidiaries and certain foreign subsidiaries, subject,
however, to any limitations on liens imposed by the Company Notes. In
addition, the Bank Financing Agreements will contain a negative pledge on
certain assets of Parent and its subsidiaries.
The Term A Facility and the Term B Facility will be available in one drawing
on or before the date on which the Offer is consummated. The Revolving
Facility will be available in multiple drawings from time to time.
Availability under the Revolving Facility will be subject to a borrowing base
comprised of eligible receivables and eligible inventory (to be defined in the
Bank Financing Agreements.) The Term A Facility and the Term B Facility will
be repayable in consecutive quarterly installments in amounts to be agreed
upon between Fleet Bank and Parent. The Revolving Facility will be fully
revolving until final maturity on the fifth anniversary of the Closing Date.
All or a portion of the outstanding Credit Facilities may be prepaid at the
option of Parent at any time with respect to Prime Rate borrowings and on the
last day of the applicable interest period for any LIBOR Rate borrowings.
Mandatory prepayments are required from (a) the net-after-tax proceeds of
certain sales of assets of Parent and its subsidiaries, (b) certain
extraordinary receipts, or 50% of the net cash proceeds of certain additional
issuances of equity of Parent and its subsidiaries, or 75% of excess cash flow
of Parent and its subsidiaries. Such percentages are subject to adjustment
based on Parent meeting certain financial tests. All prepayments will be
applied first, ratably to the Term A Facility and Term B Facility, and to the
principal repayment installments of each of the Term Facilities in inverse
order of maturity; and, second, to the extent that no loans under the Term
Facilities remain outstanding, to permanently reduce the Revolving Facility.
Parent may terminate, in whole or reduce ratably in part, the unused portion
of the Revolving Facility, subject to certain conditions.
16
<PAGE>
There is approximately $70 million outstanding principal amount of Company
Notes. Following consummation of the Offer (provided that Parent is then the
beneficial owner of at least 50% of the outstanding Shares), each holder of
Company Notes will have the right to demand that the Company repurchase the
holder's Company Notes at 101% (100% on and after September 1, 1998) of their
principal amount, plus accrued interest, within 90 days of the consummation of
the Offer. Parent believes that if Parent were in control of the Company, the
Bank Financing would provide adequate funds in the event the holders of the
Company Notes were to demand payment under these provisions.
The Commitment Letter also provides for the payment to Fleet Bank of fees
customary for commitments of the types described herein, including commitment
fees, facility fees, letter of credit fees, syndication fees and expenses and
annual administrative agent's fees. All such fees are non-refundable. In
connection with the Commitment Letter, Parent has agreed to indemnify Fleet
Bank and the Banks against certain liabilities.
Each Bank's obligation to make loans under the Credit Facilities will be
subject to, among other things, the negotiation, execution and delivery of the
Bank Financing Agreements and the compliance by Parent, the Purchaser and the
Company with conditions and covenants contained therein. The covenants in the
Bank Financing Agreements will include, but not be limited to, covenants
limiting the ability of Parent and certain of its subsidiaries to encumber
certain of their assets or to enter into certain sale-leaseback transactions,
a covenant not to exceed a funded debt to cash flow ratio, covenants to
maintain a minimum fixed charge coverage ratio and interest coverage ratio,
and a covenant to maintain a minimum net worth. It is anticipated that the
Bank Financing Agreements will include terms, conditions, representations,
warranties, covenants, indemnities, events of default, and other provisions
customary in such agreements.
The foregoing summary is qualified in its entirety by reference to the text
of the Commitment Letter which was filed as an exhibit to the Purchaser's
Tender Offer Statement on Schedule 14D-1 and is incorporated herein by
reference.
11. BACKGROUND OF THE OFFER
In early July 1996, Bear Stearns contacted Herbert P. Ladds, Jr., Chief
Executive Officer of Parent, to determine whether Parent had an interest in
pursuing an acquisition of the Company. On July 10, 1996, Mr. Ladds,
representatives of Bear Stearns, Bart A. Brown, Chairman of the Board of the
Company, and Gary L. Tessitore and Donald C. Roof, the Chief Executive Officer
and Chief Financial Officer of the Company, respectively, met and engaged in a
general discussion regarding the Company and its prospects and the possibility
of a transaction between Parent and the Company. Following such meeting,
executive officers of Parent reviewed certain publicly available information
regarding the Company to determine the possible benefits of an acquisition.
On July 29, 1996, Parent and the Company entered into a confidentiality
agreement (the "Confidentiality Agreement"), which provided, among other
things, that any information furnished by the Company to Parent or its
representatives would be held in confidence. On that date, Mr. Ladds and
Robert L. Montgomery, Jr., Chief Financial Officer of Parent, met with Messrs.
Tessitore and Roof, to further discuss Parent's interest in acquiring the
Company and to conduct due diligence. Shortly after this meeting, Mr. Ladds,
together with members of Parent's senior management, met with certain members
of the Company's senior management to discuss further the Company's businesses
and operations, including certain internal estimates regarding the Company's
future performance. See Section 8.
On August 19, 1996, management of Parent indicated to management of the
Company the interest of Parent in pursuing an acquisition of the Company.
On August 20, 1996, a meeting was held with members of the management of
Parent and the Company, together with their respective financial and legal
advisors, to discuss a possible acquisition of the Company. From August 20,
1996 through August 23, 1996, representatives of Parent and the Company and
their respective
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advisors negotiated the terms of the Merger Agreement and, contemporaneously
with such negotiations, Parent and its legal counsel conducted additional due
diligence with respect to the Company.
On August 23, 1996, the Board of Directors of Parent met and approved the
proposed transaction and the Merger Agreement. The Merger Agreement was
executed on August 24, 1996. On August 26, 1996, Parent and the Company
publicly announced the transaction.
12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY; PROPOSED MERGER; RIGHTS
AGREEMENT
PURPOSE OF THE OFFER. The purpose of the Offer is for the Purchaser to
acquire control of, and an equity interest in, the Company. The Purchaser
intends to acquire all outstanding Shares not tendered and purchased pursuant
to the Offer. The acquisition of the entire equity interest in the Company has
been structured as a cash tender offer followed by a cash merger in order to
provide a prompt and orderly transfer of ownership of the Company from the
public Stockholders to Parent and to provide Stockholders with cash for all
their Shares. The purchase of Shares pursuant to the Offer will increase the
likelihood that the Merger will be effected.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OR A
SOLICITATION OF CALLS FOR A SPECIAL MEETING OF THE COMPANY'S STOCKHOLDERS. ANY
SUCH SOLICITATION WHICH THE PARENT OR THE PURCHASER MIGHT MAKE WOULD BE MADE
ONLY PURSUANT TO SEPARATE PROXY OR SOLICITATION MATERIALS COMPLYING WITH THE
REQUIREMENTS OF SECTION 14(A) OF THE EXCHANGE ACT, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER.
PLANS FOR THE COMPANY. Except as otherwise set forth in this Offer to
Purchase, it is expected that, initially following the Merger, the business
and operations of the Company will be continued by the Surviving Corporation
substantially as they are being conducted. Initially upon consummation of the
Merger (the "Effective Time"), the directors of the Purchaser will be the
directors of the Surviving Corporation and the officers of the Company
immediately prior to the Effective Time will be the officers of the Surviving
Corporation.
The Parent will continue to evaluate the business and operations of the
Company during the pendency of the Offer and after the consummation of the
Offer and the Merger, and will take such actions as it deems appropriate under
the circumstances then existing. The Parent intends to seek additional
information about the Company during this period. Thereafter, the Parent
intends to review such information as part of a comprehensive review of the
Company's business, operations, capitalization and management with a view to
optimizing the Company's potential in conjunction with the business of Parent.
Except as described in this Offer to Purchase, neither Parent nor the
Purchaser has any present plans or proposals that would relate to or would
result in (i) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any of its
subsidiaries, (ii) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries, (iii) any other material change in the
Company's corporate structure or business, (iv) causing a class of securities
of the Company to be delisted from a national securities exchange or to cease
to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association or (v) a class of equity securities
of the Company becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Exchange Act.
PROPOSED MERGER.
The Merger Agreement. The following is a summary of certain provisions of
the Merger Agreement, a copy of which has been filed as an exhibit to the
Schedule 14D-1 filed by the Purchaser with the Commission and is available for
copying and inspection at the Commission in the manner set forth in Section 8.
Such summary is qualified in its entirety by reference to the Merger
Agreement.
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The Offer. The Merger Agreement provides for the making of the Offer by the
Purchaser. The obligation of Purchaser to accept for payment and pay for
Shares tendered pursuant to the Offer is subject to the satisfaction of the
Minimum Condition and certain other conditions that are described in Section
14. The Purchaser has agreed that, without the written consent of the Company,
no change in the Offer may be made which changes the form of consideration to
be paid or decreases the price per Share or the number of Shares or Warrants
sought in the Offer or which imposes conditions to the Offer in addition to
the Minimum Condition and those conditions described in Section 14. The
Purchaser may extend the Offer up to the tenth business day after the later of
(i) the tenth business day after the initial expiration date of the Offer and
(ii) the date on which all such conditions shall first have been satisfied or
waived.
The Merger. The Merger Agreement provides that, following the purchase of
Shares and Warrants pursuant to the Offer, the approval of the Merger
Agreement by the Stockholders of the Company and the satisfaction or waiver of
the other conditions to the Merger, the Purchaser will be merged with and into
the Company. The Merger shall become effective at such time as a certificate
of merger is filed with the Secretary of State of the State of Delaware, or at
such later time as is specified in such certificate of merger (the "Effective
Time"). As a result of the Merger, all of the properties, rights, privileges,
immunities, powers and franchises of the Company and the Purchaser shall vest
in the Surviving Corporation, and all debts, liabilities and duties of the
Company and the Purchaser shall become the debts, liabilities and duties of
the Surviving Corporation.
At the Effective Time, (i) each issued and outstanding Share held in the
treasury of the Company, by any of the Company's subsidiaries or by Parent,
the Purchaser or any other subsidiary of Parent shall be cancelled, and no
payment shall be made with respect thereto; (ii) each share of common stock of
the Purchaser then issued and outstanding immediately prior to the Effective
Time shall be converted into and become one validly issued, fully paid and
nonassessable share of identical common, preferred or other capital stock of
the Surviving Corporation; and (iii) each Share issued and outstanding
immediately prior to the Effective Time shall, except as otherwise provided in
(i) above and except for Shares held by any Stockholder who has not voted in
favor of the Merger or consented thereto in writing and who has demanded
appraisal for such Shares in accordance with Section 262 of the DGCL, be
converted into the right to receive $24.00 in cash or any higher price per
Share that may be paid pursuant to the Offer, without interest.
The Merger Agreement provides that the restated certificate of incorporation
of the Company at the Effective Time will be the certificate of incorporation
of the Surviving Corporation. The by-laws of the Purchaser at the Effective
Time will be the by-laws of the Surviving Corporation. The Merger Agreement
also provides that the initial directors of the Purchaser at the Effective
Time will be the directors of the Surviving Corporation and the initial
officers of the Company at the Effective Time will be the officers of the
Surviving Corporation.
Dissenting Shares. Shares that are outstanding immediately prior to the
Effective Time and which are held by Stockholders who shall not have voted in
favor of the Merger or consented thereto in writing and who shall have
demanded properly in writing appraisal for such Shares in accordance with
Section 262 of the DGCL (collectively, the "Dissenting Shares"), shall not be
converted into or represent the right to receive the Merger Consideration.
Such Shares instead will, from and after the Effective Time, represent only
the right to receive payment of the appraised value of such Shares held by
them in accordance with the provisions of such Section 262, except that all
Dissenting Shares held by Stockholders who shall have failed to perfect or who
effectively shall have withdrawn or lost their rights to appraisal of such
Shares under such Section 262 shall thereupon be deemed to have been converted
into and to have become exchangeable, as of the Effective Time, for the right
to receive, without any interest thereon, the Merger Consideration upon
surrender, in the manner provided in the Merger Agreement, of the Certificate
or Certificates that, immediately prior to the Effective Time, evidenced such
Shares.
Recommendation. The Board of Directors has (i) unanimously determined that
the Merger Agreement and the transactions contemplated thereby, including the
Offer and the Merger, are fair to and in the best interests of the Holders,
(ii) unanimously approved the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger and (iii) unanimously
resolved to recommend that the Holders accept the
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Offer, tender their Shares and Warrants to the Purchaser and approve the
Merger Agreement and the transactions contemplated thereby.
Stockholders' Meeting. The Merger Agreement provides that the Company shall,
if required in accordance with applicable law and the Company's Restated
Certificate of Incorporation and by-laws, duly call, give notice of, convene
and hold a special meeting of its Stockholders as soon as practicable
following consummation of the Offer for the purpose of considering and taking
action on the Merger Agreement and the transactions contemplated hereby and
the Company shall include in the proxy statement the recommendation of the
Board of Directors that the Stockholders vote in favor of the approval of the
Merger Agreement and the transactions contemplated thereby. If required by
applicable law, as soon as practicable following Parent's reasonable request,
the Company will file with the Commission a proxy statement. The Company
agrees to use its reasonable efforts to respond to all Commission comments
with respect to the proxy statement and to cause the proxy statement to be
mailed to the Holders at the earliest practicable time.
Notwithstanding the preceding paragraph, in the event that the Purchaser
shall acquire at least 90% of the outstanding Shares in the Offer, the Company
has agreed, at the request of the Purchaser, to take all necessary and
appropriate action to cause the Merger to become effective, as soon as
reasonably practicable after such acquisition, without a meeting of
Stockholders, in accordance with Section 253 of the DGCL.
Interim Agreements of Parent, the Purchaser and the Company. Pursuant to the
Merger Agreement, the Company has covenanted and agreed that, during the
period from the date of the Merger Agreement until such time as Parent or the
Purchaser shall beneficially own a majority of the Shares, the Company and its
subsidiaries will each conduct its operations according to its ordinary and
usual course of business consistent with past practice. Pursuant to the Merger
Agreement, without limiting the generality of the foregoing, and except as
otherwise expressly provided in the Merger Agreement, prior to the Effective
Time, neither the Company nor any of its subsidiaries will, without the prior
written consent of Parent: (a) amend or propose to amend its certificate of
incorporation or by-laws; (b) issue, deliver, sell, pledge, dispose of or
encumber, or authorize or commit to the issuance, sale, pledge, disposition or
encumbrance of, (i) any shares of capital stock of any class, or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of capital stock, or any other ownership interest (including but not
limited to stock appreciation rights or phantom stock), of the Company or any
of its subsidiaries (except for the issuance of up to an aggregate of 604,894
shares of Class A Common Stock (less any shares of Class A Common Stock issued
upon the exercise of employee options since August 21, 1996) issuable in
accordance with the terms of employee options outstanding as of August 23,
1996 and the Warrants) or (ii) any assets of the Company or any of its
subsidiaries, except, in the case of this clause (iii), in the ordinary course
of business; (c) declare, set aside or pay any dividend or other distribution;
(d) reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock; (e) (i) acquire (by
merger, consolidation, or acquisition of stock or assets or otherwise) any
corporation, partnership or other business organization or division thereof,
(ii) incur any indebtedness for borrowed money or issue any debt securities or
assume, guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any person, or make any loans, advances or
capital contributions to, or investments in, any other person, except for such
of the foregoing incurred in the ordinary course of business; or (iii) enter
into or amend any contract, agreement, commitment or arrangement with respect
to the foregoing; (f) (i) except with respect to collective bargaining
agreements entered into in accordance with clause (ii) below and except as may
be required by law or as contemplated by the Merger Agreement, enter into,
adopt or amend or terminate any bonus, profit sharing, compensation,
severance, termination, stock option, stock appreciation right, restricted
stock, performance unit, stock equivalent, stock purchase agreement, pension,
retirement, deferred compensation, employment, severance or other employee
benefit agreement, trust, plan, fund or other arrangement for the benefit or
welfare of any director, officer or employee in any manner, or (except for
normal increases in the ordinary course of business consistent with past
practice that, in the aggregate, do not result in a material increase in
benefits or compensation expense to the Company, and as required under
existing agreements or in the ordinary course of business generally consistent
with past practice) increase in any manner the compensation or fringe benefits
of any director, officer or employee or pay any benefit not required by any
plan
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and arrangement as in effect as of the date of the Merger Agreement
(including, without limitation, the granting of stock appreciation right or
performance unit) or (ii) enter into any collective bargaining agreement with
any union after the date hereof that would have or constitute a material
adverse effect on the business, assets, financial condition or results of
operations of the Company and its subsidiaries taken as a whole after the date
of the Merger Agreement; (g) acquire, sell, lease or dispose of any assets
outside the ordinary course of business or any assets which in the aggregate
are material to the Company and its subsidiaries taken as a whole, or enter
into any commitment or transaction outside the ordinary course of business
consistent with past practice which would be material to the Company and its
subsidiaries taken as a whole; (h) except as may be required as a result of a
change in law or in generally accepted accounting principles, change any of
the accounting principles or practices used by it; (i) revalue in any material
respect any of its assets, including, without limitation, writing down the
value of inventory or writing off notes or accounts receivable other than in
the ordinary course of business; (j) authorize any new capital expenditure or
expenditures which, individually, is in excess of $1,000,000 or in the
aggregate, are in excess of $10,000,000; (k) make any tax election or settle
or compromise any tax liability material to the Company and its subsidiaries
taken as whole; (l) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise) other than the payment, discharge or satisfaction in the ordinary
course of business of liabilities reflected or reserved against in, or
contemplated by, the consolidated financial statements (or the notes thereto)
of the Company and its subsidiaries or incurred in the ordinary course of
business consistent with past practice; (m) settle or compromise any pending
or threatened suit, action or claim relating to the transactions contemplated
by the Merger Agreement; (n) permit any insurance policy naming it as a
beneficiary or loss-payable payee to be cancelled or terminated except in the
ordinary and usual course of business; (o) enter into any material joint
venture agreement, acquisition agreement or partnership agreement; (p) enter
into any material arrangement, agreement or contract with respect to any
assets or otherwise that, individually or in the aggregate with other material
agreements and contracts entered into after the date of the Merger Agreement,
would have or constitute a material adverse effect on the business, assets,
financial condition or results of operations of the Company and its
subsidiaries taken as a whole after the date of the Merger Agreement; or (q)
enter into any agreement to take any of the actions described above.
Other Agreements of Parent, the Purchaser and the Company. Pursuant to the
Merger Agreement, Parent and the Purchaser will each hold and will each cause
its officers, employees, auditors and other agents to hold in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all documents and information concerning the Company and
its subsidiaries furnished to Parent or the Purchaser in connection with the
transactions contemplated by the Merger Agreement (except to the extent that
such information can be shown to have been (i) previously known by Parent or
the Purchaser from sources other than the Company, or its directors, officers,
auditors or other agents, (ii) in the public domain through no fault of Parent
or the Purchaser or (iii) later lawfully acquired by Parent or the Purchaser
from other sources who are not known by Parent or the Purchaser to be bound by
a confidentiality agreement (after inquiry of such sources) or otherwise
prohibited from transmitting the information to Parent or the Purchaser (by a
contractual, legal or fiduciary obligation) and will not release or disclose
such information to any other person, except its auditors and other advisors
who need to know such information.
The Merger Agreement provides that, the Company, its affiliates and their
respective officers, directors, employees, representatives and agents shall
immediately cease any existing discussions or negotiations, if any, with any
parties conducted prior to the date of the Merger Agreement with respect to
any acquisition or exchange of all or any material portion of the assets of,
any equity interest in, or any merger, reorganization, consolidation, or
business combination or similar transaction involving the Company or any of
its subsidiaries or any proposal with respect thereto (an "Acquisition
Proposal"). Neither the Company nor any of its affiliates, nor any of its or
their respective officers, directors, employees, representatives or agents,
shall, directly or indirectly, encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than Parent
and the Purchaser, any affiliate or associate of Parent and the Purchaser or
any designees of Parent or the Purchaser) concerning an Acquisition Proposal.
Notwithstanding the preceding sentence, if, upon the advice of counsel and its
financial advisor, the Board of Directors determines in good faith that
failing to take any of the following actions would constitute a breach of the
Board of Directors' fiduciary duty under applicable law, the Company may,
directly or indirectly, (i) furnish
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information and access, in each case only in response to a request for such
information or access to any person made after the date hereof which was not
encouraged, solicited or initiated by the Company or any of its affiliates or
any of its or their respective officers, directors, employees, representatives
or agents after the date hereof, pursuant to appropriate confidentiality
agreements, and (ii) participate in discussions and negotiate with such entity
or group concerning an Acquisition Proposal if such entity or group has
submitted a written proposal to the Board of Directors relating to any such
Acquisition Proposal. The Board of Directors shall provide a copy and/or terms
of any Acquisition Proposal (whether oral or written) to Parent immediately
after receipt thereof, unless the Board of Directors determines that providing
such a copy and/or terms would constitute a breach of the Board of Directors'
fiduciary duty under applicable law. Notwithstanding the foregoing, the
Company shall notify Parent immediately if any Acquisition Proposal (whether
oral or written) is made and shall keep Parent promptly advised of all
developments which could reasonably be expected to culminate in the Company's
Board of Directors withdrawing, modifying or amending its recommendation of
the Offer, the Merger and the other transactions contemplated by the Merger
Agreement. The Merger Agreement does not prevent the Company's Board of
Directors from taking, and disclosing to the Company's Stockholders, a
position contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange
Act with regard to any tender offer; provided, however, that the Board of
Directors shall not recommend that the Stockholders of the Company tender
their Shares in connection with any such tender offer unless the Board of
Directors, upon the advice of counsel and its financial advisor, determines in
good faith that failing to take such action would constitute a breach of the
Board of Directors' fiduciary duty under applicable law. The Company agrees
not to release any third party from, or waive any provisions of, any
confidentiality or standstill agreement to which the Company is a party,
unless the Board determines that failing to release such third party or waive
such provisions would constitute a breach of the Board of Directors' fiduciary
duty under applicable law.
From the date of the Merger Agreement to the Effective Time, subject to
certain restrictions in the Merger Agreement with respect to maintaining
confidentiality of information furnished, the Company shall, and shall cause
its subsidiaries, officers, directors, employees, auditors and other agents to
afford the officers, employees, auditors and other agents of Parent, and
financing sources reasonable access at all reasonable times to its officers,
employees, agents, properties, offices, plants and other facilities and to all
books and records, and shall furnish Parent and such financing sources with
all financial, operating and other data and information as Parent, through its
officers, employees or agents, or such financing sources may from time to time
reasonably request.
The Merger Agreement provides that effective upon the purchase by the
Purchaser of Shares pursuant to this Offer (subject to the satisfaction of the
Minimum Condition), the Purchaser shall be entitled to designate the number of
directors, rounded up to the next whole number, on the Company's Board of
Directors that equals the product of (i) the total number of directors on the
Board of Directors (giving effect to the election of any additional directors
pursuant to this paragraph) and (ii) the percentage that the aggregate number
of Shares beneficially owned by the Purchaser or any affiliate of the
Purchaser bears to the total number of Shares outstanding, and the Company
shall take all action necessary to cause the Purchaser's designees to be
elected to the Board of Directors, including by increasing the size of the
Board of Directors or securing the resignations of its incumbent directors or
both. Notwithstanding the foregoing, the Company has agreed to use its
reasonable efforts to cause persons designated by the Purchaser to constitute
the same percentage as is on the Board of (i) each committee of the Board,
(ii) each board of directors of each subsidiary of the Company and (iii) each
committee of each such board, in each case only to the extent permitted by
law.
From and after the Effective Time, Parent shall cause the Purchaser to
indemnify and hold harmless all past and present officers and directors of the
Company and of its subsidiaries to the full extent such persons may be
indemnified by the Company pursuant to the Company's Restated Certificate of
Incorporation and by-laws as in effect on the date of the Merger Agreement for
the acts or omissions occurring at or prior to the Effective Time, and shall
advance reasonable litigation expenses incurred by such officers and directors
in connection with defending any action arising out of such acts or omissions.
Parent has agreed to cause the Surviving Corporation to make appropriate
lawful provision so that after the Effective Time, each Warrant holder will be
entitled to receive the Spread in cash upon exercise of such Warrant
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in accordance with the terms of the Merger Agreement (including payment of the
Exercise Price (as defined in each Warrant)), $24.00 in cash.
The Merger Agreement provides that the Company, the Purchaser and Parent
will each use all reasonable efforts to consummate and make effective the
transactions contemplated by the Merger Agreement.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties made by the Company to Parent and the
Purchaser including, but not limited to, representations and warranties
relating to the Company's organization and qualification, its capitalization,
its authority to enter into the Merger Agreement and to carry out the related
transactions, the absence of conflicts with applicable laws and existing
obligations of the Company and its subsidiaries, financial statements of the
Company, material contracts, compliance with applicable law, filings made by
the Company with the Commission under the Securities Act or the Exchange Act,
undisclosed liabilities, certain changes or events concerning its businesses,
litigation, employee benefits and labor matters, tax matters, environmental
matters, disclosure documents filed with the Commission in connection with the
Offer and the Merger, the Rights Agreement, brokerage fees and commissions and
other fees and state takeover statutes.
The Merger Agreement contains various customary representations and
warranties made by Parent and the Purchaser to the Company, including, but not
limited to, representations and warranties relating to Parent's and the
Purchaser's organization and qualification, their authority to enter into the
Merger Agreement and to carry out the related transaction, the absence of
conflicts with applicable laws and existing obligations of Parent and the
Purchaser, certain information provided to the Company by Parent and the
Purchaser for inclusion in disclosure documents filed with the Commission in
connection with the Offer and Merger, the financing of the Offer and Merger
and brokerage fees and commissions.
Conditions to the Merger. The obligations of each of Parent, the Purchaser
and the Company to effect the Merger are subject to the satisfaction of
certain conditions, including: (a) if required by the DGCL, the Merger
Agreement shall have been approved by the affirmative vote of the Stockholders
of the Company by the requisite vote in accordance with the Company's Restated
Certificate of Incorporation and the DGCL; (b) no statute, rule, regulation,
executive order, decree, ruling or injunction shall have been enacted,
entered, promulgated or enforced by any U.S. or state court or governmental
authority which prohibits, restrains, enjoins or restricts the consummation of
the Merger; (c) any waiting period applicable to the Merger under the HSR Act
shall have terminated or expired; and (d) the Purchaser shall have purchased
Shares pursuant to the Offer sufficient to satisfy the Minimum Condition.
The obligation of the Purchaser to effect the Merger is also subject to the
satisfaction or waiver of certain conditions, including: (a) the Company shall
have performed in all material respects all obligations required to be
performed by it under the Merger Agreement at or prior to the Effective Time,
unless such non-performance occurs following the appointment or election of
the Purchaser's designees to a majority of the positions on the Company's
Board of Directors, and (b) the Rights shall not have become nonredeemable,
exercisable, distributed or triggered pursuant to the terms of the Rights
Agreement.
Termination. The Merger Agreement may be terminated: (a) by mutual written
consent of Parent, the Purchaser and the Company; (b) by Parent or the Company
if any court of competent jurisdiction or other governmental body located or
having jurisdiction within the United States shall have issued a final order,
decree or ruling or taken any other final action restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or other final
action shall have become final and nonappealable; (c) by Parent if due to an
occurrence or circumstance which would result in a failure to satisfy any of
the conditions set forth in Section 14 hereto, the Purchaser shall have (i)
failed to commence the Offer within five business days following the initial
public announcement of the Offer, (ii) terminated the Offer or (iii) failed to
pay for Shares pursuant to the Offer within 150 days following the
commencement of the Offer; (d) by the Company if (i) there shall not have been
a material breach of any representation, warranty, covenant or agreement on
the part of the Company and the Purchaser shall have (A) terminated the Offer
or (B) failed to pay for Shares pursuant to the Offer within
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150 days following the commencement of the Offer or (ii) the Company receives
an Acquisition Proposal on terms the Company's Board of Directors, upon the
advice of counsel and its financial advisor, determines in good faith to be
more favorable to the Company's Stockholders than the terms of the Offer and
the Merger, and the Board, upon the advice of counsel and its financial
advisor determines in good faith, that it is legally required for the
discharge of its fiduciary duties, (A) not to continue to recommend that
Stockholders accept the Offer and tender their Shares or Warrants pursuant to
the Offer and (B) to accept such Acquisition Proposal; provided, however, that
the Company is not permitted to terminate the Merger Agreement unless it has
provided Parent and the Purchaser with two business days prior written notice
of its intent to so terminate the Merger Agreement together with a detailed
summary of the terms and conditions of such Acquisition Proposal; (e) by
Parent prior to the appointment or election of the Purchaser's designees to a
majority of the positions on the Company's Board of Directors if (i) there
shall have been a breach of any representation or warranty on the part of the
Company having a material adverse effect on the Company and its subsidiaries
taken as whole or which would prevent the consummation of the Offer, (ii)
there shall have been a breach of any covenant or agreement on the part of the
Company which would either have a material adverse effect or prevent the
consummation of the Offer, which shall not have been cured prior to the
earlier of (A) 10 business days following notice of such breach and (B) two
business days prior to the date on which the Offer expires, or (iii) the Board
shall have withdrawn or modified (including by amendment of the Schedule 14D-
9) in a manner adverse to the Purchaser its approval or recommendation of the
Offer, the Merger Agreement or the Merger or upon request of Parent, shall
fail to reaffirm such approval or recommendation within two business days of
such request or shall have recommended another offer or transaction, or shall
have adopted any resolution to effect any of the foregoing; or (f) by Parent
or the Company, if the Effective Time shall not have occurred on or before 150
days from the date of the execution and delivery of the Merger Agreement;
provided that the right to terminate the Merger Agreement under such clause
shall not be available to any party whose misrepresentation in the Merger
Agreement or whose failure to perform any of its covenants and agreements or
to satisfy any obligation under the Merger Agreement has been the cause of or
resulted in the failure of the Merger to occur on or before such date.
Termination Fee. Pursuant to the Merger Agreement, if (x)(i) after the date
of the execution and delivery of the Merger Agreement, any corporation,
partnership, person, other entity or group (as defined in Section 13(d)(3) of
the Exchange Act) other than Parent or the Purchaser or any of their
respective affiliates shall become the beneficial owner of 10% or more of the
outstanding Shares or to the extent there exists a holder of 10% or more of
the outstanding Shares as of the date of the execution and delivery of the
Merger Agreement, such holder purchases any additional shares of stock of the
Company and (ii) the Minimum Condition shall not have been satisfied and the
Offer is terminated or (y) Parent shall have terminated the Merger Agreement
due to (i) the Board withdrawing or modifying in a manner adverse to the
Purchaser its approval or recommendation of the Offer, the Merger Agreement or
the Merger or (ii) the Board, upon request by Parent, shall fail to reaffirm
such approval or recommendation within two business days of such request or
shall have recommended another offer or transaction, or shall have resolved to
effect any of the foregoing, then the Company if requested by Parent, shall
promptly, but in no event more than two business days after the date of such
request, pay Parent a fee of $10,000,000 plus accountable expenses, or if the
Company shall have terminated the Merger Agreement due to the Company's
receipt of an Acquisition Proposal and based upon the advice of counsel and
its financial advisor the Company determines in good faith that it is legally
required for discharge of its fiduciary duties (A) not to continue to
recommend that Holders accept the Offer or (B) to accept such Acquisition
Proposal, the Company shall pay Parent prior to such termination a fee of
$10,000,000 plus accountable expenses.
Pursuant to the Merger Agreement, in the event of the termination and
abandonment of the Merger Agreement, the Merger Agreement will become void and
have no effect, without any liability on the part of any party or its
directors, officers or Stockholders, other than certain provisions of the
Merger Agreement relating to the termination fee, expenses of the parties and
confidentiality of information, provided, that a party will not be relieved
from liability for any breach of the Merger Agreement.
Costs and Expenses. Except as discussed above, the Merger Agreement provides
that all costs and expenses incurred in connection with the transactions
contemplated by the Merger Agreement shall be paid by the party incurring such
costs and expenses.
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Amendment and Waivers. Any provision of the Merger Agreement may be amended
by the parties thereto by action taken by or on behalf of their respective
Boards of Directors at any time prior to the Effective Time; provided,
however, after approval of the Merger by the Holders of the Company, no
amendment may be made which would reduce the amount or change the type of
consideration into which each Share shall be converted upon consummation of
the Merger. The Merger Agreement may not be amended except by an instrument in
writing signed by the parties thereto. At any time prior to the Effective
Time, any party to the Merger Agreement may (a) extend the time for
performance of any of the obligations or other acts of the other parties
thereto, (b) waive any inaccuracies in the representations and warranties
contained in the Merger Agreement or in any document delivered pursuant
thereto and (c) waive compliance with any of the agreements or conditions
contained therein. Any such extension or waiver shall be valid if set forth in
an instrument in writing signed by the party or parties to be bound thereby.
THE RIGHTS AGREEMENT
On November 11, 1995, the Board declared a dividend distribution of one-half
Right for each outstanding Share to stockholders of record at the close of
business on November 24, 1995. Except as set forth below, each whole Right,
when exercisable, entitles the registered holder to purchase from the Company
one Share at a price of $45.00 per Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement.
The following is a general description only and is qualified in its entirety
by the Rights Agreement.
Initially, the Rights will be attached to all Certificates representing
Shares then outstanding, and no separate Rights certificates will be
distributed. The Rights will separate from the Shares and a distribution date
(the "Distribution Date") will occur upon the earlier of (i) a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of securities representing 15% (the "Percentage Limitation") or more
of the voting power of all outstanding voting securities of the Company (the
"Stock Acquisition Date") or (ii) 10 days (unless such date is extended by the
Board) following the commencement of (or a public announcement of an intent to
make) a tender offer or exchange offer which would result in any person or
group of affiliated or associated persons becoming an Acquiring Person. The
Rights Agreement provides that the term "Acquiring Person" shall not include
any person who as of the close of business on the later of (i) November 13,
1995 or (ii) the date as of which such person can demonstrate to the Company
it first received notice of the authorization of the Rights, beneficially
owned securities representing 15% the Percentage Limitation or more of the
Shares then outstanding, provided such person does not acquire after the
record date beneficial ownership of additional Shares (other than as a result
of stock splits, stock dividends or other actions affecting the stock
ownership of all of the holders of Shares as a group or as a result of grants
of options or purchases of Shares pursuant to the Company's employee benefit
plans). At its meeting on July 23, 1996, the Board resolved to defer the
Distribution Date until the earlier of (i) the date any person becomes an
Acquiring Person and (ii) such other time as shall be determined by the Board.
Until the Distribution Date, the Rights (i) will be evidenced by the Share
Certificates, and will be transferred with and only with the Share
Certificates, (ii) new Share Certificates issued after November 24, 1995 upon
transfer or new issuance of the Shares will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any
Certificates for Shares outstanding will also constitute the transfer of the
Rights associated with the Shares represented by such certificates.
The Rights are not exercisable until the Distribution Date and will expire
or terminate at the earliest of (i) November 23, 2005, (ii) consummation of a
merger transaction with a person or group who acquired Shares pursuant to a
Permitted Offer (as defined below), and is offering in the merger the same
price per Share and
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form of consideration paid in the Permitted Offer, or (iii) redemption or
exchange of the Rights by the Company as described below.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Shares as of the close of business on the
Distribution Date and, thereafter, the separate Rights Certificates alone will
evidence the Rights. Except as otherwise determined by the Board, only Shares
issued prior to the Distribution Date will be issued with Rights.
In the event that a person or group of affiliated or associated persons
becomes the beneficial owner of securities representing the Percentage
Limitation or more of the Shares then outstanding (unless pursuant to a tender
offer or exchange offer for all outstanding Shares at a price and on terms
which are determined prior to the date of the first acceptance of payment for
any of such Shares by at least a majority of the members of the Board who are
not officers of the Company and are not Acquiring Persons or affiliates or
associates thereof to be both adequate and otherwise in the best interests of
the Company and its Stockholders ("Permitted Offer")), then proper provision
shall be made so that each holder of a whole Right, other than such Acquiring
Person, will for a 60-day period (subject to extension under certain
circumstances) have the right to receive upon exercise one Share for each
whole Right then held (the "Subscription Right"), at the price of $1.00 per
Share to the extent available, and then (after all authorized and unreserved
Shares have been issued) a common stock equivalent (such as another equity
security with at least the same economic value as the Shares) with the Shares
to the extent available being issued first. In the event that following the
first date of public announcement by the Company or an Acquiring Person that
an Acquiring Person has become such, the Company is involved in a merger or
consolidation (whether or not the Company is the surviving corporation), or
50% or more of the Company's assets or earning power are sold (in one
transaction or a series of transactions), proper provision shall be made so
that each holder of a whole Right (other than such Acquiring Person) shall
thereafter have the right to receive, upon the exercise thereof at the
Subscription Right Price, that number of Shares of common stock of either the
Company, in the event that it is the surviving corporation of a merger or
consolidation, or the acquiring company (or, in the event there is more than
one acquiring company, the acquiring company receiving the greatest portion of
the assets or earning power transferred) which at the time of such transaction
would be equal to the result obtained by dividing (i) the product determined
by multiplying the Purchase Price per Share by the number of Shares into which
a Right is then exercisable by (ii) 50% of the current market price per Share
or common stock or such other party (the "Merger Right"). The holder of a
Right will continue to have the Merger Right whether or not such holder
exercises the Subscription Right. Notwithstanding the foregoing, upon the
occurrence of any of the events giving rise to the exercisability of the
Merger Right or the Subscription Right, any Rights that are or were at any
time after the Distribution Date owned by an Acquiring Person shall
immediately become null and void.
The Purchase Price payable, and the number of shares of common stock or
other securities or property issuable upon exercise of the Rights, are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification, of the
Shares; (ii) upon the grant to holders of Shares of certain rights or warrants
to subscribe for Shares or convertible securities at less than the current
market price of the Shares; or (iii) upon the distribution to holders of the
Shares of evidences of indebtedness or assets (excluding regular quarterly
cash dividends) or of subscription rights or warrants (other than those
referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares will be issued and in lieu thereof,
an adjustment in cash will be made based on the market price of the Shares on
the last trading date prior to the date of exercise.
At any time prior to the earlier to occur of (i) a Stock Acquisition Date or
(ii) the expiration of the Rights, the Company may redeem the Rights in whole,
but not in part, at a price of $0.001 per Right (the "Redemption
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Price"), which redemption shall be effective upon the action of the Board of
Directors. Additionally, the Company may thereafter redeem the then
outstanding Rights in whole, but not in part, at the Redemption Price (i) if
such redemption is incidental to a merger, consolidation or sale of 50% or
more of the Company's assets or earning power but not involving an Acquiring
Person or certain related persons or (ii) following an event giving rise to,
and the expiration of the exercise period for, the Subscription Right if and
for as long as an Acquiring Person beneficially owns securities representing
less than the Percentage Limitation of the outstanding Shares. The redemption
of Rights described in the preceding sentence shall be effective only as of
such time when the Subscription Right is not exercisable, and in any event,
only after ten business days' prior notice. Upon the effective date of the
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price. All Rights shall expire upon the consummation of an all cash tender
offer for all of the outstanding Shares as a result of which an Acquiring
Person becomes the beneficial owner of 85% or more of the Shares; provided,
that the person making such tender offer discloses a commitment (i) to make a
tender offer for the untendered Shares or (ii) to cause a merger of the
Company with such person, in each case, for at least the same cash
consideration as paid in the original tender offer; and, provided, further,
that such all cash tender offer shall not have been consummated earlier than
the date which is the 90th calendar day after the commencement thereof (the
"Rights Expiration Condition").
Subject to applicable law, the Board of Directors, at its option, may at any
time after a Person becomes an Acquiring Person (but not after the acquisition
by such Person of 50% or more of the outstanding Shares), exchange all or part
of the then outstanding and exercisable Rights (except for Rights which have
become void) for Shares in the ratio of one Share per Right or, alternatively,
for substitute consideration consisting of cash, securities of the Company or
other assets (or any combination thereof).
Fractional Shares will not be issuable upon exercise of the Rights. In lieu
of fractional shares, an adjustment in cash will be made based on the market
price of the Shares on the last trading date prior to the date of exercise.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a Stockholder of the Company, including, without limitation, the right to
vote or to receive dividends. While the distribution of the Rights will not be
subject to federal taxation to Stockholders or to the Company, Stockholders
may, depending upon the circumstances, recognize taxable income in the event
that the Rights become exercisable for Shares (or other consideration) or for
common stock of the acquiring company as set forth above.
The Board of Directors may therein supplement or amend the Rights Agreement
without approval of any holders of Rights or Rights Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any provision contained
therein which may be defective or inconsistent with any other provisions
therein, (iii) prior to the Distribution Date, to change or supplement any
provision thereunder in any manner which the Company may deem necessary or
desirable or (iv) on or following the Distribution Date, to change or
supplement any provision thereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of
the holders of Rights Certificates. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Shares.
Effective August 23, 1996, the Rights Agreement was amended (the
"Amendment") to provide that neither Parent nor any of its affiliates will
become an Acquiring Person in connection with the Merger Agreement, the Offer,
the Merger or the other transactions contemplated by the Merger Agreement, and
that the Rights will expire upon consummation of the Offer.
The Merger Agreement provides that the Rights shall not become exercisable
upon the consummation of the Offer.
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13. DIVIDENDS AND DISTRIBUTIONS
The Merger Agreement provides that neither the Company nor its subsidiaries
shall, between the date of the execution and delivery of the Merger Agreement
and the Effective Time, declare, set aside, make or pay any dividend or other
distribution or reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock.
14. CERTAIN CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer, the Purchaser shall 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 the Purchaser's obligation to pay for or return tendered Shares
promptly after termination or withdrawal of the Offer), pay for any Shares
tendered pursuant to the Offer, and may amend or terminate the Offer (whether
or not any Shares have theretofore been purchased or paid for) if, prior to
the expiration of the Offer (as it may be extended in accordance with the
Offer), (i) the Minimum Condition shall not have been satisfied, (ii) the
Purchaser is not, in its reasonable discretion, satisfied that (x) the Rights
will not become exercisable upon consummation of the Offer, (y) upon
consummation of the Offer, the restrictions contained in Section 203 of the
DGCL will not apply to the Merger or (z) no supermajority vote will be
required by the Company's Restated Certificate of Incorporation to approve the
Merger or after consummation of the Offer, the Purchaser will otherwise
possess sufficient voting power to effect the Merger without the affirmative
vote of any person other than the Purchaser or (iii) at any time on or after
August 24, 1996, and prior to the acceptance for payment of Shares, any of the
following conditions occurs or has occurred or, the Purchaser makes a
determination (which shall be made in good faith) that any of the following
conditions exist:
(a) there shall have been any action or proceeding brought by any
governmental authority before any federal or state court, or any order or
preliminary or permanent injunction entered in any action or proceeding
before any federal or state court or governmental, administrative or
regulatory authority or agency, located or having jurisdiction within the
United States, or any other action taken, proposed or threatened, or
statute, rule, regulation, legislation, interpretation, judgment or order
proposed, sought, enacted, entered, enforced, promulgated, amended, issued
or deemed applicable to the Purchaser, the Company or any subsidiary or
affiliate of the Purchaser or the Company or the Offer or the Merger, by
any legislative body, court, government or governmental, administrative or
regulatory authority or agency located or having jurisdiction within the
United States, which could reasonably be expected to have the effect of:
(i) making illegal, or otherwise directly or indirectly restraining or
prohibiting or making materially more costly, the making of the Offer, the
acceptance for payment of, payment for, or ownership, directly or
indirectly, of some of or all the Shares by Parent or the Purchaser, the
consummation of any of the transactions contemplated by the Merger
Agreement or materially delaying the Merger; (ii) prohibiting or materially
limiting the ownership or operation by the Company or any of its
subsidiaries, or by Parent, the Purchaser or any of Parent's subsidiaries
of all or any material portion of the business or assets of the Company or
any of its material subsidiaries or Parent or any of its subsidiaries, or
compelling the Purchaser, Parent or any of Parent's subsidiaries to dispose
of or hold separate all or any material portion of the business or assets
of the Company or any of its material subsidiaries or Parent or any of its
subsidiaries, as a result of the transaction contemplated by the Offer or
the Merger Agreement, (iii) imposing or confirming limitations on the
ability of the Purchaser, Parent or any of Parent's subsidiaries
effectively to acquire or hold or to exercise full rights of ownership of
Shares, including, without limitation, the right to vote any Shares
acquired or owned by Parent or the Purchaser or any of Parent's
subsidiaries on all matters properly presented to the Stockholders of the
Company, including, without limitation, the adoption and approval of the
Merger Agreement and the Merger or the right to vote any shares of capital
stock of any subsidiary (other than immaterial subsidiaries) directly or
indirectly owned by the Company; or (iv) requiring divestiture by Parent or
the Purchaser, directly or indirectly, of any Shares;
(b) there shall have occurred (i) any general suspension of trading in,
or limitation on prices of, securities on any national securities exchange
or in the over-the-counter market in the United States, (ii) any
extraordinary or material adverse change in the market price of the Shares
or in the United States securities
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or financial markets generally, including, without limitation, a decline of
at least 20% in either the Dow Jones Average of Industrial Stocks or the
Standard & Poor's 500 index from the date of the Merger Agreement,
(iii) any material adverse change or any condition, event or development
involving a prospective material adverse change in United States or other
material international currency exchange rates or a suspension of, or
limitation on, the markets therefor, (iv) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, or (v) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving the
United States which would have a material adverse effect or materially
adversely affect (or materially delay) the consummation of the Offer; on
the business, assets, financial condition or results of operations of the
Company and its subsidiaries taken as a whole;
(c) (i) it shall have been publicly disclosed or the Purchaser shall have
otherwise learned that beneficial ownership (determined for the purposes of
this Section as set forth in Rule 13d-3 promulgated under the Exchange Act)
of 15% or more of the outstanding Shares has been acquired by any
corporation (including the Company or any of its subsidiaries or
affiliates), partnership, person or other entity or group (as defined in
Section 13(d)(3) of the Exchange Act), other than Parent or any of its
affiliates and other than any Grandfathered Person (as defined in the
Rights Agreement) so long as such person remains a Grandfathered Person (as
defined in the Rights Agreement) or (ii) (A) 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 the approval or recommendation of
the Offer, the Merger or the Merger Agreement, or approved or recommended
any takeover proposal or any other acquisition of Shares other than the
Offer and the Merger, (B) any such corporation, partnership, person or
other entity or group shall have entered into a definitive agreement or an
agreement in principle with the Company with respect to a tender offer or
exchange offer for any Shares or a merger, consolidation or other business
combination with or involving the Company or any of its subsidiaries or (C)
the Board of Directors of the Company or any committee thereof shall have
resolved to do any of the foregoing;
(d) 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 as if such representations and warranties were made at the time of
such determination;
(e) the Company shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement;
(f) the Merger Agreement shall have been terminated in accordance with
its terms or the Offer shall have been amended or terminated with the
consent of the Company;
(g) any waiting periods under the HSR Act applicable to the purchase of
Shares pursuant to the Offer shall not have expired or been terminated, or
any material approval, permit, authorization, consent or waiting period of
any domestic, foreign or supranational governmental, administrative or
regulatory agency (federal, state, local, provincial or otherwise) located
or having jurisdiction within the United States or any country or economic
region in which either the Company or Parent, directly or indirectly, has
material assets or operations, shall not have been obtained or satisfied;
or
(h) the Company and the Purchaser (or any affiliate of the Purchaser)
shall have entered into an agreement (which by its terms supersedes the
Merger Agreement) providing for the acquisition of the Company by the
Purchaser or any affiliate of Purchaser by merger or other similar business
combination, or by purchase of shares of capital stock or assets of the
Company, or the Company and the Purchaser shall have entered into any other
agreement pursuant to which it is agreed that the Offer will be terminated;
which, in the reasonable judgment of the Purchaser with respect to each and
every matter referred to above, makes it inadvisable to proceed with the Offer
or with such acceptance for payment of or payment for Shares or to proceed
with the Merger.
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15. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
Except as described in this Section 15, based on a review of publicly
available filings by the Company with the Commission and other publicly
available information concerning the Company, neither Parent nor the Purchaser
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 acquisition of Shares or Warrants by the
Purchaser pursuant to the Offer, the Merger or otherwise or of any approval or
other action by any governmental, administrative or regulatory agency or
authority, domestic or foreign, that would be required prior to the
acquisition of Shares or Warrants by the Purchaser pursuant to the Offer, the
Merger or otherwise. Should any such approval or other action be required,
Parent and the Purchaser currently contemplate that it will be sought. While
the Purchaser does not currently intend to delay the acceptance for payment of
Shares and Warrants 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 adverse consequences might not result to the business of
the Company or the Purchaser or Parent or that certain parts of the business
of the Company or the Purchaser or Parent might not have to be disposed of in
the event that such approvals were not obtained or any other actions were not
taken. The Purchaser's obligation under the Offer to accept for payment and
pay for Shares and Warrants is subject to certain conditions, including
conditions relating to the legal matters discussed in this Section 15. See
Section 14.
State Takeover Statutes. 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 of
business in those states. In 1982, 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 was
therefore unconstitutional. However, in 1987, in CTS Corp. v. Dynamics Corp.
of America, 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 acquiror from voting on
the affairs of a target corporation without prior approval of the remaining
stockholders, provided that the laws were applicable only under certain
conditions.
Based on information supplied by the Company and the Company's
representations in the Merger Agreement, the Purchaser does not believe that
any state takeover statutes 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 to be a waiver of that right. If it is
asserted that any state takeover statute is applicable to the Offer or the
Merger and an appropriate court does not determine that it is inapplicable or
invalid as applied to the Offer 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 or Warrants tendered pursuant to the Offer, or be delayed in
consummating the Offer or the Merger. In such case, the Purchaser may not be
obligated to accept for payment or pay for any Shares or Warrants tendered
pursuant to the Offer.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted "takeover"
statutes. The Purchaser does not know whether any of these statutes will, by
their terms, apply to the Offer, and has not complied with any such statutes.
To the extent that certain provisions of these statutes purport to apply to
the Offer, the Purchaser believes that there are reasonable bases for
contesting such statutes. If any person should seek to apply any state
takeover statute, the Purchaser would take such action as then appears
desirable, which action may include challenging the validity or applicability
of any such statute in appropriate court proceedings. If it is asserted that
one or more takeover statutes apply to the Offer, and it is not determined by
an appropriate court that such statute or statutes do not apply or are invalid
as applied to the Offer, the Purchaser might be required to file certain
information with, or receive approvals from, the relevant state authorities,
and the Purchaser might be unable to purchase or pay for
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Shares or Warrants tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer. In such case, the Purchaser may not be obligated to
accept for payment or pay for Shares or Warrants tendered.
Antitrust. The Offer and the acquisition of Shares pursuant to the Merger
Agreement are subject to the HSR Act, which provides that certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice (the
"Antitrust Division") and the Federal Trade Commission ("FTC") and certain
waiting period requirements have been satisfied. Parent intends to file on or
before September 3, 1996, a Notification and Report Form with respect to the
Offer.
Under the provisions of the HSR Act applicable to the Offer, the purchase of
Shares pursuant to the Offer and the Merger may not be consummated until the
expiration of a 15-calendar day waiting period following the filing by Parent.
Accordingly, in the event such filing is made on September 3, 1996, the
waiting period with respect to the Offer will expire at 11:59 p.m., New York
City time, on September 18, 1996, unless Parent receives a request for
additional information or documentary material, or the Antitrust Division and
the FTC terminate the waiting period prior thereto. If, within such 15-day
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. The Purchaser will not accept for payment Shares or Warrants tendered
pursuant to the Offer unless and until the waiting period requirements imposed
by the HSR Act with respect to the Offer have been satisfied. See Section 14.
No separate HSR Act waiting period requirements with respect to the Merger
Agreement will apply, so long as the 15-day waiting period expires or is
terminated. Thus, all Shares may be acquired pursuant to the Offer at the
close of the 15-day waiting period or on the tenth calendar day after the date
of substantial compliance with a request for additional information.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of
Shares pursuant to the Offer and the Merger Agreement. At any time before or
after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the acquisition
of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares
acquired by the Purchaser or divestiture of substantial assets of Parent or
its subsidiaries. Private parties and state attorneys general may also bring
legal action under the antitrust laws under certain circumstances. Based upon
an examination of publicly available information relating to the businesses in
which Parent and the Company are engaged, Parent and the Purchaser believe
that the acquisition of Shares by the Purchaser will not violate the antitrust
laws. Nevertheless, there can be no assurance that a challenge to the Offer or
other acquisition of Shares by the Purchaser on antitrust grounds will not be
made or, if such a challenge is made, of the result. See Section 15 for
certain conditions to the Offer, including conditions with respect to
litigation and certain governmental actions.
Margin Rules. The Purchaser and Parent will comply with the requirements of
the margin regulations promulgated by the Federal Reserve Board to the extent
they are applicable to the financing of the Offer. See Section 9.
Appraisal Rights. If the Merger is consummated, Stockholders of the Company
would have the right to dissent and demand appraisal of their Shares under the
DGCL. Under the DGCL, dissenting Stockholders who comply with the applicable
statutory procedures will be entitled to receive a judicial determination of
the fair value of their Shares (exclusive of any element of value arising from
the accomplishment or expectation of such merger or similar business
combination) and to receive payment of such fair value in cash. Any such
judicial determination of the fair value of the Shares could be based upon
considerations other than or in addition to the price paid in the Offer and
the market value of the Shares. In Weinberger v. UOP, Inc., the Delaware
Supreme
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Court stated, among other things, that "proof of value by any techniques or
methods which are generally considered acceptable in the financial community
and otherwise admissible in court" should be considered in an appraisal
proceeding. Holders should recognize that the value so determined could be
higher or lower or the same as the price per Share paid pursuant to the Offer
or the consideration per Share in the Merger.
Other Foreign Approvals. According to publicly available information, the
Company also owns property and conducts business in a number of other foreign
countries and jurisdictions. In connection with the acquisition of the Shares
pursuant to the Offer or the Merger, the laws of certain of those foreign
countries and jurisdictions may require the filing of information with, or the
obtaining of the approval of, governmental authorities as a result of the
acquisition of the Shares pursuant to the Offer or the Merger. There can be no
assurance that the Purchaser will be able to cause the Company or its
subsidiaries to satisfy or comply with such laws or that compliance or
noncompliance will not have adverse consequences for the Company or any
subsidiary after purchase of the Shares pursuant to the Offer or the Merger.
16. FEES AND EXPENSES
Parent and the Purchaser have engaged Bear Stearns as the Dealer Manager in
connection with the Offer. Parent has agreed to pay Bear Stearns $500,000 for
its services to date as financial advisor to Parent and a fee of approximately
$1.5 million that will be payable to Bear Stearns upon consummation of the
Offer. The Purchaser also has agreed to reimburse Bear Stearns for its
expenses, including reasonable counsel fees, and to indemnify it against
certain liabilities and expenses, including certain liabilities under the
federal securities laws.
The Purchaser has retained Morrow & Co., Inc. to act as the Information
Agent and First Chicago Trust Company of New York to act as the Depositary in
connection with the Offer. The Information Agent may contact by mail,
telephone, telex, facsimile, telegraph and personal interview and may request
brokers, dealers, commercial banks, trust companies and other nominees to
forward the Offer material to beneficial owners. The Information Agent and
Depositary each will receive reasonable and customary compensation for their
services, will be reimbursed for certain reasonable out-of-pocket expenses and
will be indemnified against certain liabilities and expenses in connection
therewith, including certain liabilities under the federal securities laws.
Neither the Information Agent nor the Depositary has been retained to make
solicitations or recommendations in connection with the Offer.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other persons for soliciting tenders of Shares and
Warrants pursuant to the Offer (other than the fees of the Dealer Manager and
the Information Agent). Brokers, dealers, commercial banks and trust companies
will be reimbursed by the Purchaser for reasonable 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 in any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. Neither the Purchaser nor Parent is aware of
any jurisdiction in which the making of the Offer or the acceptance thereof
would not be in compliance with the laws of such jurisdiction. 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 such Holders prior to
the expiration of the Offer. In any jurisdiction where the securities, blue
sky or other laws of which require the Offer to be made by a licensed broker
or dealer, the Offer is being made on behalf of the Purchaser by the Dealer
Manager or one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED IN THIS
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
32
<PAGE>
The Purchaser has filed with the Commission the Schedule 14D-1 pursuant to
Rule 14d-3 under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. The Schedule 14D-1
and any amendments thereto, including exhibits, may be inspected and copies
may be obtained at the same places and in the same manner as set forth in
Section 8 (except they will not be available at the regional offices of the
Commission).
L Acquisition Corporation
August 30, 1996
33
<PAGE>
SCHEDULE I
INFORMATION REGARDING THE DIRECTORS AND EXECUTIVE OFFICERS OF
COLUMBUS MCKINNON CORPORATION (THE PARENT) AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. Set forth in the table below
are the name and the present principal occupations or employment and the name,
principal business and address of any corporation or other organization in
which such occupation or employment is conducted, and the five-year employment
history of each of the directors and executive officers of Parent. Parent
directly owns 100% of the equity interest in the Purchaser. Unless otherwise
indicated, each person identified below is employed by Parent. The principal
business address of Parent and, unless otherwise indicated, the business
address of each person identified below, is 140 John James Audubon Parkway,
Amherst, New York 14228-1197. Directors are identified by an asterisk. All
persons identified below are United States citizens.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- ------------------------------------------
<S> <C>
Edward W. Duffy* Mr. Duffy has served as Chairman of the Board of
3338 Highland's Bridge Columbus McKinnon Corporation since 1986. Mr. Duffy is
Road Sarasota, FL 34235 a retired Chairman of the Board and Chief Executive
Officer of Marine Midland Bank and a retired director
on the boards of W. R. Grace & Company, Niagara Mohawk
Power Corporation and Oneida Limited. He also serves on
the board of Utica Mutual Insurance Company.
Herbert P. Ladds, Jr.* Mr. Ladds has served as President and Chief Executive
Officer of Columbus McKinnon Corporation since 1982 and
has been a Director of Columbus McKinnon Corporation
since 1973. He served as Executive Vice President from
1981 to 1982, and Vice President--Sales and Marketing
from 1971 to 1980. He is also a director of Utica Mu-
tual Insurance Company, in addition to various private
and not-for-profit entities.
Robert L. Montgomery, Mr. Montgomery has served as Executive Vice President
Jr.* and Chief Financial Officer of Columbus McKinnon Corpo-
ration since 1987 and has been a Director of Columbus
McKinnon Corporation since 1982. Mr. Montgomery has
been with Columbus McKinnon Corporation since 1974.
Prior thereto, he was a certified public accountant
with Price Waterhouse LLP. He also currently serves on
the boards of DeGraff Memorial Hospital and Buffalo
General Health Systems.
Randolph A. Marks* Mr. Marks has been a Director of Columbus McKinnon Cor-
369 Franklin Street poration since 1986. A private investor, he is a re-
Suite 100 tired Chairman of the Board of American Brass Company
Buffalo, NY 14202 and a founder and current director of Computer Task
Group, Inc.
L. David Black* Mr. Black has been a Director of Columbus McKinnon Cor-
JLG Industries, Inc. poration since 1995. He has served as chairman of the
1 JLG Drive Board, President and Chief Executive Officer of JLG In-
McConnellsburg, PA 17233 dustries, Inc., since 1993. Prior thereto, he served as
President of JLG Industries, Inc.
Kenneth G. McCreadie Mr. McCreadie has served as Vice President--Administra-
tion of Columbus McKinnon Corporation since June 1996.
From 1982 through June 1996, he served as its Vice
President--Controller.
</TABLE>
S-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME AND FIVE-YEAR EMPLOYMENT HISTORY
- ---- ------------------------------------------
<S> <C>
Peter A. Grant Mr. Grant has served as Vice President--Human Resources
of Columbus McKinnon Corporation since 1987.
Timothy T. Tevens Mr. Tevens has served as Vice President--Information
Services of Columbus McKinnon Corporation since 1991.
Ned T. Librock Mr. Librock has served as Vice President--Sales and
Marketing of Columbus McKinnon Corporation since Novem-
ber 1995. Prior thereto, he served as General Manager--
Industrial and Consumer Sales and as Director--Indus-
trial Sales.
Lois H. Demler Ms. Demler has served as Corporate Secretary of Colum-
bus McKinnon Corporation since 1987.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. Set forth in the table
below are the name and the present principal occupations or employment and the
name, principal business and address of any corporation or other organization
in which such occupation or employment is conducted, and the five-year
employment history of each of the directors and executive officers of the
Purchaser. Each person identified below is employed by Parent. The principal
business address of the Purchaser and each person identified below, is 140
John James Audubon Parkway, Amherst, New York 14228-1197. Directors are
identified by an asterisk. All persons identified below are United States
citizens.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- ---- ----------------------------
<S> <C>
Herbert P. Ladds, Jr.* Mr. Ladds is President and Chief Executive Officer of
the Purchaser. He has served as President and Chief Ex-
ecutive Officer of Columbus McKinnon Corporation since
1982 and has been a Director of Columbus McKinnon Cor-
poration since 1973.
Robert L. Montgomery, Mr. Montgomery is Vice President and Treasurer of the
Jr.* Purchaser. He has served as Executive Vice President
and Chief Financial Officer of Columbus McKinnon Corpo-
ration since 1987 and has been a Director of Columbus
McKinnon Corporation since 1982.
</TABLE>
S-2
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and Warrants and any other required documents should be sent or delivered by
each Holder or his or her broker, dealer, commercial bank or other nominee to
the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail: By Facsimile Transmission: By Hand or Overnight
P.O. Box 2569 (201) 222-4721 Courier:
Tenders & Exchanges Tenders & Exchanges
Suite 4660-SII 14 Wall Street Eighth
Jersey City, New Jersey Floor Suite 4680-SII
07303-2569 New York, New York 10005
Confirm Facsimile By Telephone:
(201) 222-4707 (Call Collect)
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery
may be directed to the Information Agent or the Dealer Manager at their
respective telephone numbers and locations listed below. You may also contact
your broker, dealer, commercial bank or trust company or nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue New York, New York 10022 (212) 754-8000 (collect) or Call
Toll Free: (800) 566-9058
The Dealer Manager is:
BEAR, STEARNS & CO. INC.
245 Park Avenue New York, New York 10167
Call Toll Free: (800) 296-7709
<PAGE>
EXHIBIT 99.(A)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF CLASS A COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
AND
WARRANTS TO PURCHASE SHARES OF CLASS A COMMON STOCK
OF
SPRECKELS INDUSTRIES, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED AUGUST 30, 1996
BY
L ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
COLUMBUS MCKINNON CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, SEPTEMBER 27, 1996, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C>
By Mail: By Hand or Overnight Delivery:
P.O. Box 2569 Tenders & Exchanges
Tenders & Exchanges 14 Wall Street
Suite 4660-SII Eighth Floor
Jersey City, New Jersey Suite 4680-SII
07303-2569 New York, New York 10005
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9
PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders or warrant
holders (collectively "holders") either if certificates evidencing Shares (as
defined below) or Warrants (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 the account of First Chicago Trust Company of New York as
Depositary at The Depository Trust Company ("DTC"), or the Philadelphia
Depository Trust Company ("PDTC") (each, a "Book-Entry Transfer Facility" and,
collectively, the "Book-Entry Transfer Facilities") pursuant to the book-entry
transfer procedure described in Section 3 of the Offer to Purchase. Book-entry
transfers will not be available with respect to the Warrants. As used herein,
"Certificates" shall mean certificates representing Shares or Warrants, as the
case may be.
<PAGE>
Holders whose Certificates are not immediately available or who cannot
deliver their Certificates and all other documents required hereby to the
Depositary prior to the Expiration Date (as defined in Section 1 of the Offer
to Purchase) or who cannot complete the procedure for delivery by book-entry
transfer, if applicable, on a timely basis and who wish to tender their Shares
or Warrants must do so pursuant to the guaranteed delivery procedure described
in Section 3 of the Offer to Purchase. See Instruction 2. DELIVERY OF
DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
[_] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN ONE OF THE BOOK-ENTRY TRANSFER
FACILITIES MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution _________________________________________________
Check Box of Applicable Book-Entry Transfer Facility:
(CHECK ONE) [_] DTC [_] PDTC
Account Number _______________________ Transaction Code Number _______________
[_] CHECK HERE IF SHARES OR WARRANTS ARE BEING TENDERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY:
Name(s) of Registered Holder(s) _______________________________________________
Window Ticket No. (if any) ____________________________________________________
Date of Execution of Notice of Guaranteed Delivery ____________________________
Name of Institution which Guaranteed Delivery _________________________________
DESCRIPTION OF SHARES TENDERED
- -----------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND
ADDRESS(ES) OF
REGISTERED
HOLDER(S)
(PLEASE FILL
IN, IF BLANK,
EXACTLY AS
NAME(S)
APPEAR(S) ON CERTIFICATE(S) AND SHARE(S) TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- -----------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL NUMBER OF
CERTIFICATE SHARES EVIDENCED NUMBER OF
NUMBER(S)* BY CERTIFICATE(S)* SHARES TENDERED**
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
TOTAL SHARES
</TABLE>
- -----------------------------------------------------------------------
* Need not be completed by holders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced
by each Certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
<PAGE>
DESCRIPTION OF WARRANTS TENDERED
- -------------------------------------------------------------------------------
NAME(S) AND
ADDRESS(ES) OF
REGISTERED HOLDER(S)
(PLEASE FILL IN,
IF BLANK, EXACTLY AS
NAME(S) APPEAR(S) ON CERTIFICATE(S) TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
EXERCISE TOTAL NUMBER OF NUMBER OF
CERTIFICATE PRICE WARRANTS EVIDENCED WARRANTS
NUMBER(S) OF WARRANT(S) BY CERTIFICATE(S) TENDERED*
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
TOTAL WARRANTS
- -------------------------------------------------------------------------------
</TABLE>
* Unless otherwise indicated, it will be assumed that all Warrants evidenced
by each Certificate delivered to the Depositary are being tendered hereby.
See Instruction 4.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to L Acquisition Corporation, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Columbus
McKinnon Corporation, a New York corporation, (i) the above described shares
of Class A Common Stock, par value $0.01 per share (the "Shares"), of
Spreckels Industries, Inc., a Delaware corporation (the "Company"), including
the associated common stock purchase rights (the "Rights") issued pursuant to
the Rights Agreement, dated as of November 11, 1995, between the Company and
ChaseMellon Shareholder Services, L.L.C. (successor to Chemical Mellon
Shareholder Services, L.L.C.), as Rights Agent, as amended (the "Rights
Agreement"), at the price of $24.00 per Share (and the associated Right) or
(ii) the above described warrants to purchase Shares (the "Warrants") at the
Spread (as defined below), in each case net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated August 30, 1996 (the "Offer to Purchase"),
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer"). The
undersigned understands that the Purchaser reserves the right to transfer or
assign, in whole or from time to time in part, to one or more of its
affiliates, the right to purchase all or any portion of the Shares or Warrants
tendered pursuant to the Offer.
The Company has outstanding four classes of Warrants exercisable for Shares
at prices of $9.17, $11.67, $15.00 and $1.00, respectively, per Warrant (the
"$9.17 Warrants," the "$11.67 Warrants," the "$15.00 Warrants" and the "$1.00
Warrants," respectively). The "Spread" with respect to each of the Warrants is
the difference between the Offer price for the Shares and the exercise price
for each of the Warrants, which equals $14.83 per Warrant, in the case of the
$9.17 Warrants, $12.33 per Warrant, in the case of the $11.67 Warrants, $9.00
per Warrant, in the case of the $15.00 Warrants and $23.00 per Warrant, in the
case of the $1.00 Warrants.
Subject to, and effective upon, acceptance for payment of the Shares or
Warrants tendered herewith in accordance with the terms of the Offer
(including, if the Offer is extended or amended, the terms and conditions of
such extension or amendment), 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 or Warrants that are being tendered hereby
and all dividends, distributions (including, without
<PAGE>
limitation, distributions of additional Shares or Warrants), and Rights
declared, paid or distributed in respect of such Shares or Warrants on or
after August 30, 1996 (collectively, "Distributions"), and irrevocably
constitutes and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares or Warrants
and all Distributions, with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), to (i)
deliver Certificates for such Shares or Warrants and all Distributions, or
transfer ownership of such Shares or Warrants and all Distributions on the
account books maintained by a Book-Entry Transfer Facility, together, in
either case, with all accompanying evidences of transfer and authenticity, to
or upon the order of the Purchaser, (ii) present such Shares or Warrants and
all Distributions for transfer on the books of the Company and (iii) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares or Warrants and all Distributions, all in accordance with the terms and
subject to the conditions of the Offer.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints Herbert P. Ladds, Jr. and Robert L. Montgomery, Jr. and each of them,
the attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to the full extent of the undersigned's rights with respect to
the Shares or Warrants tendered by the undersigned and accepted for payment by
the Purchaser (and any and all Distributions). This proxy and power of
attorney shall be considered coupled with an interest in the tendered Shares
or Warrants. This appointment will be effective if, when, and only to the
extent that, the Purchaser accepts such Shares or Warrants for payment
pursuant to the Offer. Upon such acceptance for payment, all prior proxies
given by the undersigned with respect to such Shares or Warrants will, without
further action, be revoked, and no subsequent proxies may be given nor any
subsequent written consent executed by the undersigned (and, if given or
executed, will not be deemed to be effective) with respect thereto. The
designees of the Purchaser named above will, with respect to the Shares or
Warrants (and any Distributions) for which the appointment is effective, be
empowered to exercise all voting and other rights of the undersigned as they
in their sole discretion may deem proper at any annual or special meeting of
the stockholders of the Company or any adjournment or postponement thereof, by
written consent in lieu of any such meeting or otherwise, and the Purchaser
reserves the right to require that, in order for Shares or Warrants to be
deemed validly tendered immediately upon the Purchaser's acceptance for
payment of such Shares or Warrants, the Purchaser must be able to exercise
full voting rights with respect to such Shares or Warrants.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares or
Warrants tendered hereby and all Distributions, and that when such Shares or
Warrants are accepted for payment by the Purchaser, the Purchaser will acquire
good, marketable and unencumbered title thereto and to all Distributions, free
and clear of all liens, restrictions, charges and encumbrances, and that none
of such Shares, Warrants and Distributions will be subject to any adverse
claim. The undersigned, upon request, shall execute and deliver all additional
documents deemed by the Depositary or the Purchaser to be necessary or
desirable to complete the sale, assignment and transfer of the Shares or
Warrants tendered hereby and all Distributions. In addition, the undersigned
shall remit and transfer promptly to the Depositary for the account of the
Purchaser all Distributions in respect of the Shares or Warrants tendered
hereby, accompanied by appropriate documentation of transfer, and, pending
such remittance and transfer or appropriate assurance thereof, the Purchaser
shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares or
Warrants tendered hereby or deduct from such purchase price, the amount or
value of such Distribution as determined by the Purchaser in its sole
discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as otherwise stated in the Offer to Purchase, this tender
is irrevocable.
The undersigned understands that tenders of Shares or Warrants pursuant to
any of the procedures described in Section 3 of the Offer to Purchase and in
the instructions hereto will constitute the undersigned's acceptance of the
terms and conditions of the Offer, as well as the undersigned's representation
and warranty that (a) the undersigned owns the Shares or Warrants being
tendered within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended ("Rule 14e-4"), (b) the tender of such Shares
or Warrants complies with Rule 14e-4, and (c) the undersigned has the full
power and authority to tender and assign the Shares or Warrants tendered, as
specified in the Letter of Transmittal. The Purchaser's acceptance of such
Shares or Warrants for payment will constitute a binding agreement between the
undersigned and the Purchaser upon the terms and subject to the conditions of
the Offer, including, without limitation, the undersigned's representation and
warranty that the undersigned owns the Shares or Warrants being tendered.
<PAGE>
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, Purchaser may not be required to accept for payment any
of the Shares or Warrants tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares or
Warrants purchased, and return all Certificates evidencing Shares or Warrants
not purchased or not tendered, in the name(s) of the registered holder(s)
appearing above under "Description of Shares Tendered" or "Description of
Warrants Tendered." Similarly, unless otherwise indicated in the box entitled
"Special Delivery Instructions," please mail the check for the purchase price
of all Shares or Warrants purchased and all Certificates evidencing Shares or
Warrants not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered" or "Description of Warrants Tendered."
In the event that the boxes entitled "Special Payment Instructions" and
"Special Delivery Instructions" are both completed, please issue the check for
the purchase price of all Shares or Warrants purchased and return all
Certificates evidencing Shares or Warrants not purchased or not tendered in
the name(s) of, and mail such check and Certificates to, the person(s) so
indicated. The undersigned recognizes that the Purchaser has no obligation,
pursuant to the Special Payment Instructions, to transfer any Shares or
Warrants from the name of the registered holder(s) (or in the case of
Warrants, the holder(s) thereof, if the Purchaser does not purchase any of the
Shares or Warrants tendered hereby.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS (SEE SPECIAL DELIVERY INSTRUCTIONS
INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 5 AND 7)
To be completed ONLY if the To be completed ONLY if the
check for the purchase price of check for the purchase price of
Shares or Warrants purchased or Shares or Warrants purchased or
Certificates evidencing Shares or Certificates evidencing Shares or
Warrants not tendered or not pur- Warrants not tendered or not pur-
chased are to be issued in the chased are to be mailed to some-
name of someone other than the one other than the undersigned,
undersigned. or to the undersigned at an ad-
dress other than that shown under
either "Description of Shares
Tendered" or "Description of War-
rants Tendered."
Issue: [_] Check [_] Certificate(s)
to:
Name: ____________________________
(PRINT) Mail: [_] Check [_] Certificate(s)
Address: _________________________ to:
__________________________________ Name: ____________________________
(ZIP CODE) (PRINT)
__________________________________ Address: _________________________
(TAXPAYER IDENTIFICATION OR __________________________________
SOCIAL SECURITY NUMBER) (SEE (ZIP CODE)
SUBSTITUTE FORM W-9) __________________________________
(TAXPAYER IDENTIFICATION OR
[_] Credit Shares tendered by SOCIAL SECURITY NUMBER) (SEE
book-entry transfer that are SUBSTITUTE FORM W-9)
not accepted for payment to
(check one): [_] DTC [_] PDTC
----------------------------------
(ACCOUNT NUMBER)
<PAGE>
IMPORTANT
HOLDERS: SIGN HERE
(ALSO PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
X __________________________________________________________________________
X __________________________________________________________________________
SIGNATURE(S) OF HOLDER(S)
Dated: __________________ , 1996
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificates or on a security position listing or by person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following
information. See Instruction 5.)
Name(s): ___________________________________________________________________
________________________________________________________________________
(Please Print)
Capacity (full title): _____________________________________________________
Address: ___________________________________________________________________
________________________________________________________________________
(Zip Code)
Area Code and Tel. No.: ____________________________________________________
Taxpayer Identification or Social Security No.: ____________________________
(See Substitute Form W-9 Included Herein)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION
GUARANTEE IN SPACE BELOW.
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal
must be guaranteed by a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., or by a financial institution (including most commercial banks, savings
and loan associations and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(an "Eligible Institution"), unless (i) this Letter of Transmittal is signed
by the registered holder(s) (which term, for purposes of this document, shall
include any participant in a Book-Entry Transfer Facility whose name appears
on a security position listing as the owner of applicable security) of the
Shares or Warrants tendered hereby and such holder(s) has (have) completed
neither the box entitled "Special Payment Instructions" nor the box entitled
"Special Delivery Instructions" above or (ii) such Shares or Warrants are
tendered for the account of an Eligible Institution. If the Shares or Warrants
are registered in the name of a person other than the signer of this Letter of
Transmittal, or if payment is to be made or delivered to, or Certificates
evidencing unpurchased Shares or Warrants are to be issued or returned to, a
person other than the registered owner, then the tendered Certificates must be
endorsed or accompanied by duly executed stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
Certificates, with the signatures on the Certificates or stock powers
guaranteed by an Eligible Institution as provided in this Letter of
Transmittal. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be used either if Certificates are to be forwarded herewith
or if Shares are to be delivered by book-entry transfer pursuant to the
procedure set forth in Section 3 of the Offer to Purchase. Certificates
evidencing all physically tendered Shares or Warrants, or a confirmation of a
book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility of all Shares delivered by book-entry transfer as well as a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
unless an Agent's Message is utilized, and any other documents required by
this Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth above prior to the Expiration Date (as defined in Section
1 of the Offer to Purchase). If Certificates are forwarded to the Depositary
in multiple deliveries, a properly completed and duly executed Letter of
Transmittal must accompany each such delivery. Holders whose Certificates are
not immediately available, who cannot deliver their Certificates and all other
required documents to the Depositary prior to the Expiration Date or who
cannot complete the procedure for delivery by book-entry transfer, if
applicable, on a timely basis may tender their Shares or Warrants pursuant to
the guaranteed delivery procedure described in Section 3 of the Offer to
Purchase. Pursuant to such procedure: (i) such tender must be made by or
through an Eligible Institution; (ii) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form made available by the
Purchaser, must be received by the Depositary prior to the Expiration Date;
and (iii) the Certificates evidencing all physically delivered Shares or
Warrants in proper form for transfer by delivery, or a confirmation of a book-
entry transfer, if applicable, into the Depositary's account or a Book-Entry
Transfer Facility of all Shares delivered by book-entry transfer, in each case
together with a Letter of Transmittal (or a facsimile thereof), unless an
Agent's Message is utilized, properly completed and duly executed, with any
required signature guarantees, and any other documents required by this Letter
of Transmittal, must be received by the Depositary within three trading days
after the date of execution of such Notice of Guaranteed Delivery. A trading
day is any day on which the Nasdaq National Market is open for business.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, CERTIFICATES AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER, AND THE DELIVERY
WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY
IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED,
IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE
TIMELY DELIVERY. BOOK-ENTRY TRANSFER WILL NOT BE AVAILABLE WITH RESPECT TO THE
WARRANTS.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares or Warrants will be purchased. By execution of this Letter
of Transmittal (or a manually signed facsimile hereof), all tendering holders
waive any right to receive any notice of the acceptance of their Shares or
Warrants for payment.
3. INADEQUATE SPACE. If the space provided herein under either "Description
of Shares Tendered" or "Description of Warrants Tendered" is inadequate, the
Certificate numbers, the number of Shares or Warrants evidenced by such
Certificates and the number of Shares or Warrants tendered should be listed on
a separate schedule and attached hereto.
<PAGE>
4. PARTIAL TENDERS (NOT APPLICABLE TO HOLDERS OF SHARES WHO TENDER BY BOOK-
ENTRY TRANSFER). If fewer than all the Shares or Warrants evidenced by any
Certificate delivered to the Depositary herewith are to be tendered hereby,
fill in the number of Shares or Warrants which are to be tendered in the boxes
entitled "Number of Shares Tendered" or "Number of Warrants Tendered." In such
cases, new Certificate(s) evidencing the remainder of the Shares or Warrants
that were evidenced by the Certificates delivered to the Depositary herewith
will be sent to the person(s) signing this Letter of Transmittal, unless
otherwise provided in the box entitled "Special Delivery Instructions" above,
as soon as practicable after the expiration or termination of the Offer. All
Shares or Warrants evidenced by Certificates delivered to the Depositary will
be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
or Warrants tendered hereby, the signature(s) must correspond with the name(s)
as written on the face of the Certificates evidencing such Shares or Warrants
without alteration, enlargement or any other change whatsoever.
If any Share or Warrant tendered hereby is owned of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares or Warrants tendered hereby are registered in the names
of different holders, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
such Shares or Warrants.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares or Warrants tendered hereby, no endorsements of Certificates or
separate stock powers are required, unless payment is to be made to, or
Certificates evidencing Shares or Warrants not tendered or not purchased are
to be issued in the name of, a person other than the registered holder(s), in
which case, the Certificate(s) evidencing the Shares or Warrants tendered
hereby must be endorsed or accompanied by appropriate stock powers, in either
case signed exactly as the name(s) of the registered holder(s) appear(s) on
such Certificate(s). Signatures on such Certificate(s) and stock powers must
be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares or Warrants tendered hereby, the
Certificate(s) evidencing the Shares or Warrants tendered hereby must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such
Certificate(s). Signatures on such Certificate(s) and stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory
to the Purchaser of such person's authority so to act must be submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6,
the Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares or Warrants to it or its order pursuant to the Offer.
If, however, payment of the purchase price of any Shares or Warrants purchased
is to be made to, or Certificate(s) evidencing Shares or Warrants not tendered
or not purchased are to be issued in the name of, a person other than the
registered holder(s), the amount of any stock transfer taxes (whether imposed
on the registered holder(s), such other person or otherwise) payable on
account of the transfer to such other person will be deducted from the
purchase price of such Shares or Warrants purchased, unless evidence
satisfactory to the Purchaser of the payment of such taxes, or exemption
therefrom, is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Certificates evidencing the Shares or
Warrants tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares or Warrants tendered hereby is to be issued, or
Certificate(s) evidencing Shares or Warrants not tendered or not purchased are
to be issued, in the name of a person other than the person(s) signing this
Letter of Transmittal or if such check or any such Certificate is to be sent
to someone other than the person(s) signing this Letter of Transmittal or to
the person(s) signing this Letter of Transmittal but at an address other than
that shown in the boxes entitled "Description of Shares Tendered" or
"Description of Warrants Tendered" above, the appropriate boxes on this Letter
of Transmittal must be completed.
<PAGE>
8. WAIVER OF CONDITIONS. The conditions to the Offer may be waived by the
Purchaser (subject to certain limitations in the Merger Agreement (as defined
in the Offer to Purchase)), in whole or in part at any time and from time to
time in Purchaser's sole discretion.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Dealer Manager or the
Information Agent at their respective addresses or telephone numbers set forth
below. Additional copies of the Offer to Purchase, this Letter of Transmittal
and the Notice of Guaranteed Delivery may be obtained from the Information
Agent or from brokers, dealers, commercial banks or trust companies.
10. SUBSTITUTE FORM W-9. Each tendering holder is required to provide the
Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and
that such holder is not subject to backup withholding of federal income tax.
If a tendering holder has been notified by the Internal Revenue Service that
such holder is subject to backup withholding, such holder must cross out item
(2) of the Certification box of the Substitute Form W-9, unless such holder
has since been notified by the Internal Revenue Service that such holder is no
longer subject to backup withholding. Failure to provide the information on
the Substitute Form W-9 may subject the tendering holder to 31% federal income
tax withholding on the payment of the purchase price of all Shares or Warrants
purchased from such holder. If the tendering holder has not been issued a TIN
and has applied for one or intends to apply for one in the near future, such
holder should write "Applied For" in the space provided for the TIN in Part 1
of the Substitute Form W-9, and sign and date the Substitute Form W-9. If
"Applied For" is written in Part 1 and the Depositary is not provided with the
TIN within 60 days, the Depositary will withhold 31% of all payments of the
purchase price to such holder until a TIN is provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES
AND CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN SECTION 1 OF THE OFFER TO PURCHASE).
IMPORTANT TAX INFORMATION
Under the federal income tax law, a holder whose tendered Shares or Warrants
are accepted for payment is required by law to provide the Depositary (as
payer) with such holder's correct TIN on Substitute Form W-9 below. If such
holder is an individual, the TIN is such holder's social security number. If
the Depositary is not provided with the correct TIN, the holder may be subject
to penalties imposed by the Internal Revenue Service. In addition, payments
that are made to such holder with respect to Shares or Warrants purchased
pursuant to the Offer may be subject to backup withholding of 31%.
Certain holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement, signed under penalties of
perjury, attesting to such individual's exempt status. Forms of such
statements can be obtained from the Depositary. See the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the holder. Backup withholding is not an additional tax.
Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained from the Internal Revenue
Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a holder with
respect to Shares or Warrants purchased pursuant to the Offer, the holder is
required to notify the Depositary of such holder's correct TIN by completing
the form below certifying (a) that the TIN provided on Substitute Form W-9 is
correct (or that such holder is awaiting a TIN), and (b)
<PAGE>
that (i) such holder is exempt from backup withholding, (ii) such holder has
not been notified by the Internal Revenue Service that such holder is subject
to backup withholding as a result of a failure to report all interest or
dividends or (iii) the Internal Revenue Service has notified such holder that
such holder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The holder is required to give the Depositary the social security number or
employer identification number of the record holder of the Shares or Warrants
tendered hereby. If the Shares or Warrants are in more than one name or are
not in the name of the actual owner, consult the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidance on which number to report. If the tendering holder has not
been issued a TIN and has applied for a number or intends to apply for a
number in the near future, the holder should write "Applied For" in the space
provided for the TIN in Part I, and sign and date the Substitute Form W-9. If
"Applied For" is written in Part I and the Depositary is not provided with a
TIN within 60 days, the Depositary will withhold 31% of all payments of the
purchase price to such holder until a TIN is provided to the Depositary.
<PAGE>
ALL TENDERING HOLDERS MUST COMPLETE THE FOLLOWING
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
- -------------------------------------------------------------------------------
PART I--Taxpayer Identification Number-- SOCIAL SECURITY
For all Accounts Enter your taxpayer NUMBER
identification number in the appropriate
SUBSTITUTE box. For most individuals and sole OR __________
proprietors, this is your Social
Security Number. For other entities, it
FORM W-9 is your Employer Identification Number. EMPLOYER
If you do not have a number, see "How to IDENTIFICATION
Obtain a TIN" in the enclosed NUMBER
DEPARTMENT OF THE Guidelines.
TREASURY INTERNAL [ ] AWAITING TIN
REVENUE SERVICE PART II--For Payees Exempt From Backup
Withholding, (see enclosed Guidelines
and complete as instructed therein).
- -------------------------------------------------------------------------------
CERTIFICATION--Under penalties of
perjury, I certify that:
Note: if the account is in more than one
name, see the chart on page 2 of the
enclosed Guidelines to determine what
number to enter.
(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 either (a) I have mailed or
delivered an application to receive a taxpayer
identification number to the appropriate Internal
Revenue Service Center or Social Security Administration
Office or (b) I intend to mail or deliver an application
in the near future. I understand that if I do not
provide a taxpayer identification number within sixty
(60) days, 31% of all reportable payments made to me
thereafter will be withheld until I provide a number;
-------------------------------------------
(2) I am not subject to backup withholding because (a) I
PAYER'S REQUEST am exempt from backup withholding, or (b) I have not
FOR TAXPAYER been notified by the Internal Revenue Service ("IRS")
IDENTIFICATION that I am subject to backup withholding as a result of
NUMBER failure to report all interest or dividends, or (c) the
IRS has notified me that I am no longer subject to
backup withholding; and
(3) Any other information provided on this form is true,
correct and complete.
CERTIFICATE INSTRUCTIONS--You must cross out item (2)
above if you have been notified by the IRS that you are
currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
However, if after being notified by the IRS that you were
subject to backup withholding you received another
notification from the IRS that you are no longer subject
to backup withholding, do not cross out item (2).
------------------------------------------------------------
SIGNATURE ______________________________ DATE _____, 1996
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR INSTRUCTIONS.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue
New York, New York 10022
(212) 754-8000 (collect)
or
Call Toll Free: (800) 566-9058
The Dealer Manager for the Offer is:
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
Call Toll Free: (800) 296-7709
August 30, 1996
<PAGE>
EXHIBIT 99.(A)(3)
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
AND
ALL OUTSTANDING WARRANTS TO PURCHASE SHARES OF CLASS A COMMON STOCK
OF
SPRECKELS INDUSTRIES, INC.
AT
$24.00 NET PER SHARE
AND
$14.83 NET PER $9.17 WARRANT
$12.33 NET PER $11.67 WARRANT
$9.00 NET PER $15.00 WARRANT
$23.00 NET PER $1.00 WARRANT
BY
L ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
COLUMBUS MCKINNON CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, SEPTEMBER 27, 1996, UNLESS THE OFFER IS EXTENDED.
August 30, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by L Acquisition Corporation (the "Purchaser"), a
Delaware corporation and a wholly owned subsidiary of Columbus McKinnon
Corporation, a New York corporation, to act as Dealer Manager in connection
with the Purchaser's offer to purchase for cash all of the outstanding (i)
shares of Class A Common Stock, par value $0.01 per share (the "Shares"), of
Spreckels Industries, Inc., a Delaware corporation (the "Company"), including
the associated common stock purchase rights (the "Rights") issued pursuant to
the Rights Agreement, dated as of November 11, 1995, between the Company and
ChaseMellon Shareholder Services, L.L.C. (successor to Chemical Mellon
Shareholder Services, L.L.C.), as Rights Agent, as amended (the "Rights
Agreement"), at a purchase price of $24.00 per Share (and the associated
Right), and (ii) warrants to purchase Shares (the "Warrants") at the Spread
(as defined below), in each case net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer
to Purchase and in the related Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer") enclosed herewith. Holders
whose certificates evidencing such Shares or Warrants (the "Certificates") are
not immediately available or who cannot deliver their Certificates and all
other required documents to the Depositary (as defined below) prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase), or who, if
applicable, cannot complete the procedures for book-entry transfer on a timely
basis, must tender their Certificates according to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase.
<PAGE>
The Company has outstanding four classes of Warrants exercisable for Shares
at prices of $9.17, $11.67, $15.00 and $1.00, respectively, per Warrant (the
"$9.17 Warrants," the "$11.67 Warrants," the "$15.00 Warrants" and the "$1.00
Warrants", respectively). The "Spread" with respect to each of the Warrants is
the difference between the Offer price for the Shares and the exercise price
for each of the Warrants, which equals $14.83 per Warrant, in the case of the
$9.17 Warrants, $12.33 per Warrant, in the case of the $11.67 Warrants, $9.00
per Warrant, in the case of the $15.00 Warrants and $23.00 per Warrant, in the
case of the $1.00 Warrants.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares or Warrants registered in your name or in the
name of your nominee.
The Offer is subject to there being validly tendered and not properly
withdrawn prior to the expiration of the Offer a number of Shares which
constitutes at least 51% of the voting power (determined on a fully diluted
basis, including the exercise in full of all options and Warrants outstanding,
other than Warrants validly tendered and accepted for payment pursuant to the
Offer) on the date of purchase, of all of the securities of the Company
entitled to vote generally in the election of directors or in a merger. The
Offer is also subject to other terms and conditions. See the "Introduction"
and Section 14 of the Offer to Purchase.
The following are enclosed herewith:
1. The Offer to Purchase, dated August 30, 1996.
2. The GREEN Letter of Transmittal to tender Shares or Warrants for your use
and for the information of your clients. Facsimile copies of the Letter of
Transmittal may be used to tender Shares or Warrants.
3. The PINK Notice of Guaranteed Delivery for Shares or Warrants to be used
to accept the Offer if Share or Warrant Certificates are not immediately
available, if such Certificates and all other required documents cannot be
delivered to First Chicago Trust Company of New York (the "Depositary") by the
Expiration Date, or, if applicable, the procedure for book-entry transfer
cannot be completed by the Expiration Date.
4. A YELLOW printed form of letter which may be sent to your clients for
whose accounts you hold Shares or Warrants registered in your name or in the
name of your nominee, with space provided for obtaining your clients'
instructions with regard to the Offer.
5. Guidelines of the Internal Revenue Service for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information relating to
backup federal income tax withholding.
6. A return envelope addressed to First Chicago Trust Company of New York,
the Depositary.
YOUR PROMPT ACTION IS REQUIRED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON SEPTEMBER 27, 1996, UNLESS
THE OFFER IS EXTENDED.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal with any required signature guarantees, or an
Agent's Message (as defined in Section 3 of the Offer to Purchase) in
connection with a book-entry delivery of Shares, and any other required
documents should be sent to the Depositary, and (ii) Certificates representing
the tendered Shares or Warrants should be delivered to the Depositary, or, if
applicable, Shares should be tendered by book-entry transfer into the
Depositary's account maintained at one of the Book-Entry Transfer Facilities
(as described in Section 3 of the Offer to Purchase), all in accordance with
the instructions set forth in the Letter of Transmittal and the Offer to
Purchase.
If Holders of Shares or Warrants wish to tender, but it is impracticable for
them to forward their Certificates or other required documents on or prior to
the Expiration Date or, if applicable, to comply with the book-entry transfer
procedures on a timely basis, a tender may be effected by following the
guaranteed delivery procedures specified in Section 3 of the Offer to
Purchase.
The Purchaser will not pay any commissions or fees to any broker, dealer or
other person (other than the Depositary, the Information Agent and the Dealer
Manager) in connection with the solicitation of tenders of Shares or Warrants
pursuant to the Offer. The Purchaser will, however, upon request, reimburse
you for customary clerical and mailing expenses incurred by you in forwarding
any of the enclosed materials to your clients. The Purchaser will pay or cause
to be paid any stock transfer taxes payable on the transfer of Shares or
Warrants to it, except as otherwise provided in Instruction 6 of the Letter of
Transmittal.
2
<PAGE>
Any inquiries you may have with respect to the Offer should be addressed to
Bear, Stearns & Co. Inc., the Dealer Manager, at its address and telephone
numbers set forth on the back cover of the Offer to Purchase. Additional
copies of the enclosed materials may be obtained from the undersigned or from
the Information Agent, Morrow & Co., Inc.
Very truly yours,
BEAR, STEARNS & CO. INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, COLUMBUS MCKINNON CORPORATION,
THE COMPANY, THE DEPOSITARY OR THE DEALER MANAGER, OR ANY AFFILIATE OF ANY OF
THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY
DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
EXHIBIT 99.(A)(4)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
AND
ALL OUTSTANDING WARRANTS TO PURCHASE SHARES OF CLASS A COMMON STOCK
OF
SPRECKELS INDUSTRIES, INC.
AT
$24.00 NET PER SHARE
AND
$14.83 NET PER $9.17 WARRANT
$12.33 NET PER $11.67 WARRANT
$9.00 NET PER $15.00 WARRANT
$23.00 NET PER $1.00 WARRANT
BY
L ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
COLUMBUS MCKINNON CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, SEPTEMBER 27, 1996, UNLESS THE OFFER IS EXTENDED.
August 30, 1996
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated August 30,
1996 (the "Offer to Purchase") and the related Letter of Transmittal relating
to an offer by L Acquisition Corporation (the "Purchaser"), a Delaware
corporation and a wholly owned subsidiary of Columbus McKinnon Corporation, a
New York corporation, to purchase all of the (i) outstanding shares of Class A
Common Stock, par value $0.01 per share (the "Shares"), of Spreckels
Industries, Inc., a Delaware corporation (the "Company"), including the
associated common stock purchase rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of November 11, 1995 between the Company and
ChaseMellon Shareholder Services L.L.C. (successor to Chemical Mellon
Shareholder Services, L.L.C.), as Rights Agent, as amended (the "Rights
Agreement"), at a purchase price of $24.00 per Share (and the associated
Right), and (ii) the warrants to purchase Shares (the "Warrants") at the
Spread (as defined below), in each case net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer to Purchase and in the related Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer"). Holders of Shares
or Warrants whose certificates for such Shares or Warrants are not immediately
available or who cannot deliver their certificates and all other required
documents to the Depositary, (as defined in the Offer to Purchase), or
complete the procedures for book-entry transfer, if applicable, prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase) must tender
their Shares or Warrants according to the guaranteed delivery procedures set
forth in Section 3 of the Offer to Purchase. WE ARE THE HOLDER OF RECORD OF
SHARES OR WARRANTS HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES OR
WARRANTS CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR
INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES OR WARRANTS HELD
BY US FOR YOUR ACCOUNT.
The Company has outstanding four classes of Warrants exercisable for Shares
at prices of $9.17, $11.67, $15.00 and $1.00, respectively, per Warrant (the
"$9.17 Warrants," the "$11.67 Warrants," the "$15.00 Warrants" and the "$1.00
Warrants," respectively). The "Spread" with respect to each of the Warrants is
the difference between the Offer price for the Shares and the exercise price
for each of the Warrants, which equals $14.83 per Warrant, in the case of the
$9.17 Warrants, $12.33 per Warrant, in the case of the $11.67 Warrants, $9.00
per Warrant, in the case of the $15.00 Warrants and $23.00 per Warrant, in the
case of the $1.00 Warrants.
<PAGE>
We request instructions as to whether you wish to have us tender on your
behalf any or all of such Shares or Warrants held by us for your account,
pursuant to the terms and subject to the conditions set forth in the Offer.
Please note the following:
1. The Offer price is $24.00 per Share, $14.83 per $9.17 Warrant, $12.33
per $11.67 Warrant, $9.00 per $15.00 Warrant and $23.00 per $1.00 Warrant,
in each case net to the seller in cash, without interest, upon the terms
and subject to the conditions set forth in the Offer.
2. The board of directors of the Company has unanimously determined that
the Offer and the Merger (as defined in the Offer to Purchase) are fair to,
and in the best interests of, the Company and its stockholders and Warrant
holders, has approved the Offer and the Merger and recommends that the
Company's stockholders and Warrant holders accept the Offer and tender all
of their Shares and Warrants pursuant thereto.
3. The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date a number of Shares
which, when added to the Shares owned by Parent, constitutes at least 51%
of the voting power (determined on a fully diluted basis, including the
exercise in full of all options and Warrants outstanding, other than
Warrants validly tendered and accepted for payment pursuant to the Offer),
on the date of purchase, of all of the securities of the Company entitled
to vote generally in the election of directors or in a merger.
4. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Friday, September 27, 1996, unless the Offer is
extended.
5. The Offer is being made for all of the outstanding Shares and
Warrants.
6. Tendering stockholders and Warrant holders will not be obligated to
pay brokerage fees or commissions or, except as otherwise provided in
Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase
of Shares and Warrants by the Purchaser pursuant to the Offer. However,
backup federal income tax withholding at a rate of 31% may be required,
unless an exemption applies or unless the required taxpayer identification
information is provided. See Instruction 10 of the Letter of Transmittal.
7. Notwithstanding any other provision of the Offer, payment for Shares
and Warrants accepted for payment pursuant to the Offer will in all cases
be made only after timely receipt by the Depositary of (a) certificates for
(or a timely Book-Entry Confirmation (as defined in Section 3 to the Offer
to Purchase) with respect to) such Shares and Warrants, (b) the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed
with any required signature guarantees or an Agent's Message (as defined in
the Offer to Purchase) in connection with a book-entry transfer, and (c)
any other documents required by the Letter of Transmittal. Accordingly,
payment to all tendering stockholders and Warrant holders may not be made
at the same time depending upon when certificates for Shares and Warrants
or Book-Entry Confirmation with respect to Shares are actually received by
the Depositary.
If you wish to have us tender any or all of your Shares or Warrants, please
so instruct us by completing, executing and returning to us the instructions
form contained in this letter. An envelope in which to return your
instructions to us is enclosed. If you authorize the tender of your Shares or
Warrants, all such Shares or Warrants will be tendered unless otherwise
specified on the instruction form contained in this letter. Your instructions
should be forwarded to us in ample time to permit us to submit a tender on
your behalf prior to the expiration of the Offer.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares and Warrants residing in any jurisdiction in
which the making of the Offer or the acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such jurisdiction.
However, the Purchaser may, in its discretion, take such action as it may deem
necessary to make the Offer to holders of Shares and Warrants in such
jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer will be deemed to
be made on behalf of the Purchaser by one or more registered brokers or
dealers that are licensed under the laws of such jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF CLASS A COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
AND
ALL OUTSTANDING WARRANTS TO PURCHASE SHARES OF CLASS A COMMON STOCK
OF
SPRECKELS INDUSTRIES, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated August 30, 1996 (the "Offer to Purchase"), and the related
Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"), in connection with the Offer by L Acquisition
Corporation, a Delaware corporation (the "Purchaser") and a wholly owned
subsidiary of Columbus McKinnon Corporation, a New York corporation, to
purchase (i) all outstanding shares of Class A Common Stock, par value $0.01
per share (the "Shares"), of Spreckels Industries, Inc., a Delaware
corporation (the "Company"), including the associated common stock purchase
rights (the "Rights") issued pursuant to the Rights Agreement, dated as of
November 11, 1995, between the Company and ChaseMellon Shareholder Services,
L.L.C. (successor to Chemical Mellon Shareholder Services, L.L.C.), as Rights
Agent, as amended (the "Rights Agreement"), at a price of $24.00 per Share
(and the associated Right) and (ii) all outstanding warrants to purchase
Shares issued by the Company (the "Warrants') at the Spread (as defined in the
Offer to Purchase), in each case net to the seller in cash, without interest
thereon.
This will instruct you to tender to the Purchaser the number of Shares or
Warrants indicated below (or, if no number is indicated below, all Shares or
Warrants) held by you for the account of the undersigned, upon the terms and
subject to the conditions set forth in the Offer to Purchase.
Number of Shares Tendered:*___________ SIGN HERE
Number of $9.17 Warrants Tendered:*___ --------------------------------------
Number of $11.67 Warrants Tendered:*__ --------------------------------------
Number of $15.00 Warrants Tendered:*__ Signature(s)
Number of $1.00 Warrants Tendered:*___ --------------------------------------
Certificate Nos. (if available):______ --------------------------------------
- -------------------------------------- Please type or print address(es)
- -------------------------------------- --------------------------------------
--------------------------------------
Check ONE box if Shares will be Area Code and Telephone Number
tendered by book-entry transfer: --------------------------------------
Taxpayer Identification or Social
[_] The Depository Trust Company Security Number(s)
[_] Philadelphia Depository Trust
Company
Account No: __________________________
Dated: _______________________________
* Unless otherwise indicated, it will be assumed that all Shares or Warrants
held by us for your account are to be tendered.
<PAGE>
EXHIBIT 99(A)(5)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF CLASS A COMMON STOCK
(INCLUDING THE ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
AND
WARRANTS TO PURCHASE SHARES OF CLASS A COMMON STOCK
OF
SPRECKELS INDUSTRIES, INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, SEPTEMBER 27, 1996, UNLESS THE OFFER IS EXTENDED.
As set forth in Section 3 of the Offer to Purchase described below, this
instrument or one substantially equivalent hereto must be used to accept the
Offer (as defined below) if (i) certificates evidencing (A) shares of Class A
Common Stock, par value $0.01 per share (the "Shares"), of Spreckels
Industries, Inc., a Delaware corporation, or (B) warrants to purchase Shares
(the "Warrants") are not immediately available, (ii) the certificates
evidencing Shares or Warrants and all other required documents cannot be
delivered to the Depositary prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase), or (iii) the procedure for delivery by
book-entry transfer for the Shares cannot be completed on a timely basis. This
instrument may be transmitted by facsimile transmission or delivered by hand
or mail to the Depositary.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
(for Eligible Institutions)
(201) 222-4650
Tenders & Exchanges P.O. Tenders & Exchanges 14
Box 2569 Suite 4660-SII To Confirm Receipt of Wall Street 8th Floor,
Jersey City, NJ 07303- Notice of Guaranteed Suite 4680-SII New York,
2569 Delivery: New York 10005
(201) 938-7887
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET
FORTH ABOVE WILL 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, the signature guarantee must appear in the
applicable space provided in the signature box in the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares or Warrants, as the case may be, to the Depositary
within the time period shown herein. Failure to do so could result in a
financial loss to the Eligible Institution.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tender(s) to L Acquisition Corporation, a Delaware
corporation and a wholly-owned subsidiary of Columbus McKinnon Corporation, a
New York corporation, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated August 30, 1996 (the "Offer to Purchase") and in
the related Letter of Transmittal (which, as amended from time to time,
together constitute the "Offer"), receipt of which is hereby acknowledged, the
number of Shares or Warrants indicated below of Spreckels Industries, Inc., a
Delaware corporation, pursuant to the guaranteed delivery procedures set forth
in Section 3 of the Offer to Purchase.
Signature(s) _______________________ Address(es)_____________________________
____________________________________ ----------------------------------------
Name(s) of Record Holders __________ ZIP CODE
- ------------------------------------ Area Code and Tel. No.(s)_______________
PLEASE TYPE OR PRINT
- ------------------------------------ Check one box if Shares will be
tendered by book-entry transfer
Number of Shares ___________________ [_] The Depository Trust Company
Number of $9.17 Warrants ___________ [_] Philadelphia Depository Trust
Number of $11.67 Warrants __________ Company
Number of $15.00 Warrants __________ Account Number _________________________
Number of $1.00 Warrants ___________
Certificate No.(s) (If Available)
- ------------------------------------
- ------------------------------------
Dated _______________________ , 1996
THE GUARANTEE SET FORTH BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program, (a) represents that the above
named person(s) "own(s)" the Shares or Warrants tendered hereby within the
meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended
("Rule 14e-4"), (b) represents that the tender of those Shares or Warrants
complies with Rule 14e-4, and (c) guarantees to deliver to the Depositary
either the certificates evidencing all tendered Shares or Warrants, in proper
form for transfer, or confirmation of book-entry transfer of such shares into
the Depositary's account at The Depository Trust Company or the Philadelphia
Depository Trust Company (each a "Book-Entry Transfer Facility"), in either
case together with the Letter of Transmittal (or a facsimile thereof), properly
completed and duly executed with any required signature guarantees, or an
Agent's Message (as defined in Section 3 of the Offer to Purchase) in the case
of a book-entry delivery, and any other required documents, all within three
Nasdaq National Markets trading days after the date hereof.
- ------------------------------------ ----------------------------------------
NAME OF FIRM AUTHORIZED SIGNATURE
- ------------------------------------ Name ___________________________________
ADDRESS PLEASE PRINT OR TYPE
- ------------------------------------ Title __________________________________
ZIP CODE Date ____________________________ , 1996
Area Code and Tel. No. _____________
NOTE: DO NOT SEND CERTIFICATES EVIDENCING SHARES OR WARRANTS WITH THIS NOTICE.
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
EXHIBIT 99.(A)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM-9
SECTION REFERENCES ARE TO THE INTERNAL REVENUE CODE.
Purpose of Form--A person who is required to file an information return with
the IRS must obtain your correct TIN to report income paid to you, real estate
transactions, mortgage interest you paid, the acquisition or abandonment of
secured property, or contributions you made to an IRA. Use Form W-9 to furnish
your correct TIN to the requester (the person asking you to furnish your TIN)
and, when applicable, (1) to certify that the TIN you are furnishing is
correct (or that you are waiting for a number to be issued), (2) to certify
that you are not subject to backup withholding, and (3) to claim exemption
from backup withholding if you are an exempt payee. Furnishing your correct
TIN and making the appropriate certifications will prevent certain payments
from being subject to backup withholding.
Note: If a requester gives you a form other than a W-9 to request your TIN,
you must use the requester's form.
How to Obtain a TIN--If you do not have a TIN, apply for one immediately. To
apply, get Form SS-5, Application for a Social Security Card (for
individuals), from your local office of the Social Security Administration, or
Form SS-4, Application for Employer Identification Number (for businesses and
all other entities), from your local IRS office.
To complete Form W-9 if you do not have a TIN, write "Applied for" in the
space for the TIN in Part I, sign and date the form, and give it to the
requester. Generally, you will then have 60 days to obtain a TIN and furnish
it to the requester. If the requester does not receive your TIN within 60
days, backup withholding, if applicable, will begin and continue until you
furnish your TIN to the requester. For reportable interest or dividend
payments, the payer must exercise one of the following options concerning
backup withholding during this 60-day period. Under option (1), a payer must
backup withhold on any withdrawals you make from your account after 7 business
days after the requester receives this form back from you. Under option (2),
the payer must backup withhold on any reportable interest or dividend payments
made to your account, regardless of whether you make any withdrawals. The
backup withholding under option (2) must begin no later than 7 business days
after the requester receives this form back. Under option (2), the payer is
required to refund the amounts withheld if your certified TIN is received
within the 60-day period and you were not subject to backup withholding during
that period.
Note: Writing "Applied for" on the form means that you have already applied
for a TIN OR that you intend to apply for one in the near future.
As soon as you receive your TIN, complete another Form W-9, include your
TIN, sign and date the form, and give it to the requester.
What is Backup Withholding?--persons making certain payments to you after
1992 are required to withhold and pay to the IRS 31% of such payments under
certain conditions. This is called "backup withholding". Payments that could
be subject to backup withholding include interest, dividends, broker and
barter exchange transactions, rents, royalties, nonemployee compensation, and
certain payments from fishing boat operators, but no not include real estate
transactions.
If you give the requester your correct TIN, make the appropriate
certifications, and report all your taxable interest and dividends on your tax
return, your payments will not be subject to backup withholding. Payments you
receive will be subject to backup withholding if:
1. You do not furnish your TIN to the requester, or
2. The IRS notifies the requester that you furnished an incorrect TIN, or
3. You are notified by the IRS that you are subject to backup withholding
because you failed to report all your interest and dividends on your tax
return (for reportable interest and dividends only), or
4. You do not certify to the requester that you are not subject to backup
withholding under 3 above (for reportable interest and dividend accounts
opened after 1983 only), or
5. You do not certify your TIN. This applies only to reportable interest,
dividend, broker, or barter exchange accounts opened after 1983, or broker
accounts considered inactive in 1983.
Except as explained in 5 above, other reportable payments are subject to
backup withholding only if 1 or 2 above applies. Certain payees and payments
are exempt from backup withholding and information reporting. See Payees and
Payments Exempt From Backup Withholding, below, and Example Payees and
Payments under Specific Instructions, below, if you are an exempt payee.
Payees and Payments Exempt From Backup Withholding.--The following is a list
of payees exempt from backup withholding and for which no information
reporting is required. For interest and dividends, all listed payees are
exempt except item (9). For broker transactions, payees listed in (1) through
(13) and a person registered under the Investment Advisers Act of 1940 who
regularly acts as a broker are exempt. Payments subject to reporting under
sections 6041 and 6041A are generally exempt from backup withholding only if
made to payees described in items (1) through (7), except a corporation that
provides medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information reporting.
Only payees described in items (2) through (6) are exempt from backup
withholding for barter exchange transactions, patronage dividends, and
payments by certain fishing boat operators.
(1) A corporation. (2) An organization exempt from tax under section 501(a),
or an IRA, or a custodial account under section 403(b)(7). (3) The United
States or any of its agencies or instrumentalities. (4) A state, the District
of Columbia, a possession of the United States, or any of their political
subdivisions or instrumentalities. (5) A foreign government or any of its
political subdivisions, agencies, or instrumentalities. (6) An international
organization or any of its agencies or instrumentalities. (7) A foreign
central bank of issue. (8) A dealer in securities or commodities required to
register in the United States or a possession of the United States. (9) A
futures commission merchant registered with the Commodity Futures Trading
Commission. (10) A real estate investment trust. (11) An entity registered at
all times during the tax year under the Investment Company Act of 1940. (12) A
common trust fund operated by a bank under section 584(a). (13) A financial
institution. (14) A middleman known in the investment community as a nominee
or listed in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List. (15) A trust exempt from tax under section
664 or described in section 4947.
Payments of dividend and patronage dividends generally not 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 United
States and that have at least one nonresident partner.
. Payments of patronage dividends not paid in money.
. Payments made by certain foreign organizations.
Payments of interest generally not 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 TIN to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Mortgage interest paid by you.
<PAGE>
Payments that are not subject to information reporting are also not subject
to backup withholding. For details, see sections 6041, 6041 A(a), 6042, 6044,
6045, 6049, 6050A, and 6050N, and their regulations.
PENALTIES
Failure To Furnish TIN.-- If you fail to furnish your correct TIN to a
requester, you are subject to a penalty of $50 for each such failure unless
your failure is due to reasonable cause and not to willful neglect.
Civil Penalty for False Information With Respect to Withholding.--If you
make a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
Criminal Penalty for Falsifying Information.--Willfully falsifying
certifications of affirmations may subject you to criminal penalties including
fines and/or imprisonment.
Misuse of TINs.--If the requester discloses or uses TINs in violation of
Federal law, the requester may be subject to civil and criminal penalties.
SPECIFIC INSTRUCTIONS
Name.--If you are an individual, you must generally provide the name shown
on your social security card. However, if you have changed your last name, for
instance, due to marriage, without informing the Social Security
Administration of the name change, please enter your first name, the last name
shown on your social security card, and your new last name.
If you are a sole proprietor, you must furnish your individual name and
either your SSN or EIN. You may also enter your business name or "doing
business as" name on the business name line. Enter your name(s) as shown on
your social security card and/or as it was used to apply for your EIN on Form
SS-4.
SIGNING THE CERTIFICATION.
1. Interest, Dividend, and Barter Exchange Accounts Opened Before 1984 and
Broker Accounts Considered Active During 1983. You are required to furnish
your correct TIN, but you are not required to sign the certification.
2. Interest, Dividend, Broker, and Barter Exchange Accounts Opened After
1983 and Broker Accounts Considered Inactive During 1983. You must sign the
certification or backup withholding will apply. If you are subject to backup
withholding and you are merely providing your correct TIN to the requester,
you must cross out item 2 in the certification before signing the form.
3. Real Estate Transactions. You must sign the certification. You may cross
out item 2 of the certification.
4. Other Payments. You are required to furnish your correct TIN, but you are
not required to sign the certification unless you have been notified of an
incorrect TIN. Other payments include payments made in the course of the
requester's trade or business for rents, royalties, goods (other than bills
for merchandise), medical and health care services, payments to a nonemployee
for services (including attorney and accounting fees), and payments to certain
fishing boat crew members.
5. Mortgage Interest Paid by You, Acquisition or Abandonment of Secured
Property, or IRA Contributions. You are required to furnish your correct TIN,
but you are not required to sign the certification.
6. Exempt Payees and Payments. If you are exempt from backup withholding,
you should complete this form to avoid possible erroneous backup withholding.
Enter your correct TIN in Part I, write "EXEMPT" in the block in Part II, and
sign and date the form. If you are a nonresident alien or foreign entity not
subject to backup withholding, give the requester a complete Form W-8,
Certificate of Foreign Status.
7. TIN "Applied for." Follow the instructions under How To Obtain a TIN, on
page 1, and sign and date this form.
Signature.--For a joint account, only the person whose TIN is shown in Part
I should sign.
Privacy Act Notice.--Section 6109 requires you to furnish your correct TIN
to persons who must file information returns with the IRS to report interest,
dividends, and certain other income paid to you, mortgage interest you paid,
the acquisition or abandonment of secured property, or contributions you made
to an IRA. The IRS uses the numbers for identification purposes and to help
verify the accuracy of your tax return. You must provide your TIN whether or
not you are required to file a tax return. Payers must generally withhold 31%
of taxable interest, dividend, and certain other payments to a payee who does
not furnish a TIN to a payer. Certain penalties may also apply.
WHAT NAME AND NUMBER TO GIVE THE REQUESTER
<TABLE>
<S> <C>
For this type of account: Give name and SSN of:
1. Individual The individual
2. Two or more individuals (joint account) The actual owner of the account
or, if combined funds, the first
individual on the account(1)
3. Custodian account of a minor (Uniform Gift to Minors Act) The minor(2)
4. a. The usual revocable savings trust (grantor is also trustee) the grantor-trustee(1)
b. So-called trust account that is not a legal or valid trust under state law The actual owner(1)
5. Sole proprietorship The owner(3)
For this type of account: Give name and EIN of:
6. Sole proprietorship The owner(3)
7. A valid trust, estate, or pension trust Legal entity(4)
8. Corporate The corporation
9. Association, club, religious, charitable, educational, or other The organization
tax-exempt organization
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department of Agriculture in the name of The public entity
a public entity (such as a state or local government, school
district or prison) that receives agriculture 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 SSN.
(3)Show your individual name. You may also enter your business name. You may
use your SSN or EIN.
(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the TIN of the personal representative or trustee
unless the legal entity itself is not designated in the account title.)
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
EXHIBIT (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares or Warrants. The Offer is made solely by the Offer
to Purchase dated August 30, 1996 and the related Letter of Transmittal
and any amendments or supplements thereto, and is being made to all
holders of Shares and Warrants. The Offer is not being made to, nor
will tenders be accepted from or on behalf of, holders of Shares or
Warrants in any jurisdiction in which the making of the Offer or
acceptance thereof would not be in compliance with the laws of
such jurisdiction. In those jurisdictions where securities, blue
sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on
behalf of the Purchaser by Bear, Stearns & Co. Inc. or one
or more registered brokers or dealers licensed under the
laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Class A Common Stock
(Including the Associated Common Stock Purchase Rights)
and
All Outstanding Warrants to Purchase
Shares of Class A Common Stock
of
SPRECKELS INDUSTRIES, INC.
at
$24.00 Net Per Share
and
$14.83 Net Per $9.17 Warrant
$12.33 Net Per $11.67 Warrant
$9.00 Net Per $15.00 Warrant
$23.00 Net Per $1.00 Warrant
by
L Acquisition Corporation
a wholly owned subsidiary
of
Columbus McKinnon Corporation
L Acquisition Corporation, a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Columbus McKinnon Corporation, a New York
corporation ("Parent"), is offering to purchase all outstanding shares of Class
A Common Stock, par value $0.01 per share (the "Shares"), of Spreckels
Industries, Inc., a Delaware corporation (the "Company"), including the
associated Rights (as defined in the Offer to Purchase), at a purchase price of
$24.00 per Share (and the associated Right) and all outstanding warrants of the
Company to purchase Shares (the "Warrants") at a purchase price equal to $14.83
per Warrant, in the case of Warrants having an exercise price of $9.17, $12.33
per Warrant, in the case of Warrants having an exercise price of $11.67, $9.00
per Warrant, in the case of Warrants having an exercise price of $15.00 and
$23.00 per Warrant, in the case of Warrants having an exercise price of $1.00,
in each case net to the seller in cash, without interest, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated August 30,
1996 (the "Offer to Purchase") and in the related Letter of Transmittal (which,
together with the Offer to Purchase, constitute the "Offer"). Tendering
stockholders and Warrant holders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, transfer
taxes on the purchase of Shares or Warrants pursuant to the Offer. The purpose
of the Offer is to acquire for cash as many outstanding Shares and Warrants as
possible as a first step in acquiring the entire equity interest in the
Company. Following the consummation of the Offer, the Purchaser intends to
effect the merger described below.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, SEPTEMBER 27, 1996, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
<PAGE>
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the Expiration Date (as defined below) a
number of Shares which, when added to the Shares owned by Parent, constitutes
at least 51% of the voting power (determined on a fully diluted basis,
including the exercise in full of all options and Warrants outstanding, other
than Warrants validly tendered and accepted for payment pursuant to the Offer)
on the date of purchase, of all the securities of the Company entitled to vote
generally in the election of directors or in a merger (the "Minimum Condition"),
and (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 the Shares pursuant to the Offer having expired or been terminated.
See Section 14 of the Offer to Purchase.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
August 24, 1996 (the "Merger Agreement"), among Parent, the Purchaser and the
Company. The Merger Agreement provides that, among other things, the Purchaser
will make the Offer and that following the purchase of Shares and Warrants
pursuant to the Offer and the satisfaction of the other conditions set forth in
the Merger Agreement and in accordance with relevant provisions of the Delaware
General Corporation Law, the Purchaser will merge with and into the Company
(the "Merger"). Following consummation of the Merger, the Company will continue
as the surviving corporation and will be a wholly owned subsidiary of Parent.
At the effective time of the Merger (the "Effective Time"), each Share issued
and outstanding immediately prior to the Effective Time (other than Shares held
by the Company as treasury stock or by any subsidiary of the Company or by
Parent, the Purchaser or any other subsidiary of Parent and other than Shares
held by a holder who has not voted in favor of the Merger or consented thereto
in writing and who has demanded appraisal for such Shares in accordance with
Section 262 of the Delaware General Corporation Law) will be converted into the
right to receive cash without interest in an amount equal to the price per
Share paid pursuant to the Offer.
The Board of Directors of the Company has unanimously determined that the
Offer and the Merger are fair to, and in the best interests of, the Company and
its stockholders and Warrant holders, has approved the Offer and the Merger and
recommends that the Company's stockholders and Warrant holders accept the Offer
and tender their Shares and Warrants pursuant to the Offer.
The Purchaser reserves the right, subject to the terms of the Merger
Agreement, to extend the Offer by giving oral or written notice of such
extension to the Depositary. Any such extension will be followed as promptly as
practicable by public announcement thereof no later than 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date.
The Offer is subject to certain conditions set forth in the Offer to
Purchase. If any such condition is not satisfied, the Purchaser may (a)
terminate the Offer and not accept for payment or pay for any Shares or
Warrants and return all tendered Shares and Warrants to tendering stockholders
and Warrant holders, (b) waive all the unsatisfied conditions and accept for
payment and pay for all Shares and Warrants validly tendered prior to the
Expiration Date, or (c) extend the Offer and, subject to the right of
stockholders and Warrant holders to withdraw Shares and Warrants until the
Expiration Date as set forth below, retain the Shares and Warrants that have
been tendered during the period or periods for which the Offer is extended.
For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment (and thereby purchased) validly tendered Shares and Warrants when,
as and if the Purchaser gives oral or written notice to First Chicago Trust
Company of New York (the "Depositary") of its acceptance of the tenders of such
Shares and Warrants. Payment for Shares and Warrants accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares and Warrants (or a confirmation of a book-entry
transfer with respect to such Shares into the Depositary's account at one of
the Book-Entry Transfer Facilities (as defined in the Offer to Purchase)), a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other documents required by the Letter of Transmittal. Under
no circumstances will interest on the purchase price for Shares or Warrants be
paid, regardless of any delay in making such payment.
The term "Expiration Date" means 12:00 midnight, New York City time, on
Friday, September 27, 1996, unless and until the Purchaser shall have extended
the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by the Purchaser, shall expire.
Tenders of Shares and Warrants made pursuant to the Offer may be withdrawn
at any time prior to the Expiration Date. Thereafter, such tenders are
irrevocable, except that they may be withdrawn at any time after October 28,
1996 unless theretofore accepted for payment as provided in the Offer to
Purchase. To be effective, a written or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses
set forth in the Offer to Purchase and must specify the name of the person who
tendered the Shares or Warrants to be withdrawn and the number of Shares or
Warrants to be withdrawn and the name of the registered holder, if different
from that of the person who tendered such Shares or Warrants. If the Shares or
Warrants to be withdrawn have been delivered to the Depositary, a signed notice
of withdrawal with (except in the case of Shares or Warrants tendered by an
Eligible Institution (as defined in the Offer to Purchase)) signatures
guaranteed by an Eligible Institution must be submitted prior to the release of
such Shares or Warrants. In addition, such notice must specify, in the case of
Shares or Warrants tendered by delivery of certificates, the name of the
registered holder (if different from that of the tendering stockholder or
Warrant holder) and the serial numbers shown on the particular certificates
evidencing the Shares or Warrants to be withdrawn or, in the case of Shares
tendered by a book-entry transfer, the name and number of the account at one of
the Book-Entry Transfer Facilities (as defined in the Offer to Purchase) to be
credited with the withdrawn Shares or Warrants.
The information required to be disclosed by paragraph (e)(1)(vii) of
14d-6 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended, is contained in the Offer to Purchase and is incorporated
herein by reference.
The Company has agreed to provide the Purchaser with the Company's
stockholder and Warrant holder lists and security position listings for the
purpose of disseminating the Offer to stockholders and Warrant holders. The
Offer to Purchase and the related Letter of Transmittal and other related
materials will be mailed to record holders of Shares and Warrants, and will be
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the stockholder
and Warrant holder list or, if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares or Warrants.
The Offer to Purchase and the related Letter of Transmittal contain
important information which should be read carefully before any decision is
made with respect to the Offer.
Requests for copies of the Offer to Purchase, the related Letter of
Transmittal and other tender offer materials may be directed to the Information
Agent or the Dealer Manager as set forth below, and copies will be furnished
promptly at the Purchaser's expense. The Purchaser will not pay any fees or
commissions to any broker or dealer or any other person (other than the Dealer
Manager and the Information Agent) for soliciting tenders of Shares and
Warrants pursuant to the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue
New York, New York 10022
(212) 754-8000 (collect)
or
Call Toll Free: (800) 566-9058
The Dealer Manager for the Offer is:
BEAR, STEARNS & CO. INC.
245 Park Avenue
New York, New York 10167
Call Toll Free: (800) 296-7709
August 30, 1996
<PAGE>
EXHIBIT (a)(8)
[LOGO] COMPANY BRIEFING BOOK
Press Releases
- --------------------------------------------------------------------------------
AUGUST 26, 1996
- --------------------------------------------------------------------------------
COLUMBUS MCKINNON CORPORATION ANNOUNCES PROPOSED ACQUISITION OF
YALE INTERNATIONAL, INC.
BUFFALO, N.Y., Aug. 26 /PRNewswire/ -- Columbus McKinnon Corporation (Nasdaq:
CMCO) announced today that it has entered into a definitive merger agreement to
acquire Spreckels Industries, Inc., also known as Yale International, Inc.
(Nasdaq: YALE).
Yale manufactures and distributes a diversified line of material handling and
industrial component products which broadens Columbus McKinnon's product
offerings. Principal brand names are Yale, Duff-Norton, Coffing, Little Mule
and American Lifts.
Upon completion of the acquisition, Columbus McKinnon estimates it will have
annual revenues approaching $500 million with approximately 3,400 employees.
The Company expects to compete more effectively overseas with the combined
resources of the companies, while continuing the positive relationships each
enjoys with current customers.
Herb Ladds, President and Chief Executive Officer of Columbus McKinnon
Corporation said, "This transaction will help Columbus McKinnon to achieve the
objectives of our strategic plan, particularly with regard to expanding our
international business, broadening our product offering and meeting or exceeding
our acquisition criteria."
Gary Tessitore, President and Chief Executive Officer of Yale added, "We are
extremely pleased that we were able to reach this agreement with Columbus
McKinnon as the combined organization will be better able to compete with the
large international competitors in the material handling market."
The agreement, which was approved by the Columbus McKinnon and Yale Boards of
Directors, provides that Columbus McKinnon, on or before August 30, 1996, will
commence a tender offer for all outstanding shares of Yale at a purchase price
of $24 per share. Columbus McKinnon will also offer to purchase all of Yale's
outstanding warrants at a price equal to the difference between the exercise
price and $24. The tender offer is subject to a number of conditions including,
among others, that the number of shares of common stock tendered constitutes a
majority of Yale's shares outstanding.
Columbus McKinnon designs, manufactures and sells a broad range of material
handling, lifting and positioning products which are sold in domestic and
international markets. Its products are sold through distributors to end-users
for numerous applications in the general manufacturing, crane building, mining,
construction, transportation, entertainment, power generation, waste management,
agriculture, marine, medical and other markets, and to hardware and farm
equipment distributors, mass merchandisers and rental outlets for consumer use.
Columbus McKinnon stock trades on the Nasdaq National Market System under the
symbol, "CMCO."
/CONTACT: Robert L. Montgomery, Jr., Executive Vice President and Chief
Financial Officer of Columbus McKinnon Corporation, 716-689-5400/
<PAGE>
EXHIBIT (b)(1)
FLEET BANK
August 23, 1996
Columbus McKinnon Corporation
140 John James Audubon Parkway
Amherst, New York 14228-1197
Attention: Robert L. Montgomery, Jr.
Executive Vice President
Dear Sirs:
You have advised Fleet Bank ("Fleet") that Columbus McKinnon Corporation
-----
(the "Borrower") will form a wholly-owned subsidiary ("AcquisitionCo") which
-------- -------------
will seek to acquire (the "Acquisition") a corporation previously identified by
-----------
you to Fleet in writing ("Target"). The Acquisition will be accomplished
------
through a tender offer (the "Tender Offer") to be made by AcquisitionCo for
------------
shares of common stock (the "Shares") of Target, followed by a merger (the
------
"Merger") of Target and AcquisitionCo (the surviving corporation of such merger,
------
the "New Company", which will be a wholly-owned subsidiary of the Borrower
-----------
following the Merger). Pursuant to the Tender Offer, the Borrower will offer to
purchase not less than a majority of the shares of Target for cash, in amounts
consistent with the cost of the Acquisition previously disclosed in writing to
Fleet.
Fleet is pleased to advise you of its commitment to provide up to the full
amount of a $325,000,000 credit facility (the "Credit Facility") on the terms
---------------
and conditions summarized in this letter and in the Summary of Terms and
Conditions attached to this letter (the "Term Sheet"). The Credit Facility will
----------
be used (i) to finance the purchase price of the Shares in the Tender Offer and
the Merger and to pay fees and expenses of the Acquisition, (ii) to refinance
the existing indebtedness of Target, (iii) to refinance any existing
indebtedness of Borrower and (iv) for general corporate purposes.
Although Fleet is committing to provide all of the Credit Facility on a
fully underwritten basis, Fleet expects that a portion of the Credit Facility
will be made available by other financial institutions (such lenders including
Fleet, the "Banks"). It is agreed that Fleet will act as the sole
-----
administrative agent (in such capacity, the "Administrative Agent") for the
--------------------
Credit Facility. Fleet will be responsible for preparing and negotiating
definitive documentation for the Credit Facility and Fleet will manage the
syndication effort of forming
<PAGE>
Columbus McKinnon Corporation -2- August 23, 1996
the syndicate of lenders that will make the Credit Facility available. No
additional agents, co-agents or arrangers will be appointed unless the Borrower
and Fleet so agree.
You agree to assist Fleet in forming any such syndicate and to provide
Fleet and the other Banks, promptly upon request, with all information
reasonably deemed necessary by them (consistent with past practice) to complete
successfully the syndication, including, but not limited to, (i) an information
package for delivery to potential syndicate members and participants and (ii)
all information and projections prepared by you or your advisers relating to the
transactions described herein. Prior to the closing of the Credit Facility you
agree to refrain from any other financings during such syndication process
unless otherwise agreed to by Fleet. You further agree to make appropriate
officers and representatives of the Borrower and its subsidiaries available to
participate in information meetings for potential syndicate members and
participants at such times and places as Fleet may reasonably request.
Fleet reserves the right, based on market reception, with your consent
(which shall not be unreasonably withheld or delayed), to reallocate the
aggregate principal amount of the Credit Facilities among the Revolving
Facility, the Term A Facility and the Term B Facility and/or to otherwise change
the structure or terms thereof prior to the closing of the Credit Facilities if
Fleet determines that such reallocation or changes are advisable in order to
ensure a successful syndication or an optimal credit structure and if the
aggregate amount of the Credit Facilities remains unchanged.
You represent and warrant and covenant that (i) all information which has
been or is hereafter made available to Fleet by you or any of your
representatives in connection with the transactions contemplated hereby is and
will be complete and correct in all material respects with respect to the
matters such information purports to cover and does not and will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein not materially misleading in
light of the circumstances under which such statements have been or will be made
and (ii) all financial projections that have been or are hereafter prepared by
you and made available to Fleet or any other participants in the Credit Facility
have been or will be prepared in good faith based upon reasonable assumptions.
You agree to supplement the information and projections referred to in clauses
(i) and (ii) above from time to time until completion of the syndication so that
the representations and warranties in the preceding sentence remain correct.
In arranging and syndicating the Credit Facility, Fleet may use and rely on
such information and projections without independent verification thereof.
<PAGE>
Columbus McKinnon Corporation -3- August 23, 1996
In connection with the syndication of the Credit Facility, Fleet may, in
its discretion, allocate to other Banks portions of any fees payable to Fleet in
connection with the Credit Facility. You agree that no Bank will receive any
compensation of any kind for its participation in the Credit Facility, except as
expressly provided for in this letter, the Term Sheet or in the Fee Letter
referred to below.
Please note, however, that the terms and conditions of this commitment and
undertaking are not limited to those set forth in this letter. Those matters
that are not covered or made clear herein or in the attached Term Sheet are
subject to mutual agreement of the parties. The terms and conditions of this
commitment and undertaking may be modified only in writing. In addition, this
commitment and undertaking is subject to: (a) receipt by Fleet of that portion
of the fees to have been paid to it on the date hereof in accordance with the
terms of the Fee Letter, (b) the preparation, execution and delivery of mutually
acceptable loan documentation, including a credit agreement incorporating
substantially the terms and conditions outlined herein and in the Term Sheet,
(c) the absence of (i) a material adverse change in the business, condition
(financial or otherwise), operations, performance, properties or prospects of
either (A) Borrower and its subsidiaries, taken as a whole, since March 31, 1996
or (B) Target and its subsidiaries, taken as a whole, since June 30, 1995, and
(ii) any material adverse change in loan syndication or financial or capital
market conditions generally from those currently in effect, (d) the accuracy and
completeness of all representations that you make to us and all information that
you furnish to us in connection with this commitment and undertaking and your
compliance with the terms of this letter, (e) no development or change occurring
after the date hereof, and no information becoming known after the date hereof,
that (i) results in or could reasonably be expected to result in a material
change in, or material deviation from, the information previously delivered by
you or could reasonably be expected to be materially adverse to you or any of
your subsidiaries or to the Administrative Agent or the Banks, or to the legal,
tax, accounting or financial aspects of the Acquisition, or (ii) has had or
could reasonably be expected to have a Material Adverse Effect (as defined under
the section "Conditions Precedent to Initial Extension of Credit" in the Term
Sheet) and (f) the negotiation and delivery of definitive documentation on or
before December 31, 1996. This commitment is also subject to a favorable
recommendation by the Board of Directors of Target to Target's shareholders
with respect to the Tender Offer. If such favorable recommendation is not
forthcoming or is withdrawn Fleet's obligations hereunder are terminated.
The costs and expenses of Fleet (including, without limitation, the
reasonable fees and expenses of its counsel and its syndication and other out-
of-pocket expenses) in
<PAGE>
Columbus McKinnon Corporation -4- August 23, 1996
connection with the preparation, execution and delivery of this letter and the
definitive financing agreements shall be for your account. You further agree to
indemnify and hold harmless Fleet and each director, officer, employee and
affiliate or control person thereof (each an "indemnified person") from and
against any and all actions, suits, proceedings (including any investigations or
inquiries), claims, losses, damages, liabilities or expenses of any kind or
nature whatsoever which may be incurred by or asserted against or involve Fleet
or any such indemnified person as a result of or arising out of or in any way
related to or resulting from the Acquisition, or this letter or any eventual
extension of credit, and, upon demand, to pay and reimburse Fleet and each
indemnified person for any legal or other out-of-pocket expenses incurred in
connection with investigating, defending or preparing to defend any such action,
suit, proceeding (including any inquiry or investigation) or claim (whether or
not Fleet or any such person is a party to any action or proceeding out of which
any such expenses arise); provided, however, that you shall not have to
-----------------
indemnify any indemnified person against any loss, claim, damage, expense or
liability which resulted solely from the gross negligence or willful misconduct
of such indemnified person. This letter is issued for your benefit only and no
other person or entity may rely hereon. Neither Fleet nor any of its affiliates
shall be responsible or liable to you or any other person for any damages which
may be alleged as a result of this letter.
The provisions of this letter are supplemented as set forth in a separate
fee letter dated the date hereof from us to you (the "Fee Letter") and are
----------
subject to the terms of such Fee Letter. By executing this letter, you
acknowledge that this letter, the Fee Letter and the letters, dated the date
hereof, concerning the cost of the Acquisition and the satisfaction of certain
conditions are the only agreements between you and Fleet with respect to the
Credit Facility and set forth the entire understanding of the parties with
respect thereto. Neither this letter nor the Fee Letter nor the other letters
referred to in the preceding sentence may be changed except pursuant to a
writing signed by each of the parties hereto.
Your obligations under this letter and the Fee Letter with respect to fees,
indemnification, cost and expenses, and confidentiality shall survive the
expiration or termination of this letter.
This letter is intended to be solely for the benefit of the parties and is
not intended to confer any benefits upon, or create any rights in favor of, any
person other than the parties hereto and shall not be assignable by you without
the prior written consent of Fleet. This letter may be executed in any number
of counterparts, each of which shall be an
<PAGE>
Columbus McKinnon Corporation -5- August 23, 1996
original and all of which, when taken together, shall constitute one agreement.
This letter shall be governed by, and construed in accordance with, the laws of
the State of New York.
If you are in agreement with the foregoing, please sign and return to Fleet
the enclosed copies of this letter and the Fee Letter no later than 5:00 P.M.,
New York time, on August 24, 1996. This offer shall terminate at such time
unless prior thereto we shall have received duly signed and completed copies of
such letters.
We look forward to working with you on this transaction.
Very truly yours,
FLEET BANK
By:____________________________________
Name: John J. Larry
Title: Vice President
Accepted and agreed to as of
the date first above written:
COLUMBUS McKINNON CORPORATION
By:__________________________________
Name: Robert L. Montgomery, Jr.
Title: Executive Vice President
<PAGE>
TERM SHEET
----------
COLUMBUS McKINNON CORPORATION
SUMMARY OF TERMS AND CONDITIONS
-------------------------------
<TABLE>
<CAPTION>
<S> <C>
Transaction: Borrower will form a single-purpose
wholly-owned subsidiary to effect the
transactions referenced in the first
paragraph of the Commitment Letter of
which these Terms and Conditions are
a part.
Borrower: The Borrower shall be the borrower;
provided the Administrative Agent may
designate certain subsidiaries of
Borrower to be the borrower in
certain events.
Guarantors: Borrower, all domestic Significant
Subsidiaries of the Borrower and all
of its foreign Significant
Subsidiaries to the extent agreed to
by Fleet and the Borrower, and, after
consummation of the Acquisition,
Target and all of its domestic
Significant Subsidiaries and all of
its foreign Significant Subsidiaries
to the extent agreed to by Fleet and
the Borrower. Each of the Guarantors
will unconditionally and irrevocably
guarantee all of the obligations of
the Borrower and the other Guarantors
under the loan documentation, which
in the case of Target shall be
limited to the extent required by
existing agreements of Target.
Administrative Fleet Bank (individually, "Fleet").
Agent: -----
Lenders: Fleet and other banks, financial
institutions and institutional
lenders acceptable to it. Each
Lender may assign all or any part of
its share thereof to one or more
other banks, financial institutions
and institutional lenders that are
Eligible Assignees (to be defined in
the loan documentation) and, upon
such assignment, such banks,
financial institutions or
institutional lenders, as the case
may be, shall become Lenders for all
purposes under the loan documentation.
Credit Facilities: Up to $325,000,000 at any time
outstanding, apportioned as
</TABLE>
<PAGE>
<TABLE>
<S> <C>
follows:
(a) Up to $125,000,000 as a Five
Year Senior Revolving Loan (the
"Revolving Facility"), with a
------------------
sublimit for standby and trade
letters of credit in an amount to be
agreed upon between Fleet and
Borrower. $75,000,000 of the
Revolving Facility shall be available
solely to finance the repurchase of
the 11-l/2% Senior Secured Notes due
2000 of Target ("Target Notes")
------------
pursuant to the Change of Control put
governing such Target Notes.
(b) $125,000,000 as a Five Year
Senior Tranche A Term Loan (the
"Term A Facility)".
---------------
(c) $75,000,000 as a Seven Year
Senior Tranche B Term Loan (the
"Term B Facility" and, together with the
---------------
Term A Facility, the "Term Facilities").
---------------
Letter of Credit: The expiration date of any trade
Letter of Credit shall be not more
than 180 days after the date of
issuance thereof, the expiration
date of any standby Letter of Credit
shall be not more than 365 days
after the date of issuance thereof
(although any such Letter of Credit
shall be renewable for an additional
365 day period on terms to be set
forth in the loan documentation) and
the expiration date of any Letter of
Credit shall not occur within 60
days prior to the maturity date of
the Revolving Facility.
Purpose: To finance in part the Acquisition,
to pay fees and expenses incurred in
connection with the Acquisition, to
refinance existing indebtedness, and
for general corporate purposes.
Closing Date: On or before December 31, 1996.
Termination Date: The fifth anniversary of the Closing
Date with respect to the Revolving
Facility and the Term A Facility,
and the seventh anniversary date of
the Closing Date for the Term B
Facility.
Security The Borrower and each of the Guarantors
shall grant the Administrative Agent and
the Lenders a valid and perfected first
priority (subject to certain exceptions
to be set forth in the loan
documentation) lien and security
interest in all of the following:
</TABLE>
2
<PAGE>
(a) All present and future personal property
and assets of the Borrower or
Guarantors, including, but not limited
to, machinery and equipment, inventory
and other goods, accounts receivable,
leaseholds, fixtures, bank accounts,
general intangibles, license rights,
patents, trademarks, tradenames,
copyrights, chattel paper, insurance
proceeds, contract rights, hedge
agreements, documents, instruments,
indemnification rights, tax refunds and
cash.
(b) All shares of capital stock of each of
Borrower's present and future domestic
subsidiaries (including Target), and
each present and future foreign
subsidiary of Borrower as agreed between
Fleet and the Borrower.
(c) All proceeds and products of the
property and assets described in clauses
(a) and (b) above.
The priority of the lien and security
interest of the Administrative Agent and the
Lenders shall be supported by such landlord
and mortgagee waivers, warehousemen and
bailee letters, bank consent agreements,
third party consents, intercreditor
agreements and other agreements as shall be
requested by the Lenders, in each case in
form and substance satisfactory to the
Lenders.
Any lien of the Administrative Agent or
Lenders on the assets of the Target shall be
subject to the limitations in the indenture
governing the Target Notes for so long as
such Target Notes are outstanding.
Availability: In one drawing, in the case of the
Term A Facility and Term B Facility,
and in multiple drawings from time to
time, in the case of the Revolving
Facility. Each borrowing under the
Revolving Facility shall be in an
amount of $5,000,000 or an integral
multiple of $1,000,000 in excess
thereof, and in each case shall be
made on not less than two business
day's notice in the case of Prime
Rate advances and on not less than
three business days' notice in the
case of Eurodollar Rate advances.
All advances shall be made by the
Lenders ratably in proportion to
their respective commitments under
the Credit Facility under which such
borrowing is being made.
3
<PAGE>
Availability under the Revolving
Facility shall be subject to a
borrowing base comprised of Eligible
Receivables and Eligible Inventory
(to be defined in the loan
documentation).
Amortization/Repayment (a) Term A Facility - Amortization
of Credit Facilities: ---------------
of the Term A Facility will be
quarterly in amounts agreed upon
between Fleet and Borrower.
(b) Term B Facility - Amortization
---------------
of the Term B Facility will be
quarterly in amounts agreed upon
between Fleet and Borrower.
(c) Revolving Facility - Fully
------------------
revolving until final maturity on
the fifth anniversary of the Closing
Date.
Optional Commitment The Borrower may, upon at least three
Reduction: business days' notice, terminate in
whole or reduce ratably in part, the
unused portion of the Revolving
Facility; provided, however, that
each partial reduction shall be in
an amount of $10,000,000 or an
integral multiple of $5,000,000 in
excess thereof.
Optional Prepayment: The Borrower may, upon at least one
business day's notice in the case of
Prime Rate advances and three
business days' notice in the case of
Eurodollar Rate advances, prepay, in
full or in part, the Credit
Facilities without premium or
penalty; provided, however, that
each partial prepayment shall be in
an amount of $5,000,000 or an
integral multiple of $1,000,000 in
excess thereof, and provided further
that no prepayment of Eurodollar
Rate advances shall be made other
than on the last day of the
applicable Interest Period therefor.
Each such prepayment shall be
applied to the Credit Facilities in
the following manner: first, ratably
to the Term A Facility and the Term
B Facility, and to the principal
repayment installments of each of
the Term Facilities in inverse order
of maturity; and second, to the
extent that no advances under the
Term Facilities remain outstanding,
to permanently reduce the Revolving
Facility.
Mandatory Prepayment and 100% of the net after-tax cash
Commitment Reduction: proceeds (a) from sales of property and
assets of Borrower and its subsidiaries
("Asset Sale") (excluding sales of inventory
----------
in the ordinary course of business) or (b) of
"Extraordinary Receipts" (to be defined in
the loan
4
<PAGE>
documentation and to exclude cash receipts in
the ordinary course of business), or 50% of
the net cash proceeds from the issuance of
additional equity of Borrower and its
subsidiaries ("Equity Issuance") otherwise
---------------
than as permitted under the loan
documentation, or 75% of Excess Cash Flow (to
be defined in the loan documentation) of
Borrower and its subsidiaries shall be
applied to prepay the Credit Facilities in
the following manner: first, ratably to the
Term A Facility and the Term B Facility, and
to the principal repayment installments of
each of the Term Facilities in inverse order
of maturity; and second, to the extent that
no advances under the Term Facilities remain
outstanding, to permanently reduce the
Revolving Facility. Such percentages will be
adjusted pursuant to an agreement between
Fleet and Borrower based upon the Borrower
meeting certain financial tests.
Interest Rates and Interest At the Borrower's option, any advance made to
Periods: it will be available at the rates and for the
Interest Periods stated below:
(a) Prime Rate - a fluctuating rate
----------
equal to (i) Fleet's "Prime Rate"
(360 day basis) plus (ii) the
Applicable Margin (as hereinafter
defined). Fleet's "Prime Rate" is a
fluctuating interest rate equal to
the higher from time to time of (A)
the rate of interest announced
publicly by Fleet in Boston,
Massachusetts, as its prime rate and
(B) a rate equal to 1/2 of 1% per
annum above the weighted average of
the rates on overnight federal funds
transactions with members of the
Federal Reserve System arranged by
federal funds brokers, as determined
for any day by Fleet.
Interest based on the Prime Rate
shall be payable monthly in arrears.
Eurodollar Rate - a periodic fixed
---------------
rate equal to (i) LIBOR (360 day
basis) plus, (ii) the Applicable
Margin. LIBOR is the average rate
per annum (rounded upward to the
nearest 1/4 of 1%) at which deposits
in U.S. dollars are offered to Fleet
by prime banks in the London
interbank market at 11:00 A.M.
(London time) two business days
before the first day of the
applicable Interest Period and in
amounts substantially equal to the
Eurodollar Rate advance to be made by
Fleet as part of the applicable
5
<PAGE>
borrowing and with a maturity equal to
such Interest Period, adjusted for
reserve requirements.
Interest Periods for Eurodollar-Rate
borrowings shall be one, two, three
or six months, as selected by the
Borrower. Interest based on the
Eurodollar Rate shall be payable in
arrears on the earlier of (A) the
last day of the applicable Interest
Period and (B) quarterly.
The "Applicable Margin" means, at any time
-----------------
and from time to time (1) with respect to the
Revolving Facility and Term A Facility, 1.25
% per annum for Prime Rate borrowings and
2.50% per annum for Eurodollar Rate
borrowings and (2) with respect to the Term B
Facility, 1.75% per annum for Prime Rate
borrowings and 3.00% per annum for Eurodollar
Rate borrowings. The Applicable Margin for
the Credit Facility will be adjusted in
accordance with the step-ups and step-downs
of the percentages set forth above to be
agreed between Fleet and the Borrower if and
when the Borrower meets certain consolidated
financial targets to be specified in the loan
documentation.
During the continuance of any default under
the loan documentation, the Applicable Margin
on all obligations owing under the loan
documentation shall increase by 2% per annum.
Unused Commitment Fee: 0.50% per annum on the unused portion
of each Lender's share of the
Revolving Facility from the Closing
Date, payable on (a) the Closing
Date and, thereafter, quarterly in
arrears and (b) the date (whether
before or after the Closing Date) of
the termination or expiration of the
commitments.
Letter of Credit Fees: Fees for letters of credit issued as
part of the Revolving Facility (each
a "Letter of Credit") shall be
----------------
determined based on margins
comparable to the Applicable Margin
for Eurodollar Rate borrowings under
the Revolving Facility and shall be
payable on the average daily
outstanding undrawn amount of all
Letters of Credit. A separate fee
to be agreed between the Borrower
and Fleet shall be payable to the
fronting bank for the Letters of
Credit, payable on the date of
issuance thereof.
Annual Administrative As set forth in the Fee Letter.
Agency Fee:
6
<PAGE>
Conditions Precedent to Initial Those customarily found in credit agreements
Extension of Credit: for similar secured financings and others
appropriate in the judgment of Fleet,
including, without limitation, the following:
(a) The final terms and conditions of the
Acquisition (i) shall be as described
herein and otherwise consistent with the
description thereof received in writing
as part of the Pre-Commitment
Information (as hereinafter defined) and
(ii) shall be otherwise satisfactory to
the Lenders; and all documentation
relating to the Credit Facility shall be
in form and substance satisfactory to
the Lenders. The Acquisition shall have
been consummated in accordance with the
definitive merger agreement, without any
waiver or amendment of any term or
condition therein not consented to by
the Lenders and in compliance with all
applicable laws and all necessary
approvals; and the Lenders shall be
satisfied that any applicable state
takeover law and any applicable
supermajority charter provisions are not
applicable to the Acquisition or that
any conditions to avoiding such
restrictions have been satisfied.
(b) All documentation relating to the Credit
Facilities, including a credit agreement
incorporating substantially the terms
and conditions outlined herein, shall be
in form and substance satisfactory to
the Lenders.
(c) The Lenders shall be satisfied with the
corporate and legal structure and
capitalization of the Borrower and each
of the Guarantors, including, without
limitation, the charter and bylaws of
the Borrower and each such Guarantor and
each agreement or instrument relating
thereto.
(d) The Lenders shall have a valid and
perfected first priority (subject to
certain exceptions to be set forth in
the loan documentation) lien and
security interest in the capital stock
and in the other collateral referred to
under the section "Security" above; all
filings, recordations and searches
necessary or desirable in connection
with such liens and security interests
shall have been duly made; and
7
<PAGE>
all filing and recording fees and
taxes shall have been duly paid.
(e) There shall have occurred no material
adverse change in the business,
condition (financial or otherwise),
operations, performance, properties or
prospects of either (i) Borrower and its
subsidiaries, taken as a whole, since
March 31, 1996 or (ii) Target and its
subsidiaries, taken as a whole, since
June 30, 1995.
(f) There shall exist no action, suit,
investigation, litigation or proceeding
pending or threatened in any court or
before any arbitrator or governmental or
regulatory agency or authority that (i)
could reasonably be expected to (A) have
a material adverse effect on the
business, condition (financial or
otherwise), operations, performance,
properties or prospects of Borrower and
its subsidiaries, taken as a whole, or
Target and its subsidiaries, taken as a
whole, except for claims or litigation
previously disclosed to the
Administrative Agent in writing; (B)
adversely affect the ability of the
Borrower or any Guarantor to perform its
obligations under the loan documentation
or (C) adversely affect the rights and
remedies of the Administrative Agent and
the Lenders under the loan documentation
or (ii) purports to adversely affect any
aspect of the Acquisition or the Credit
Facilities (collectively, a "Material
--------
Adverse Effect"); and there shall have
--------------
been no material adverse change in the
status, or financial effect on the
Borrower or any of its subsidiaries or
the Target or any of its subsidiaries,
of the litigation from that described in
writing in the Pre-Commitment
Information.
(g) All governmental and third party
consents and approvals necessary in
connection with each aspect of the
Acquisition and the Credit Facilities
shall have been obtained (without the
imposition of any conditions that are
not acceptable to the Lenders) and shall
remain in effect; all applicable waiting
periods shall have expired without any
adverse action being taken by any
competent authority; and no law or
regulation shall be applicable in
8
<PAGE>
the judgment of the Lenders that
restrains, prevents or imposes material
adverse conditions upon any aspect of
the Acquisition or the Credit
Facilities.
(h) All of the information provided by or on
behalf of the Borrower or any of its
subsidiaries or by or on behalf of the
Target or any of its subsidiaries to the
Administrative Agent and the Lenders
prior to their commitment (the "Pre-
---
Commitment Information") shall be true
----------------------
and correct in all material aspects; and
no development or change shall have
occurred, and no additional information
shall have come to the attention of the
Administrative Agent or the Lenders,
that (i) has resulted in or could
reasonably be expected to result in a
material change in, or material
deviation from, the Pre-Commitment
Information or (ii) has had or could
reasonably be expected to have a
Material Adverse Effect.
(i) All loans made by the Lenders to the
Borrower or any of its affiliates shall
be in full compliance with the Federal
Reserve's Margin Regulations.
(j) The Borrower and each of the Guarantors
shall have delivered letters, in form
and substance satisfactory to the
Lenders, attesting to the Solvency (as
hereinafter defined) of the Borrower or
such Guarantor, as the case may be, in
each case individually and together with
its subsidiaries, taken as a whole,
immediately before and immediately after
giving effect to the Acquisition, from
their respective chief financial
officers. With respect to the Solvency
of Borrower or the Guarantors, the
Administrative Agent shall have received
such appraisals or other analyses from
independent experts of any Borrower or
Guarantor as it may request, and such
appraisals and analyses will be
satisfactory to the Administrative
Agent. As used herein, the term
"Solvency" of any person means (i) the
--------
fair value of the property of such
person exceeds its total liabilities
(including, without limitation,
contingent liabilities), (ii) the
present fair saleable value of the
assets of such person is not less than
the amount that will be required to
pay its probable liability on its
debts as they become absolute and
9
<PAGE>
matured, (iii) such person does not
intend to, and does not believe that it
will, incur debts or liabilities beyond
its ability to pay as such debts and
liabilities mature and (iv) such person
is not engaged, and is not about to
engage, in business or a transaction for
which its property would constitute an
unreasonably small capital.
(k) The Borrower shall have demonstrated to
the Lenders' satisfaction (i) whether
the operations of the Borrower and its
subsidiaries and the Target and its
subsidiaries comply in all material
respects with applicable environmental,
health and safety statutes and
regulations, including, without
limitation, regulations promulgated
under the Federal Resource Conservation
and Recovery Act; (ii) whether such
operations are the subject of any
federal, state or local investigation
evaluating the need for remedial action,
involving an expenditure which would
have a Material Adverse Effect on the
Borrower and its subsidiaries, taken as
a whole, or Target and its subsidiaries,
taken as a whole, to respond to a
release or threatened release of any
toxic or hazardous waste or substance
into the environment; (iii) whether the
Borrower or any of the Guarantors has or
could reasonably be expected to have any
contingent liability which would have a
Material Adverse Effect on the Borrower
and its subsidiaries, taken as a whole,
or Target and its subsidiaries, taken as
a whole, in connection with any release
of any toxic or hazardous waste or
substance into the environment; (iv)
that the Borrower, Target and their
respective subsidiaries have complied in
all material respects with applicable
environmental cleanup responsibility
statutes in connection with the
Acquisition; and (v) the Borrower has
completed such environmental audits and
investigations (including "Phase I"
environmental audits), as the
Administrative Agent may request with
respect to the operations of the
Borrower and its subsidiaries and the
Target and its subsidiaries and such
audits and investigations have not
uncovered any condition or conditions
not disclosed in the Pre-Commitment
Information which could be reasonably
expected to have a Material Adverse
Effect on the
10
<PAGE>
Borrower and its subsidiaries, taken as
a whole, or Target and its subsidiaries,
taken as a whole.
(l) The Lenders shall be satisfied that (i)
the Borrower and its subsidiaries will
be able to meet their respective
obligations under all employee and
retiree welfare plans, (ii) the employee
benefit plans of the Borrower and its
subsidiaries and of the Target and its
subsidiaries are, in all material
respects, funded in accordance with the
minimum statutory requirements, (iii) no
material "reportable event" (as defined
in ERISA, but excluding events for which
reporting has been waived) has occurred
as to any such employee benefit plan and
(iv) no termination of, or withdrawal
from, any such employee benefit plan has
occurred or is contemplated that could
reasonably be expected to result in a
material liability.
(m) The Lenders shall be satisfied with the
amount, types and terms and conditions
of all insurance maintained by or, after
giving effect to the consummation of the
Acquisition, to be maintained by the
Borrower and its subsidiaries, and the
Lenders shall have received endorsements
naming the Administrative Agent, on
behalf of the Lenders, as an additional
insured under all insurance policies to
be maintained with respect to the
properties of the Borrower and its
subsidiaries forming part of the
Lenders' collateral described under the
section "Security" above.
(n) The Lenders shall have received all
additional financial, business and other
information regarding the Borrower, the
Target and their respective subsidiaries
and properties as they shall have
reasonably requested.
(o) The Lenders shall have received (i)
satisfactory opinions of counsel for the
Borrower and the Guarantors, of counsel
for the Administrative Agent and of
local and special counsel for the
Lenders as to the transactions
contemplated hereby and (ii) such
corporate resolutions, certificates and
other documents as the Lenders shall
reasonably request.
11
<PAGE>
(p) There shall exist no default under any
of the loan documentation, and the
representations and warranties of the
Borrower, each of the Guarantors and
each of their respective subsidiaries
therein shall be true and correct
immediately prior to, and after giving
effect to, the initial extension of
credit under the loan documentation .
(q) All accrued fees and expenses of the
Administrative Agent and the Lenders
(including the fees and expenses of
counsel for the Administrative Agent and
local counsel for the Administrative
Agent) shall have been paid.
(r) The Borrower and each of the Guarantors
shall have given the Administrative
Agent such access to their books and
records as the Administrative Agent may
have requested in order to carry out its
investigations, appraisals and analyses,
including, but not limited to,
calculation of Eligible Receivables and
Eligible Inventory.
(s) The Borrower and Fleet shall use their
best commercially reasonable efforts to
reach a mutually agreeable solution to
refinance or otherwise provide for the
Target Notes.
Conditions Precedent to There shall exist no default under
Subsequent Extensions any of the loan documentation, and
of Credit: the representations and warranties of
the Borrower, each of the Guarantors
and each of their respective
subsidiaries therein shall be true
and correct immediately prior to, and
after giving effect to such extension
of credit.
Representation and Those customarily found in credit
Warranties: agreements for similar secured
financings and others appropriate in
the judgment of Fleet.
Covenants: Those affirmative, negative and
financial covenants customarily found
in credit agreements for similar
secured financings (applicable to the
Borrower and each of its
subsidiaries) and others appropriate
in the judgment of Fleet, including,
without limitation, the following:
(a) Affirmative Covenants - (i) Compliance
---------------------
with laws and regulations (including,
without limitation, ERISA and
environmental laws); (ii) payment of
taxes and other
12
<PAGE>
obligations; (iii) maintenance of
appropriate and adequate insurance; (iv)
preservation of corporate existence,
rights (charter and statutory),
franchises, permits, licenses and
approvals; (v) preparation of
environmental reports; (vi) visitation
and inspection rights; (vii) keeping of
proper books in accordance with
generally accepted accounting
principles; (vii) maintenance of
properties; (viii) performance of
leases, related documents and other
material agreements; (ix) conducting
transactions with affiliates on terms
equivalent to those obtainable on an
arm's-length basis; (x) further
assurances as to perfection and priority
of security interests; (xi) grant of
security on additional property and
assets upon the occurrence of an Event
of Default; and (xii) customary
financial and other reporting
requirements (including, without
limitation, audited annual financial
statements and monthly and quarterly
unaudited financial statements, in each
case prepared on a consolidated and a
consolidating basis, notices of
defaults, compliance certificates,
annual business plans and forecasts,
reports to shareholders and other
creditors and other business and
financial information as any Lender
shall reasonably request).
(b) Negative Covenants - Restrictions on (i)
------------------
liens (other than liens securing the
Credit Facilities); (ii) debt,
guaranties or other contingent
obligations; (iii) lease obligations in
excess of an amount to be agreed between
the Borrower and the Lenders; (iv)
mergers and consolidations; (v) sales,
transfers and other dispositions of
assets (other than sales of inventory in
the ordinary course of business); (vi)
loans, acquisitions, joint ventures and
other investments; (vii) dividends and
other distributions to stockholders;
(viii) issuing or repurchasing shares of
capital stock, (ix) prepaying, redeeming
or repurchasing debt; (x) capital
expenditures; (xi) granting negative
pledges other than to the Administrative
Agent and the Lenders, (xii) changing
the nature of its business; (xiii)
amending organizational documents, or
amending or otherwise modifying any
debt, any related document or any other
material agreement; and (xiv) changing
accounting policies or reporting
practices; in each of the foregoing
cases, with such
13
<PAGE>
exceptions as may be agreed upon in
the loan documentation.
(c) Financial Covenants - Funded Debt to
EBITDA, Interest Coverage, Fixed Charge
Coverage and Minimum Net Worth (each to
be defined in the loan documentation).
All of the financial covenants will be
calculated on a consolidated basis and
for each consecutive four fiscal quarter
period prior to such calculation.
Events of Default: Those customarily found in credit agreements
for similar secured financings and others
appropriate in the judgment of Fleet,
including, without limitation, (a) failure to
pay principal when due, or to pay interest,
fees and other amounts within two business
days after the same becomes due, under the
loan documentation; (b) any representation or
warranty proving to have been materially
incorrect when made or confirmed; (c) failure
to perform or observe covenants set forth in
the loan documentation within a specified
period of time, where customary and
appropriate, after notice or knowledge of
such failure; (d) cross-defaults to other
indebtedness in an amount to be agreed in the
loan documentation; (e) bankruptcy and
insolvency defaults (with grace period for
involuntary proceedings) (f) monetary
judgment defaults in an amount to be agreed
in the loan documentation and nonmonetary
judgment defaults that could reasonably be
expected to have a Material Adverse Effect;
(g) impairment of loan documentation or
security; (h) change of ownership or
operating control; (i) standard ERISA
defaults; and (j) the occurrence of any
material adverse change in the business,
condition (financial or otherwise),
operations, performance, properties or
prospects of the Borrower and its
subsidiaries, taken as a whole.
Interest Rate Protection: The Borrower shall obtain interest rate
protection in form and with parties
acceptable to the Lenders for a notional
amount to be agreed in the final loan
documentation.
Expenses: The Borrower shall pay all of the
Administrative Agent's due diligence,
syndication (including printing, distribution
and bank meetings), transportation, computer,
duplication, appraisal, audit,
14
<PAGE>
insurance, consultant, search, filing and
recording fees and all other out-of-pocket
expenses incurred by the Administrative Agent
(including the fees and expenses of counsel
for the Administrative Agent), whether or not
any of the transactions contemplated hereby
are consummated, as well as all expenses of
the Administrative Agent in connection with
the administration of the loan documentation.
The Borrower shall also pay the expenses of
the Administrative Agent and the Lenders in
connection with the enforcement of any of the
loan documentation.
Indemnity: The Borrower will indemnify and hold harmless
the Administrative Agent, each Lender and
each of their affiliates and their officers,
directors, employees, agents and advisors
(each an "Indemnified Party") from and
-----------------
against any and all claims, damages, losses,
liabilities and expenses (including, without
limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted
or awarded against any Indemnified Party, in
each case arising out of or in connection
with or by reason of, or in connection with
the preparation for a defense of, any
investigation, litigation or proceeding
arising out of, related to or in connection
with (a) the Acquisition or any related
transaction of Borrower or any of its
subsidiaries or its other affiliates and any
of the other transactions contemplated in the
loan documentation, (b) any acquisition or
proposed acquisition or similar business
combination or proposed business combination
by Borrower or any of its subsidiaries or
affiliates of all or any portion of the
shares of capital stock or substantially all
of the property and assets of any other
person, (c) the Credit Facilities and any use
made or proposed to be made with the proceeds
thereof or (d) the actual or alleged presence
of hazardous materials on any property of the
Borrower or any of its subsidiaries or any
environmental action or proceeding relating
in any way to the Borrower or any of its
subsidiaries or any of their respective
properties, in each case, whether or not such
investigation, litigation or proceeding is
brought by the Borrower, its shareholders or
creditors or an Indemnified Party or an
Indemnified Party is otherwise a party
thereto and whether or not the Acquisition is
consummated, except to the extent such claim,
damage, loss, liability or expense is found
in a final, nonappealable judgment by a court
of competent jurisdiction to have resulted
from such Indemnified Party's gross
negligence or willful
15
<PAGE>
misconduct. The Borrower will further agree
that no Indemnified Party shall have any
liability (whether direct or indirect, in
contract or tort or otherwise) to the
Borrower or any of its subsidiaries or to
their respective security holders or
creditors arising out of, related to or in
connection with the Acquisition or any of the
transactions contemplated in the Credit
Facilities, except for direct, as opposed to
consequential, damages determined in a final
nonappealable judgment by a court of
competent jurisdiction to have resulted from
such Indemnified Party's gross negligence or
willful misconduct.
Taxes: All payments to be free and clear of
any present or future taxes,
withholdings or other deductions
whatsoever (other than income taxes
in the jurisdiction of the Lenders'
applicable lending office). The
Lenders will use reasonable efforts
(consistent with their respective
internal policies and legal and
regulatory restrictions and so long
as such efforts would not otherwise
be disadvantageous to such Lenders)
to minimize to the extent possible
any applicable taxes, and the
Borrower will indemnify the Lenders
and the Administrative Agent for
such taxes paid by the Lenders or
the Administrative Agent.
Miscellaneous: Standard yield protection (including
compliance with risk-based capital
guidelines, increased costs,
payments free and clear of
withholding taxes and interest
period breakage indemnities),
Eurodollar illegality and similar
provisions, defaulting lender
provisions, waiver of jury trial and
submission to jurisdiction.
Governing Law: New York.
Counsel for the Winston & Strawn.
Administrative Agent:
16
<PAGE>
EXHIBIT (c)(1)
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
AMONG
COLUMBUS MCKINNON CORPORATION,
L ACQUISITION CORPORATION
AND
SPRECKELS INDUSTRIES, INC.
(KNOWN AS YALE INTERNATIONAL, INC.)
DATED AUGUST 24, 1996
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
THE OFFER........................... 1
SECTION 1.1 The Offer.......................................... 1
SECTION 1.2 Company Action..................................... 3
ARTICLE II
THE MERGER........................... 4
SECTION 2.1 The Merger........................................ 4
SECTION 2.2 Effective Time.................................... 4
SECTION 2.3 Effects of the Merger............................. 4
SECTION 2.4 Certificate of Incorporation; By-Laws............. 5
SECTION 2.5 Directors and Officers............................ 5
SECTION 2.6 Conversion of Securities.......................... 5
SECTION 2.7 Treatment of Employee and Director
Options........................................ 6
SECTION 2.8 Dissenting Shares and Section 262
Shares......................................... 6
SECTION 2.9 Surrender of Shares; Stock Transfer
Books.......................................... 7
SECTION 2.10 Withholding Taxes................................. 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY................ 9
SECTION 3.1 Organization and Qualification;
Subsidiaries.................................. 9
SECTION 3.2 Certificate of Incorporation and By-
Laws.......................................... 9
SECTION 3.3 Capitalization.................................. 9
SECTION 3.4 Authority Relative to This Agreement............ 11
SECTION 3.5 No Conflict; Required Filings and
Consents..................................... 11
SECTION 3.6 Material Contracts.............................. 12
SECTION 3.7 Compliance...................................... 12
SECTION 3.8 SEC Filings; Financial Statements............... 12
SECTION 3.9 Absence of Certain Changes or Events............ 14
SECTION 3.10 No Undisclosed Liabilities...................... 14
SECTION 3.11 Absence of Litigation........................... 14
SECTION 3.13 Tax Matters..................................... 16
SECTION 3.14 Environmental Liability......................... 17
SECTION 3.15 Licenses and Permits............................ 18
SECTION 3.16 Offer Documents; Proxy Statement................ 18
SECTION 3.17 Rights Agreement................................ 19
SECTION 3.18 Brokers......................................... 19
-i-
<PAGE>
Page
----
SECTION 3.19 State Takeover Laws....................... 19
SECTION 3.20 Exercise of Warrants...................... 19
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER.................... 20
SECTION 4.1 Corporate Organization.................... 20
SECTION 4.2 Authority Relative to This Agreement...... 20
SECTION 4.3 No Conflict; Required Filings and
Consents.............................. 20
SECTION 4.4 Offer Documents; Proxy Statement.......... 21
SECTION 4.5 Financing................................. 21
SECTION 4.6 Brokers................................... 22
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER.......... 22
SECTION 5.1 Conduct of Business of the Company
Pending the Merger.................... 22
ARTICLE VI
ADDITIONAL AGREEMENTS................. 25
SECTION 6.1 Stockholders Meeting...................... 25
SECTION 6.2 Proxy Statement........................... 25
SECTION 6.3 Company Board Representation; Section
14(f)............................... 26
SECTION 6.4 Access to Information; Confidentiality.... 27
SECTION 6.5 No Solicitation of Transactions........... 28
SECTION 6.6 Employee Benefits Matters................. 29
SECTION 6.7 Directors' and Officers' Indemnification
and Insurance....................... 29
SECTION 6.8 No Amendment to the Rights Agreement...... 29
SECTION 6.9 Further Action; Reasonable Efforts........ 29
SECTION 6.10 Public Announcements...................... 30
SECTION 6.11 Warrants.................................. 30
SECTION 6.12 Delivery of Director Agreements........... 30
ARTICLE VII
CONDITIONS OF MERGER................. 30
SECTION 7.1 Conditions to Obligation of Each Party
to Effect the Merger............... 30
SECTION 7.2 Conditions to Obligations of Purchaser ... 31
-ii-
<PAGE>
Page
----
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER................. 31
SECTION 8.1 Termination.......................................... 31
SECTION 8.2 Effect of Termination................................ 33
SECTION 8.3 Termination Fee...................................... 33
SECTION 8.4 Fees and Expenses.................................... 33
SECTION 8.5 Amendment............................................ 34
SECTION 8.6 Waiver............................................... 34
ARTICLE IX
GENERAL PROVISIONS ......................... 34
SECTION 9.1 Non-Survival of Representations,
Warranties and Agreements........................ 34
SECTION 9.2 Notices.............................................. 34
SECTION 9.3 Certain Definitions.................................. 35
SECTION 9.4 Severability......................................... 36
SECTION 9.5 Entire Agreement; Assignment......................... 37
SECTION 9.6 Parties in Interest.................................. 37
SECTION 9.7 Governing Law........................................ 37
SECTION 9.8 Headings............................................. 37
SECTION 9.9 Counterparts......................................... 37
SECTION 9.10 Disclosure Schedule.................................. 37
Annex A -- Offer Conditions
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AGREEMENT AND PLAN OF MERGER
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AGREEMENT AND PLAN OF MERGER, dated August 24, 1996 (this
"Agreement"), among COLUMBUS MCKINNON CORPORATION, a New York corporation
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("Parent"), L ACQUISITION CORPORATION, a Delaware corporation and a wholly owned
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subsidiary of Parent formed solely for the purpose of effecting the transactions
contemplated herein ("Purchaser"), and SPRECKELS INDUSTRIES, INC. (known as YALE
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INTERNATIONAL, INC.), a Delaware corporation (the "Company").
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WHEREAS, the Board of Directors of the Company has (i) determined that
the consideration to be paid for each outstanding share (collectively, the
"Shares") of Class A Common Stock, par value $.01 per share (the "Class A Common
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Stock") pursuant to the Offer and in the Merger (each as defined below) is fair
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to and in the best interests of the stockholders of the Company, (ii) approved
this Agreement and the transactions contemplated hereby and (iii) resolved to
recommend acceptance of the Offer and the Merger and approval of this Agreement
by such stockholders; and
WHEREAS, the Board of Directors of Parent and Purchaser have each
approved the merger (the "Merger") of Purchaser with and into the Company in
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accordance with the General Corporation Law of the State of Delaware ("Delaware
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Law"), upon the terms and subject to the conditions set forth herein;
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NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1 The Offer. (a) Provided that this Agreement shall not
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have been terminated in accordance with Section 8.1 and no event shall have
occurred and no circumstance shall exist which could result in a failure to
satisfy any of the conditions or events set forth in Annex A hereto (the "Offer
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Conditions"), as soon as reasonably practicable after the execution hereof (but
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in no event later than five business days after the public announcement by the
Company of the execution hereof) Purchaser shall, and Parent shall cause
Purchaser to, commence an offer to purchase (i) all of the outstanding Shares of
the Company, at a price of $24 per Share (the "Per Share Amount"), and (ii) all
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of the outstanding Warrants (as defined below), at a price equal to the
applicable Spread (as defined below), in each case net to the seller in cash
(the "Offer"). The obligation of Purchaser to accept for payment Shares and
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Warrants tendered shall be subject to the satisfaction of the
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Offer Conditions. Purchaser expressly reserves the right, in its sole
discretion, to waive any Offer Condition (other than the Minimum Condition (as
defined in Annex A hereto)) and to increase the Per Share Amount payable
pursuant to the Offer or make any other changes in the terms and conditions of
the Offer (provided that, without the written consent of the Company, no change
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may be made which decreases the Per Share Amount payable in the Offer, changes
the form of consideration payable in the Offer (other than by adding
consideration), reduces the maximum number of Shares or Warrants to be purchased
in the Offer or imposes conditions to the Offer in addition to the Offer
Conditions). Purchaser covenants and agrees that, subject to the terms and
conditions of this Agreement and the Offer, including but not limited to the
Offer Conditions, unless the Company otherwise consents in writing, Purchaser
will accept for payment and pay for Shares and Warrants validly tendered and not
properly withdrawn promptly following the expiration of the Offer, provided that
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Purchaser may extend the Offer up to the tenth business day after the later of
(i) the tenth business day after the initial expiration date of the Offer and
(ii) the date on which all such conditions shall first have been satisfied or
waived. It is agreed that the Offer Conditions are for the sole benefit of
Purchaser and may be asserted by Purchaser, regardless of the circumstances
giving rise to any such condition (including any action or inaction by Purchaser
or Parent not inconsistent with the terms hereof) or, except with respect to the
Minimum Condition, may be waived by Purchaser, in whole or in part at any time
and from time to time, in its sole discretion. For purposes of this Agreement,
the term "Warrants" means, collectively, the Company's issued and outstanding
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warrants to purchase shares of its Class A Common Stock at exercise prices of
$9.17 per share (the "$9.17 Warrants"), $11.67 per share (the "$11.67
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Warrants"), $15.00 per share (the "$15.00 Warrants") and $1.00 per share (the
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"$1.00 Warrants"), respectively. For purposes of this Agreement, the term
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"Spread" means, with respect to each Warrant, an amount equal to the difference,
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if positive, between the Per Share Amount and the exercise price of such
Warrant.
(b) As soon as reasonably practicable on the date the Offer is
commenced, Purchaser shall file with the Securities and Exchange Commission (the
"SEC") a Tender Offer Statement on Schedule 14D-1 (together with all amendments
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and supplements thereto, the "Schedule 14D-1") with respect to the Offer. The
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Schedule 14D-1 shall contain (included as an exhibit) or shall incorporate by
reference an offer to purchase (the "Offer to Purchase") and a form of the
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related letter of transmittal (the "Letter of Transmittal") (which Schedule 14D-
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1, Offer to Purchase, Letter of Transmittal and other documents, together with
any supplements or amendments thereto, are referred to herein collectively as
the "Offer Documents"). Each of Parent, Purchaser and the Company agrees
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promptly to correct any information provided by it for use in the Offer
Documents that shall have become false or misleading in any material respect,
and Parent and Purchaser further agree to take all steps
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necessary to cause the Schedule 14D-1 as so corrected to be filed with the SEC
and the other Offer Documents as so corrected to be disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. The Company and its counsel shall be given an opportunity to
review the Schedule 14D-1 prior to its being filed with the SEC. Each of Parent
and Purchaser agrees to provide the Company and its counsel in writing with any
written comments Parent and Purchaser or their counsel may receive from the SEC
with respect to the Offer Documents promptly after the receipt of such comments.
SECTION 1.2 Company Action. (a) The Company hereby approves of and
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consents to the Offer and represents and warrants that: (i) its Board of
Directors, at a meeting duly called and held on August 23, 1996, has unanimously
(A) determined that this Agreement and the transactions contemplated hereby,
including each of the Offer and the Merger, are fair to and in the best
interests of the holders of Shares and Warrants, (B) approved this Agreement and
the transactions contemplated hereby, including the Offer and the Merger, in all
respects and (C) resolved to recommend that the stockholders and holders of
Warrants (the "Warrantholders") of the Company accept the Offer, tender their
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Shares and Warrants to Purchaser thereunder and approve this Agreement and the
transactions contemplated hereby; and (ii) Salomon Brothers Inc (the "Financial
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Advisor") has delivered to the Board of Directors of the Company its written
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opinion (or oral opinion confirmed in writing) that the consideration to be
received by holders of Shares, other than Parent and Purchaser, pursuant to each
of the Offer and the Merger is fair to such holders from a financial point of
view. The Company has been authorized by the Financial Advisor to permit,
subject to prior review and consent by the Financial Advisor (such consent not
to be unreasonably withheld), the inclusion of such fairness opinion (or a
reference thereto) in the Offer Documents and in the Schedule 14D-9 referred to
below and the Proxy Statement referred to in Section 3.14. The Company hereby
consents to the inclusion in the Offer Documents of the recommendations of the
Company's Board of Directors described in this Section 1.2(a).
(b) The Company shall file with the SEC, as soon as practicable after
the commencement of the Offer, a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with all amendments and supplements thereto, the
"Schedule 14D-9"), containing the recommendations of the Company's Board of
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Directors described in Section 1.2(a)(i) and shall promptly mail the Schedule
14D-9 to the stockholders and Warrantholders of the Company. Each of the
Company, Parent and Purchaser agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 that shall have become false or
misleading in any material respect, and the Company further agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and disseminated to holders of Shares and
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Warrants, in each case as and to the extent required by applicable federal
securities laws.
(c) In connection with the Offer, if requested by Purchaser, the
Company shall promptly furnish Purchaser with mailing labels, security position
listings, any non-objecting beneficial owner lists and any available listings or
computer files containing the names and addresses of the record holders of
Shares and Warrants, each as of a recent date, and shall promptly furnish
Purchaser with such additional information (including but not limited to updated
lists of stockholders, mailing labels, security position listings and non-
objecting beneficial owner lists) and such other assistance as Parent, Purchaser
or their agents may reasonably require in communicating the Offer to the record
and beneficial holders of Shares and Warrants.
ARTICLE II
THE MERGER
SECTION 2.1 The Merger. Upon the terms and subject to the conditions
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of this Agreement, and in accordance with Delaware Law, at the Effective Time
(as defined in Section 2.2), Purchaser shall be merged with and into the
Company. As a result of the Merger, the separate corporate existence of
Purchaser shall cease and the Company shall continue as the surviving
corporation of the Merger (the "Surviving Corporation"). With the Company's
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prior written consent (which consent shall not be unreasonably withheld), Parent
may elect to structure the Merger so that (i) the Company is merged with and
into Parent, Purchaser or any other direct or indirect wholly owned subsidiary
of Parent or (ii) any direct or indirect wholly owned subsidiary of Parent other
than Purchaser is merged with and into the Company. In the event of such an
election and the Company's consent thereto, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect such election.
SECTION 2.2 Effective Time. As soon as practicable after the
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satisfaction or, if permissible, waiver of the conditions set forth in Article
VII, the parties hereto shall cause the Merger to be consummated by filing this
Agreement or a certificate of merger or a certificate of ownership and merger
(the "Certificate of Merger") with the Secretary of State of the State of
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Delaware, in such form as required by, and executed in accordance with the
relevant provisions of, Delaware Law. The date and time of the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware (or
such later time as is specified in the Certificate of Merger) will be the
"Effective Time".
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SECTION 2.3 Effects of the Merger. The Merger shall have the effects
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set forth in the applicable provisions of Delaware Law. Without limiting the
generality of the foregoing,
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and subject thereto, at the Effective Time all the property, rights, privileges,
immunities, powers and franchises of the Company and Purchaser shall vest in the
Surviving Corporation, and all debts, liabilities and duties of the Company and
Purchaser shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 2.4 Certificate of Incorporation; By-Laws. (a) At the
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Effective Time and without any further action on the part of the Company and
Purchaser, the Restated Certificate of Incorporation of the Company (as amended,
the "Certificate of Incorporation") as in effect immediately prior to the
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Effective Time shall be the certificate of incorporation of the Surviving
Corporation until thereafter and further amended as provided therein and under
Delaware Law.
(b) At the Effective Time and without any further action on the part
of the Company and Purchaser, the By-Laws of Purchaser shall be the By-Laws of
the Surviving Corporation and thereafter may be amended or repealed in
accordance with their terms or the Certificate of Incorporation of the Surviving
Corporation and as provided by law.
SECTION 2.5 Directors and Officers. The directors of Purchaser
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immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws 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, in each case until their respective successors are
duly elected or appointed (as the case may be) and qualified.
SECTION 2.6 Conversion of Securities. At the Effective Time, by
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virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares to be cancelled pursuant to Section
2.6(b)) and any Dissenting Shares (as defined in Section 2.8(a))) shall be
cancelled, extinguished and converted into the right to receive an amount
equal to the Per Share Amount in cash or any higher price that may be paid
pursuant to the Offer (the "Merger Consideration") payable to the holder
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thereof, without interest, upon surrender of the certificate formerly
representing such Share in the manner provided in Section 2.9.
(b) Each share of Class A Common Stock held in the treasury of the
Company and each Share owned by Parent, Purchaser or any other direct or
indirect subsidiary of Parent or of the Company, in each case immediately
prior to
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the Effective Time, shall be cancelled and retired without any conversion
thereof and no payment or distribution shall be made with respect thereto.
(c) Each share of common, preferred or other capital stock of
Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and become one validly issued, fully paid and
nonassessable share of identical common, preferred or other capital stock
of the Surviving Corporation.
SECTION 2.7 Treatment of Employee and Director Options. Immediately
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prior to the Effective Time, each employee or director stock option and any
related stock appreciation right (together, an "Employee Option"), whether or
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not then exercisable, shall be cancelled by the Company, and each holder of a
cancelled Employee Option shall be entitled to receive at the Effective Time or
as soon as practicable thereafter (or, if later, with respect to any Employee
Option, the date six months and one day following the grant of such Employee
Option) from the Company in consideration for the cancellation of such Employee
Option an amount in cash equal to the product of (i) the number of Shares
previously subject to such Employee Option and (ii) the excess, if any, of the
Merger Consideration over the exercise price per Share previously subject to
such Employee Option.
SECTION 2.8 Dissenting Shares and Section 262 Shares. (a)
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Notwithstanding anything in this Agreement to the contrary, shares of Class A
Common Stock that are issued and outstanding immediately prior to the Effective
Time and which are held by stockholders who have not voted in favor of or
consented to the Merger and shall have delivered a written demand for appraisal
of such shares of Class A Common Stock in the time and manner provided in
Section 262 of Delaware Law and shall not have failed to perfect or shall not
have effectively withdrawn or lost their rights to appraisal and payment under
Delaware Law (the "Dissenting Shares") shall not be converted into the right to
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receive the Merger Consideration, but shall be entitled to receive the
consideration as shall be determined pursuant to Section 262 of Delaware Law;
provided, however, that if such holder shall have failed to perfect or shall
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have effectively withdrawn or lost his, her or its right to appraisal and
payment under Delaware Law, such holder's shares of Class A Common Stock shall
thereupon be deemed to have been converted, at the Effective Time, into the
right to receive the Merger Consideration set forth in Section 2.6(a) of this
Agreement, without any interest thereon.
(b) The Company shall give Parent (i) prompt notice of any demands
for appraisal pursuant to Section 262 received by the Company, withdrawals of
such demands, and any other instruments served pursuant to Delaware Law and
received by the Company and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under Delaware Law. The
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Company shall not, except with the prior written consent of Parent, make any
payment with respect to any such demands for appraisal or offer to settle or
settle any such demands.
SECTION 2.9 Surrender of Shares; Stock Transfer Books. (a) Prior to
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the Effective Time, Purchaser shall designate a bank or trust company to act as
agent for the holders of Shares in connection with the Merger (the "Paying
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Agent") to receive the Merger Consideration to which holders of Shares shall
become entitled pursuant to Section 2.6(a). When and as needed, Parent or
Purchaser will make available to the Paying Agent sufficient funds to make all
payments pursuant to Section 2.9(b). Such funds shall be invested by the Paying
Agent as directed by Purchaser or, after the Effective Time, the Surviving
Corporation, provided that such investments shall be in obligations of or
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guaranteed by the United States of America, in commercial paper obligations
rated A-1 or P-1 or better by Moody's Investors Service, Inc. or Standard &
Poor's Rating Services, respectively, or in certificates of deposit, bank
repurchase agreements or banker's acceptances of commercial banks with capital
exceeding $100 million. Any net profit resulting from, or interest or income
produced by, such investments will be payable to the Surviving Corporation or
Parent, as Parent directs.
(b) Promptly after the Effective Time, the Surviving Corporation
shall cause to be mailed to each record holder, as of the Effective Time, of an
outstanding certificate or certificates which immediately prior to the Effective
Time represented Shares (the "Certificates"), a form of letter of transmittal
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(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 instructions for use in effecting the surrender of the
Certificates for payment of the Merger Consideration therefor. Upon surrender
to the Paying Agent of a Certificate, together with such letter of transmittal,
duly completed and validly executed in accordance with the instructions thereto,
and such other documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration for each Share formerly represented by such Certificate,
and such Certificate shall then be cancelled. No interest shall be paid or
accrued for the benefit of holders of the Certificates on the Merger
Consideration payable upon the surrender of the Certificates. If payment of the
Merger Consideration is to be made to a person other than the person in whose
name the surrendered Certificate is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed or shall
be otherwise in proper form for transfer and that the person requesting such
payment shall have paid any transfer and other taxes required by reason of the
payment of the Merger Consideration to a person other than the registered holder
of the Certificate surrendered or shall have established to the
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satisfaction of the Surviving Corporation that such tax either has been paid or
is not applicable.
(c) At any time following six months after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to deliver
to it any funds (including any interest received with respect thereto) which had
been made available to the Paying Agent and which have not been disbursed to
holders of Certificates, and thereafter such holders shall be entitled to look
to the Surviving Corporation (subject to abandoned property, escheat or other
similar laws) only as general creditors thereof with respect to the Merger
Consideration payable upon due surrender of their Certificates. Notwithstanding
the foregoing, neither the Surviving Corporation nor the Paying Agent shall be
liable to any holder of a Certificate for Merger Consideration delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
(d) At the Effective Time, the stock transfer books of the Company
shall be closed and thereafter there shall be no further registration of
transfers of shares of Class A Common Stock on the records of the Company. From
and after the Effective Time, the holders of Certificates evidencing ownership
of Shares outstanding immediately prior to the Effective Time shall cease to
have any rights with respect to such Shares except as otherwise provided for
herein or by applicable law.
SECTION 2.10 Withholding Taxes. Parent and Purchaser shall be
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entitled to deduct and withhold from the consideration otherwise payable to a
holder of Shares or Warrants pursuant to the Offer or the Merger or any
provision of this Agreement, and the Company shall deduct and withhold from the
consideration otherwise payable to a holder of a cancelled Employee Option
pursuant to Section 2.7 hereof, (i) such amounts as are required under any
applicable provision of the Internal Revenue Code of 1986, as amended (the
"Code") (including, without limitation, Code Sections 1441 through 1446, 3401
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through 3406, and 6041 through 6049), and (ii) such amounts as are required
under any applicable provision of foreign, state or local tax law. To the
extent that amounts are so withheld by the Parent, Purchaser or the Company,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the Shares, Warrants or Employee Options, as
applicable, in respect of which such deduction and withholding was made by
Parent, Purchaser or the Company.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Purchaser
that:
SECTION 3.1 Organization and Qualification; Subsidiaries. Each of
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the Company and each of its subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority and any
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be so organized, existing and in good standing or to have such power, authority
and governmental approvals would not, individually or in the aggregate, have a
Material Adverse Effect (as defined below). Each of the Company and each of its
subsidiaries is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned, leased or operated by it or the nature of its activities
makes such qualification or licensing necessary, except for such failures to be
so duly qualified or licensed and in good standing which would not, individually
or in the aggregate, either have a Material Adverse Effect or prevent the
consummation of the transactions contemplated hereby. When used in connection
with the Company or any of its subsidiaries, the term "Material Adverse Effect"
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means any change or effect that is or is reasonably likely to be materially
adverse to the business, assets, financial condition or results of operations of
the Company and its subsidiaries taken as a whole.
SECTION 3.2 Certificate of Incorporation and By-Laws. The Company
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has heretofore furnished to Parent a complete and correct copy of the
Certificate of Incorporation and the By-Laws of the Company as currently in
effect. Such Certificate of Incorporation and By-Laws are in full force and
effect and no other organizational documents are applicable to or binding upon
the Company. The Company is not in violation of any of the provisions of its
Certificate of Incorporation or By-Laws.
SECTION 3.3 Capitalization. The authorized capital stock of the
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Company consists of 15,000,000 shares of Class A Common Stock. As of August 23,
1996, (i) 6,090,941 shares of Class A Common Stock (plus any shares of Class A
Common Stock issued upon the exercise of Employee Options since August 21, 1996)
were issued and outstanding, all of which were validly issued, fully paid and
nonassessable and were issued free of preemptive (or similar) rights, (ii) no
shares of Class A Common Stock were held in the treasury of the Company, (iii)
an aggregate of 604,894 shares of Class A Common Stock (less any shares of Class
A Common Stock issued upon the exercise of Employee Options since August 21,
1996) were reserved for
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issuance and issuable upon or otherwise deliverable in connection with the
exercise of outstanding Employee Options issued pursuant to the Plans (as
defined in Section 3.10) and (iv) an aggregate of 900,000 shares, 600,000
shares, 1,050,000 shares and 300,000 shares of Class A Common Stock,
respectively, were reserved for issuance in connection with exercise of the
$9.17 Warrants, the $11.67 Warrants, the $15.00 Warrants and the $1.00 Warrants,
respectively. Since August 1, 1996, no options to purchase shares of Class A
Common Stock have been granted and no shares of Class A Common Stock have been
issued except for shares issued pursuant to the exercise of Employee Options
outstanding as of July 31, 1996. As of the date hereof, no shares of Class B
Common Stock are issued and outstanding and no shares of Class A Common Stock
are reserved for issuance upon exercise of the rights (the "Rights") issued
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pursuant to the Rights Agreement, dated as of November 11, 1995, as amended (the
"Rights Agreement"), between the Company and ChaseMellon Shareholder Services
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L.L.C. (the "Rights Agent"). Except as set forth above, except for the Rights,
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and except as a result of the exercise of Employee Options outstanding as of
July 31, 1996 or the exercise of the Warrants, there are outstanding (i) no
shares of capital stock or other voting securities of the Company, (ii) no
securities of the Company convertible into or exchangeable for shares of capital
stock or voting securities of the Company, (iii) no options or other rights to
acquire from the Company, and no obligation of the Company to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of the Company and (iv) no equity
equivalents, interests in the ownership or earnings of the Company or other
similar rights (collectively, "Company Securities"). There are no outstanding
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obligations of the Company or any of its subsidiaries to repurchase, redeem or
otherwise acquire any Company Securities. There are no other options, calls,
warrants or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of the Company or any
of its subsidiaries to which the Company or any of its subsidiaries is a party.
All shares of Class A Common Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, shall be duly authorized, validly issued, fully paid
and nonassessable and free of preemptive (or similar) rights. Except as set
forth in Section 3.3 of the Disclosure Schedule (as defined below), each of the
outstanding shares of capital stock of each of the Company's subsidiaries is
duly authorized, validly issued, fully paid and nonassessable and is owned free
and clear of all security interests, liens, claims, pledges, agreements,
limitations in voting rights, charges or other encumbrances of any nature
whatsoever. Section 3.3 of the Disclosure Schedule delivered by the Company to
Parent on or prior to the date hereof (the "Disclosure Schedule") sets forth a
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list of the subsidiaries of the Company which evidences, among other things, the
amount of capital stock or other equity interests owned by the Company, directly
or indirectly, in such subsidiaries.
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SECTION 3.4 Authority Relative to This Agreement. The Company has
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all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions so contemplated (other than, with respect to the Merger, the
approval of this Agreement by the holders of a majority of the outstanding
shares of Class A Common Stock if and to the extent required by applicable law,
and the filing of appropriate merger documents as required by Delaware Law).
This Agreement has been duly and validly executed and delivered by the Company
and, assuming the due authorization, execution and delivery hereof by Parent and
Purchaser, constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms. The only vote
required to authorize the Merger is the affirmative vote of a majority of the
outstanding Shares.
SECTION 3.5 No Conflict; Required Filings and Consents. (a) The
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execution, delivery and performance of this Agreement by the Company do not and
will not: (i) conflict with or violate the Certificate of Incorporation or By-
Laws of the Company or the equivalent organizational documents of any of its
subsidiaries; (ii) assuming that all consents, approvals and authorizations
contemplated by clauses (i), (ii) and (iii) of subsection (b) below have been
obtained and all filings described in such clauses have been made, violate any
law, rule, regulation, order, judgment or decree applicable to the Company or
any of its subsidiaries or by which its or any of their respective properties
are bound or affected; or (iii) except as set forth in Section 3.5 of the
Disclosure Schedule result in any breach or violation of or constitute a default
(or an event which with notice or lapse of time or both could become a default)
or result in the loss of a material benefit under, or give rise to any right 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 the
Company or any of its subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or its or any of their
respective properties are bound or affected, except, in the case of clauses (ii)
and (iii), for any such conflicts, violations, breaches, defaults or other
occurrences which would not except as set forth in Section 3.5 of the Disclosure
Schedule, individually or in the aggregate, have a Material Adverse Effect or
prevent the consummation of the Offer or the Merger.
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(b) The execution, delivery and performance of this Agreement by the
Company and the consummation of the Merger by the Company do not and will not
require any consent, approval, authorization or permit of, action by, filing
with or notification to, any governmental or regulatory authority, domestic or
foreign, except for (i) applicable requirements, if any, of the Exchange Act,
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
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Act"), and state securities, takeover and Blue Sky laws, (ii) the filing and
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recordation of appropriate merger or other documents as required by Delaware Law
and (iii) such consents, approvals, authorizations, permits, actions, filings or
notifications the failure of which to make or obtain would not (x) prevent
consummation of the Offer or the Merger or materially delay the Merger, (y)
otherwise prevent or delay the Company from performing its obligations under
this Agreement or (z) individually or in the aggregate, have a Material Adverse
Effect.
SECTION 3.6 Material Contracts. The Company has filed with the SEC,
------------------
or disclosed in Section 3.6 of the Disclosure Schedule, a list of all written
contracts, agreements, commitments, arrangements, leases (including with respect
to personal property, employment, indemnification or a change of control) and
other instruments to which it or any of its subsidiaries is a party or by which
it or any such subsidiary is bound, the loss, default, breach or violation of
which would have a Material Adverse Effect ("Material Contracts"). Except as
------------------
set forth in Section 3.6 of the Disclosure Schedule or in the SEC Reports (as
defined below), neither the Company nor any of its subsidiaries is, or has
received any notice or has any knowledge that any other party is, in default in
any respect under any such Material Contract, except for those defaults which
would not in the aggregate have a Material Adverse Effect; and to the Company's
knowledge there has not occurred any event that with the lapse of time or the
giving of notice or both would constitute such a material default.
SECTION 3.7 Compliance. Neither the Company nor any of its
----------
subsidiaries is in conflict with, or in default or violation of, (i) any law,
rule, regulation, order, judgment or decree applicable to the Company or any of
its subsidiaries or by which its or any of their respective properties are bound
or affected, or (ii) any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries or its or any of their respective properties are bound or
affected, except for any such conflicts, defaults or violations which would not,
individually or in the aggregate, either have a Material Adverse Effect or
prevent the consummation of the Offer or the Merger.
SECTION 3.8 SEC Filings; Financial Statements. (a) The Company has
---------------------------------
filed all forms, reports, statements and
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<PAGE>
documents required to be filed with the SEC since September 2, 1993
(collectively, the "SEC Reports"), each of which has complied in all material
-----------
respects with the applicable requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, each as in effect on the
--------------
date so filed. The Company has heretofore delivered or promptly will deliver to
Parent, in the form filed with the SEC (including any amendments thereto), (i)
its Annual Reports on Form 10-K for each of the fiscal years ended June 30, 1994
and 1995 and its Quarterly Reports on Form 10-Q for each of the quarterly
periods ended September 30, 1995, December 31, 1995 and March 31, 1996, (ii) all
definitive proxy statements relating to the Company's meetings of stockholders
(whether annual or special) held since September 2, 1993 and (iii) all other
reports or registration statements filed by the Company with the SEC since
September 2, 1993. None of such forms, reports or documents filed by the
Company contained, when filed, any untrue statement of a material fact or
omitted to state a material fact required to be stated or incorporated by
reference therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(b) Each of the audited and unaudited consolidated interim financial
statements of the Company (including, in each case, any related notes thereto)
included in its Annual Reports on Form 10-K for each of the two fiscal years
ended June 30, 1994 and 1995 and in its Quarterly Reports on Form 10-Q for its
fiscal quarters ended September 30, 1995, December 31, 1995 and March 31, 1996,
which have previously been furnished to Parent, has been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes
thereto) and each fairly presents the consolidated financial position of the
Company and its subsidiaries at the respective dates thereof and the
consolidated results of its operations and changes in cash flows for the periods
indicated, except that the unaudited interim financial statements are subject to
normal and recurring year-end adjustments.
(c) Except as and to the extent set forth on the consolidated balance
sheet of the Company and its subsidiaries at June 30, 1995, as otherwise
disclosed in the SEC Reports or as set forth in Section 3.8(c) of the Disclosure
Schedule, including the notes thereto, neither the Company nor any of its
subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) which would be required to be reflected on a
balance sheet or in the notes thereto prepared in accordance with generally
accepted accounting principles, except for liabilities or obligations incurred
in the ordinary course of business since June 30, 1995.
(d) The reserves in connection with product liability claims
reflected on the unaudited June 30, 1996 balance sheet heretofore presented to
Parent are adequate.
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<PAGE>
(e) The Company has heretofore furnished to Parent a complete and
correct copy of any amendments or modifications, which have not yet been filed
with the SEC, to agreements (including the Rights Agreement), documents or other
instruments which previously had been filed by the Company with the SEC pursuant
to the Securities Act or the Exchange Act. The Company has heretofore furnished
to Parent a preliminary copy of its consolidated financial statements for the
fiscal year ended June 30, 1996.
SECTION 3.9 Absence of Certain Changes or Events. Except as
------------------------------------
contemplated by this Agreement, disclosed in the SEC Reports filed since June
30, 1995 or disclosed in Section 3.9 of the Disclosure Schedule, since June 30,
1995, the Company and its subsidiaries have conducted their businesses only in
the ordinary course and there has not been a Material Adverse Effect (without
regard, however, to changes in conditions generally applicable to the industries
in which the Company and its subsidiaries are involved or general economic
conditions).
SECTION 3.10 No Undisclosed Liabilities. Except (a) for liabilities
--------------------------
incurred in the ordinary course of business consistent with past practice, (b)
transaction expenses incurred in connection with this Agreement, (c) liabilities
which singly or in the aggregate would not reasonably be expected to have a
Material Adverse Effect, and (d) as set forth in Section 3.10 of the Disclosure
Schedule, from June 30, 1995 until the date hereof, neither the Company nor any
of its subsidiaries has incurred any liabilities that would be required to be
reflected or reserved against in a consolidated balance sheet of the Company and
its subsidiaries prepared in accordance with generally accepted accounting
principles as applied in preparing the consolidated balance sheet of the Company
and its subsidiaries as of June 30, 1995 contained in the Company's Annual
Report on Form 10-K for the fiscal year ended June 30, 1995.
SECTION 3.11 Absence of Litigation. Except as disclosed in the SEC
---------------------
Reports filed prior to the date of this Agreement or in Section 3.11 of the
Disclosure Schedule, there are no suits, claims, actions, proceedings or
investigations pending or, to the knowledge of the Company, threatened against
the Company or any of its subsidiaries, or any properties or rights of the
Company or any of its subsidiaries, before any court, arbitrator or
administrative, governmental or regulatory authority or body, domestic or
foreign, that (i) individually or in the aggregate, would have a Material
Adverse Effect or (ii) seek to materially delay or prevent the consummation of
the transactions contemplated hereby. As of the date hereof, neither the
Company nor any of its subsidiaries nor any of their respective properties is or
are subject to any order, writ, judgment, injunction, decree, determination or
award having, or which would have, a Material Adverse Effect or which would
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<PAGE>
prevent or delay the consummation of the transactions contemplated hereby.
SECTION 3.12 Employee Benefits; Labor Matters. (a) (i) A copy (or,
--------------------------------
if unwritten, a summary thereof) of each bonus, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership, stock
bonus, stock purchase, restricted stock, stock option, employment, termination,
severance, compensation, medical, health or other plan, agreement, policy or
arrangement that covers employees, directors, former employees or former
directors of the Company and its subsidiaries ("Company Personnel") and which
-----------------
are sponsored, maintained or contributed to by the Company or its subsidiaries
(the "Benefit Plans") and any trust agreements or insurance contracts forming a
-------------
part of such Benefit Plans has been made available to Purchaser prior to the
date hereof, together with (x) copies of any annual, financial or actuarial
reports and Internal Revenue Service determination letters relating to the
Benefit Plans and (y) copies of all summary plan descriptions (whether or not
required to be furnished under the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and employee communications relating to the Benefit
-----
Plans and distributed to Company Personnel within the past five years. The
Benefit Plans are listed in Section 3.12(a)(i) of the Disclosure Schedule and
each Benefit Plan which is an "employee pension benefit plan" ("Pension Plan")
------------
as that term is defined in Section 3(2) of ERISA has been identified as such on
such Disclosure Schedule.
(ii) With respect to all the Benefit Plans, except as set forth in
the SEC Reports and except as would not individually or in the aggregate, have a
Material Adverse Effect: (1) all Benefit Plans are in substantial compliance
with all applicable law, including the Code and ERISA, including in compliance
with all filing and reporting requirements; (2) the aggregate accumulated
benefit obligations of each Pension Plan that is subject to Title IV of ERISA
(as of the date of the most recent actuarial valuation prepared for such Plan)
do not exceed the fair market value of the assets of such Pension Plan (as of
the date of such valuation), and no material adverse change has occurred with
respect to the financial condition of such Plan since such last valuation; (3)
each Pension Plan that is intended to be qualified under Section 401(a) of the
Code has received a favorable determination letter from the Internal Revenue
Service, and the Company is not aware of any circumstances likely to result in
revocation of any such favorable determination letter; (4) there is no pending
or, to the knowledge of the officers of the Company, threatened litigation or
administrative agency proceeding relating to any Benefit Plan (other than
benefit claims in the ordinary course); and (5) neither the Company, its
subsidiaries nor any entity that is treated as a single employer with the
Company or its subsidiaries under Section 414(b), (c), (m) or (o) of the Code
(an "ERISA Affiliate") has incurred or reasonably expects to incur any lien or
---------------
liability to the Pension
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<PAGE>
Benefit Guaranty Corporation, any Pension Plan or otherwise under Title IV of
ERISA (other than the payment of contributions or premiums, none of which are
overdue) or under Section 412 of the Code.
(iii) Except as specifically contemplated by this Agreement or as
disclosed in Section 3.12(a)(iii) of the Disclosure Schedule, the consummation
of the Merger and the other transactions contemplated by this Agreement will not
(x) entitle any Company Personnel to severance pay, or (y) accelerate the time
of payment or vesting or trigger any payment of compensation or benefits under,
increase the amount payable or trigger any other material obligation pursuant
to, any of the Benefit Plans.
(b) (i) Except as disclosed in the SEC Reports and except as would
not, individually or in the aggregate, have a Material Adverse Effect: (1) there
is no labor strike, labor dispute, work slowdown, stoppage or lockout actually
pending, or to the knowledge of the executive officers of the Company,
threatened against or affecting the Company or any of its subsidiaries; (2)
there is no unfair labor practice or labor arbitration proceeding pending or, to
the knowledge of the executive officers of the Company, threatened against the
Company or any of its subsidiaries relating to their business; and (3) the
Company and its subsidiaries are in compliance in all respects with all
applicable laws and regulations of the United States and of the various states
thereof and of such foreign jurisdictions in which they operate with respect to
employment, employment practices, labor relations, safety and health, wages,
hours and terms and conditions of employment.
(ii) The Company has made available to Purchaser true and complete
copies of (x) all agreements with employees or directors of the Company or its
subsidiaries relating to employment, termination of employment, severance pay or
other compensation rights and (y) all collective bargaining agreements with
union representatives of employees of the Company or its subsidiaries.
SECTION 3.13 Tax Matters. (a) The Company and each of its
-----------
subsidiaries, and any consolidated, combined, unitary or aggregate group for Tax
(as defined below) purposes of which the Company or any of its subsidiaries is
or has been a member (i) has timely filed all Tax Returns (as defined below)
required to be filed by it and all information contained in such Tax Returns is
true, correct and complete in all material respects and (ii) has timely paid in
full all Taxes shown to be due on such Tax Returns and has provided adequate
reserves in its financial statements in accordance with generally accepted
accounting principles for any Taxes that have not been paid, except where the
failure to make such filings, pay such taxes or provide for such reserves has
not had, and would not have, individually or in the aggregate, a Material
Adverse Effect.
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<PAGE>
(b) Except as disclosed in Section 3.13 of the Disclosure Schedule,
neither the Company nor any of its subsidiaries has received written notice of
any claim or assessment against, or any audit or investigation of, the Company
or any of its subsidiaries with respect to any liability of the Company or any
of its subsidiaries for Taxes.
(c) Except as disclosed in Section 3.13 of the Disclosure Schedule,
there is no contract or agreement in existence under which the Company or any of
its subsidiaries has, or may at any time in the future have, an obligation to
contribute to the payment of any portion of a Tax (or pay any amount calculated
with reference to any portion of a Tax) of any group of corporations of which
the Company or its subsidiaries is or was a part other than the group of which
the Company is currently the common parent.
(d) Except as disclosed in Section 3.13 of the Disclosure Schedule,
neither the Company nor any of its subsidiaries is a party to any contracts,
agreements or arrangements that, individually or in the aggregate, could give
rise to the payment of any "excess parachute payment" within the meaning of
Section 280G of the Code, nor, except as disclosed in Section 3.13 of the
Disclosure Schedule, will any of the transactions contemplated by this Agreement
give rise to any such payment.
(e) As used herein, "Taxes" shall mean any taxes of any kind,
-----
including but not limited to those on or measured by or referred to as income,
gross receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
value added, property or windfall profits taxes, customs, duties or similar
fees, assessments or charges of any kind whatsoever, together with any interest
and any penalties, additions to tax or additional amounts imposed by any
governmental authority, domestic or foreign. As used herein, "Tax Return" shall
----------
mean any return, report or statement required to be filed with any governmental
authority with respect to Taxes.
SECTION 3.14 Environmental Liability. Except as disclosed in the SEC
-----------------------
Reports prior to the date hereof, except as disclosed in Section 3.14 of the
Disclosure Schedule and except for such matters that, alone or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect, (i) the
Company and its subsidiaries are in compliance with all applicable Environmental
Laws (as defined below); (ii) the properties presently or formerly owned or
operated by the Company or its subsidiaries (including soil, groundwater or
surface features and buildings or structures thereon) (the "Properties") do not
----------
contain any Hazardous Substances (as defined below) other than as permitted
under applicable Environmental Law and do not contain, and have not contained,
any underground storage tanks; (iii) neither the Company nor any of its
subsidiaries has
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<PAGE>
received any claims, notices, demand letters or requests for information
alleging that the Company may be in violation of, or liable under, any
Environmental Law and none of the Company, its subsidiaries or the Properties
are subject to any agreement, order or decree involving liability under any
Environmental Law; (iv) no Hazardous Substance has been disposed of or released
on any of the Properties; (v) the Company and its subsidiaries are not subject
to liability for any off-site disposal or contamination; and (vi) there are no
other circumstances involving the Company or its subsidiaries that could be
expected to result in any claims, liability, costs or losses or any restrictions
on the ownership, use, or transfer of any Property pursuant to any Environmental
Law.
"Environmental Law" means any law, regulation, order, decree, opinion
-----------------
or agency requirement relating to pollution, contamination, wastes, Hazardous
Substances, human health or safety, or the environment and "Hazardous Substance"
-------------------
means any waste, mixture or matter containing any substance that is listed,
classified under or regulated by any government authority pursuant to any
Environmental Law including petroleum compounds, asbestos, lead and
polychlorinated biphenyls.
SECTION 3.15 Licenses and Permits. Except as disclosed in Section
--------------------
3.15 of the Disclosure Schedule, each of the Company and its subsidiaries holds
all licenses, permits, certificates of authority or franchises (collectively,
"Permits") that are required by any governmental entity to permit each of them
- --------
to conduct their respective businesses as now conducted, and all such permits
are valid and in full force and effect and will remain so upon consummation of
the transactions contemplated by this Agreement, except where the failure to
hold any such Permits or the failure to keep such Permits in effect would not,
individually or in the aggregate, have a Material Adverse Effect. To the
knowledge of the executive officers of the Company, no suspension, cancellation
or termination of any such Permits is threatened or imminent that would have a
Material Adverse Effect.
SECTION 3.16 Offer Documents; Proxy Statement. Neither the Schedule
--------------------------------
14D-9, nor any of the information supplied by the Company for inclusion in the
Offer Documents, shall, at the respective times such Schedule 14D-9, the Offer
Documents or any amendments or supplements thereto are filed with the SEC or are
first published, sent or given to stockholders, as the case may be, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Neither the proxy statement to be sent to the stockholders of the Company in
connection with the Stockholders Meeting (as defined in Section 6.1) or the
information statement to be sent to such stockholders, as appropriate (such
proxy statement or information statement, as amended or supplemented, is herein
referred to as the "Proxy Statement"), shall, at the date the Proxy Statement
---------------
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<PAGE>
(or any amendment thereof or supplement thereto) is first mailed to stockholders
and at the time of the Stockholders Meeting and at the Effective Time, be false
or misleading with respect to any material fact, or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they are made, not
misleading or necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Stockholders Meeting which
has become false or misleading. Notwithstanding the foregoing, the Company
makes no representation or warranty with respect to any information supplied by
Parent or Purchaser or any of their respective representatives which is
contained in the Schedule 14D-9 or the Proxy Statement. The Schedule 14D-9 and
the Proxy Statement will comply in all material respects as to form with the
requirements of the Exchange Act and the rules and regulations thereunder.
SECTION 3.17 Rights Agreement. The Company has heretofore provided
----------------
Parent with a complete and correct copy of the Rights Agreement, including all
amendments and exhibits thereto. The Company has taken all necessary action so
that none of the execution of this Agreement, the making of the Offer, the
acquisition of Shares pursuant to the Offer or the consummation of the Merger
will (a) cause the Rights issued pursuant to the Rights Agreement to become
exercisable, (b) cause any person to become an Acquiring Person (as such term is
defined in the Rights Agreement) or (c) give rise to a Distribution Date (as
such term is defined in the Rights Agreement).
SECTION 3.18 Brokers. No broker, finder or investment banker (other
-------
than the Financial Advisor) is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by and on behalf of the Company. The Company has
heretofore furnished to Parent a complete and correct copy of all agreements
between the Company and the Financial Advisor pursuant to which such firm would
be entitled to any payment relating to the transactions contemplated hereby.
SECTION 3.19 State Takeover Laws. Pursuant to the Certificate of
-------------------
Incorporation of the Company, Section 203 of Delaware Law will not be applicable
to this Agreement or the transactions contemplated hereby. The Board of
Directors of Company has taken all such action required to be taken by it to
provide that this Agreement and the transactions contemplated hereby shall be
exempt from the requirements of any "moratorium," "control share," "fair price"
or other anti-takeover laws or regulations of any state of the United States.
SECTION 3.20 Exercise of Warrants. Assuming Parent and the Surviving
--------------------
Corporation fulfill their obligations pursuant to Section 6.11 hereof, the
Warrantholders shall be entitled to receive upon exercise of the Warrants
(including payment of the Exercise Price), only the Per Share Amount in cash.
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<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER
Parent and Purchaser hereby, jointly and severally, represent and
warrant to the Company that:
SECTION 4.1 Corporate Organization. Each of Parent and Purchaser is
----------------------
a corporation duly organized, validly existing and in good standing under the
laws of the States of New York and Delaware, respectively, and has the requisite
corporate power and authority and any necessary governmental authority to own,
operate or lease its properties and to carry on its business as it is now being
conducted, except where the failure to be so organized, existing and in good
standing or to have such power, authority and governmental approvals would not,
individually or in the aggregate, prevent the consummation of the Offer or the
Merger.
SECTION 4.2 Authority Relative to This Agreement. Each of Parent and
------------------------------------
Purchaser has all necessary corporate power and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by each of Parent and Purchaser and the consummation by each of
Parent and Purchaser of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Parent and Purchaser
other than filing and recordation of appropriate merger documents as required by
Delaware Law. This Agreement has been duly executed and delivered by Parent and
Purchaser and, assuming due authorization, execution and delivery by the
Company, constitutes a legal, valid and binding obligation of each of Parent and
Purchaser enforceable against it in accordance with its terms.
SECTION 4.3 No Conflict; Required Filings and Consents. (a) The
------------------------------------------
execution, delivery and performance of this Agreement by Parent and Purchaser do
not and will not: (i) conflict with or violate the respective certificates of
incorporation or by-laws of Parent or Purchaser; (ii) assuming that all
consents, approvals and authorizations contemplated by clauses (i), (ii) and
(iii) of subsection (b) below have been obtained and all filings described in
such clauses have been made, violate any law, rule, regulation, order, judgment
or decree applicable to Parent or Purchaser or by which either of them or their
respective properties are bound or affected; or (iii) result in any breach or
violation of or constitute a default (or an event which with notice or lapse of
time or both could become a default) or result in the loss of a material benefit
under, or give rise to any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the property or
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<PAGE>
assets of Parent or Purchaser pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent or Purchaser is a party or by which Parent or
Purchaser or any of their respective properties are bound or affected, except,
in the case of clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults or other occurrences which would not, individually or in the
aggregate, prevent the consummation of the Offer or the Merger.
(b) The execution, delivery and performance of this Agreement by
Parent and Purchaser do not and will not require any consent, approval,
authorization or permit of, action by, filing with or notification to, any
governmental or regulatory authority, domestic or foreign, except for (i)
applicable requirements, if any, of the laws referred to in clause (i) of the
exception to Section 3.5(b), (ii) the filing and recordation of appropriate
merger or other documents as required by Delaware Law and (iii) such consents,
approvals, authorizations, permits, actions, filings or notifications the
failure of which to make or obtain would not, individually or in the aggregate,
prevent the consummation of the Offer or the Merger.
SECTION 4.4 Offer Documents; Proxy Statement. The Offer Documents
--------------------------------
will not, at the time such Offer Documents are filed with the SEC or are first
published, sent or given to stockholders, as the case may be, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated or incorporated by reference therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The information supplied by Parent for inclusion in the Proxy
Statement shall not, on the date the Proxy Statement is first mailed to
stockholders, at the time of the Stockholders Meeting (as defined in Section
6.1) or at the Effective Time, contain any statement which, at such time and in
light of the circumstances under which it shall be made, is false or misleading
with respect to any material fact, or shall omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not false or misleading or necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for the
Stockholders Meeting which has become false or misleading. Notwithstanding the
foregoing, Parent and Purchaser make no representation or warranty with respect
to any information supplied by the Company or any of its representatives which
is contained in any of the foregoing documents or the Offer Documents. The
Offer Documents will comply in all material respects as to form with the
requirements of the Exchange Act and the rules and regulations thereunder.
SECTION 4.5 Financing. Upon the terms and subject to the conditions
---------
of this Agreement and the Offer, Parent and Purchaser have, as of the date
hereof, received a commitment from Fleet Bank of New York with respect to, and
will have available
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<PAGE>
to them, upon consummation of the Offer and at the Effective Time, all funds
necessary to satisfy the obligation to pay the Per Share Amount and the Spread
pursuant to the Offer and the Merger Consideration pursuant to the Merger.
SECTION 4.6 Brokers. No broker, finder or investment banker (other
-------
than Bear, Stearns & Co. Inc.) is entitled to any brokerage, finder's or other
fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by and on behalf of Parent or Purchaser.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1 Conduct of Business of the Company Pending the Merger.
-----------------------------------------------------
The Company covenants and agrees that, during the period from the date hereof
until such time as Parent or Purchaser shall beneficially own a majority of the
Shares, except pursuant to the terms hereof, as disclosed in the SEC Reports
filed prior to the date hereof or as disclosed in Section 5.1 of the Disclosure
Schedule, or unless Parent shall otherwise agree in writing, the businesses of
the Company and its subsidiaries shall be conducted only in, and the Company and
its subsidiaries shall not take any action except in, the ordinary course of
business and in a manner consistent with past practice and in compliance with
applicable laws; and the Company and its subsidiaries shall each use its
reasonable efforts to preserve intact the business organization of the Company
and its subsidiaries, to keep available the services of the present officers,
employees and consultants of the Company and its subsidiaries and to preserve
the present relationships of the Company and its subsidiaries with customers,
suppliers and other persons with which the Company or any of its subsidiaries
has significant business relations. By way of amplification and not limitation,
neither the Company nor any of its subsidiaries shall, between the date of this
Agreement and the Effective Time, directly or indirectly do, or propose or
commit to do, any of the following, except as contemplated by this Agreement, as
previously disclosed in the SEC Reports filed prior to the date hereof or as set
forth in Section 5.1 of the Disclosure Schedule without the prior written
consent of Parent:
(a) Amend or otherwise change its Certificate of Incorporation or By-
Laws or equivalent organizational documents;
(b) Issue, deliver, sell, pledge, dispose of or encumber, or
authorize or commit to the issuance, sale, pledge, disposition or
encumbrance of, (A) any shares of capital stock of any class, or any
options, warrants, convertible securities or other rights of any kind to
acquire any shares of capital stock, or any other ownership
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<PAGE>
interest (including but not limited to stock appreciation rights or phantom
stock), of the Company or any of its subsidiaries (except for the issuance
of up to an aggregate of 604,894 shares of Class A Common Stock (less any
shares of Class A Common Stock issued upon the exercise of Employee Options
since August 21, 1996) issuable in accordance with the terms of Employee
Options outstanding as of August 23, 1996 and the Warrants or (B) any
assets of the Company or any of its subsidiaries, except, in the case of
this clause (B), in the ordinary course of business;
(c) Declare, set aside, make or pay any dividend or other
distribution;
(d) Reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) (i) Acquire (by merger, consolidation, or acquisition of stock or
assets or otherwise) any corporation, partnership or other business
organization or division thereof (ii) incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee or endorse, or
otherwise as an accommodation become responsible for, the obligations of
any person, or make any loans, advances or capital contributions to, or
investments in, any other person, except for such of the foregoing incurred
in the ordinary course of business; or (iii) enter into or amend any
contract, agreement, commitment or arrangement with respect to any of the
matters set forth in this Section 5.1(e);
(f) (i) except with respect to collective bargaining agreements
entered into in accordance with clause (ii) below and except as may be
required by law or as contemplated by this Agreement, enter into, adopt or
amend or terminate any bonus, profit sharing, compensation, severance,
termination, stock option, stock appreciation right, restricted stock,
performance unit, stock equivalent, stock purchase agreement, pension,
retirement, deferred compensation, employment, severance or other employee
benefit agreement, trust, plan, fund or other arrangement for the benefit
or welfare of any director, officer or employee in any manner, or (except
for normal increases in the ordinary course of business consistent with
past practice that, in the aggregate, do not result in a material increase
in benefits or compensation expense to the Company, and as required under
existing agreements or in the ordinary course of business generally
consistent with past practice) increase in any manner the compensation or
fringe benefits of any director, officer or employee or pay any benefit not
required by any plan and arrangement as in effect as of the date hereof
(including, without limitation, the granting of stock appreciation rights
or performance units); or (ii)
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enter into any collective bargaining agreement with any union after the
date hereof that would have or constitute a Material Adverse Effect after
the date hereof;
(g) acquire, sell, lease or dispose of any assets outside the ordinary
course of business or any assets which in the aggregate are material to the
Company and its subsidiaries taken as a whole, or enter into any commitment
or transaction outside the ordinary course of business consistent with past
practice which would be material to the Company and its subsidiaries taken
as whole;
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(i) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory or writing-off
notes or accounts receivable other than in the ordinary course of business;
(j) authorize any new capital expenditure or expenditures which,
individually, is in excess of $1,000,000, or in the aggregate, are in
excess of $10,000,000;
(k) make any Tax election or settle or compromise any Tax liability
material to the Company and its subsidiaries taken as a whole;
(l) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of
business of liabilities reflected or reserved against in, or contemplated
by, the consolidated financial statements (or the notes thereto) of the
Company and its subsidiaries or incurred in the ordinary course of business
consistent with past practice;
(m) settle or compromise any pending or threatened suit, action or
claim relating to the transactions contemplated hereby;
(n) permit any insurance policy naming it as a beneficiary or loss-
payable payee to be cancelled or terminated except in the ordinary and
usual course of business;
(o) enter into any material joint venture agreement, acquisition
agreement or partnership agreement;
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(p) enter into any material arrangement, agreement or contract with
respect to any assets or otherwise that, individually or in the aggregate
with other material agreements and contracts entered into after the date
hereof, would have or constitute a Material Adverse Effect after the date
hereof; or
(q) Enter into any agreement to take any of the actions described in
Sections 5.1(a) through 5.1(p).
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 Stockholders Meeting. (a) The Company, acting through
--------------------
its Board of Directors, shall, if required in accordance with applicable law and
the Company's Certificate of Incorporation and By-Laws, (i) duly call, give
notice of, convene and hold a special meeting of its stockholders as soon as
practicable following consummation of the Offer for the purpose of considering
and taking action on this Agreement and the transactions contemplated hereby
(the "Stockholders Meeting") and (ii) subject to its fiduciary duties under
--------------------
applicable law, exercised after consultation with independent legal counsel, (A)
include in the Proxy Statement the recommendation of the Board of Directors that
the stockholders of the Company vote in favor of the approval of this Agreement
and the transactions contemplated hereby and the written opinion of the
Financial Advisor that the consideration to be received by the stockholders of
the Company pursuant to the Offer and the Merger is fair to such stockholders
from a financial point of view and (B) use its reasonable efforts to obtain the
necessary approval of this Agreement and the transactions contemplated hereby by
its stockholders. At the Stockholders Meeting, Parent and Purchaser shall cause
all Shares then owned by them and their subsidiaries to be voted in favor of
approval of this Agreement and the transactions contemplated hereby.
(b) Notwithstanding the provisions of Section 6.1(a), in the event
that Purchaser shall acquire at least 90% of the outstanding Shares, the Company
agrees, at the request of Purchaser, subject to Article VII, to take all
necessary and appropriate action to cause the Merger to become effective as soon
as reasonably practicable after such acquisition, without a meeting of the
Company's stockholders, in accordance with Section 253 of Delaware Law.
SECTION 6.2 Proxy Statement. If required by applicable law, as soon
---------------
as practicable following Parent's reasonable request, the Company shall file
with the SEC under the Exchange Act, and shall use its reasonable efforts to
have cleared by the SEC, the Proxy Statement with respect to the Stockholders
Meeting. Parent, Purchaser and the Company will
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cooperate with each other in the preparation of the Proxy Statement. Without
limiting the generality of the foregoing, each of Parent and Purchaser will
furnish to the Company the information relating to it required by the Exchange
Act to be set forth in the Proxy Statement. The Company agrees to use its
reasonable efforts, after consultation with the other parties hereto, to respond
promptly to any comments made by the SEC with respect to the Proxy Statement and
any preliminary version thereof filed by it and cause such Proxy Statement to be
mailed to the Company's stockholders at the earliest practicable time.
SECTION 6.3 Company Board Representation; Section 14(f). (a)
-------------------------------------------
Promptly upon the purchase by Purchaser of Shares pursuant to the Offer (but
subject to the satisfaction of the Minimum Condition), and from time to time
thereafter, Purchaser shall be entitled to designate up to such number of
directors, rounded up to the next whole number, on the Board of Directors of the
Company as shall give Purchaser representation on the Board of Directors equal
to the product of the total number of directors on such Board (giving effect to
the directors elected pursuant to this sentence) multiplied by the percentage
that the aggregate number of Shares beneficially owned by Purchaser or any
affiliate of Purchaser bears to the total number of Shares then outstanding, and
the Company shall, at such time, promptly take all action necessary to cause
Purchaser's designees to be so elected, including by increasing the size of the
Board of Directors or securing the resignations of incumbent directors or both.
At such times, the Company will use its reasonable efforts to cause persons
designated by Purchaser to constitute the same percentage as is on the Board of
(i) each committee of the Board, (ii) each board of directors of each subsidiary
of the Company and (iii) each committee of each such board, in each case only to
the extent permitted by law.
(b) The Company's obligations to appoint designees to its Board of
Directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. The Company shall promptly take all actions required
pursuant to Section 14(f) and Rule 14f-1 in order to fulfill its obligations
under this Section 6.3 and shall, if requested by Parent, include in the
Schedule 14D-9 or a separate Rule 14f-1 Statement provided to stockholders such
information with respect to the Company and its officers and directors as is
required under Section 14(f) and Rule 14f-1 to fulfill its obligations under
this Section 6.3. Parent or Purchaser will supply to the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by Section 14(f) and Rule
14f-1.
(c) Following the election or appointment of Purchaser's designees
pursuant to this Section 6.3 and prior to the Effective Time, any amendment of
this Agreement or the Certificate of Incorporation or By-Laws of the Company,
any termination of this Agreement by the Company, any extension by
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the Company of the time for the performance of any of the obligations or other
acts of Purchaser or waiver of any of the Company's rights hereunder, and any
other consent or action by the Board of Directors hereunder, will require the
concurrence of a majority (which shall be at least two) of the directors of the
Company then in office who are neither designated by Purchaser nor are employees
of the Company (the "Disinterested Directors").
-----------------------
SECTION 6.4 Access to Information; Confidentiality. (a) From the
--------------------------------------
date hereof to the Effective Time, the Company shall, and shall cause its
subsidiaries, officers, directors, employees, auditors and other agents to,
afford the officers, employees, auditors and other agents of Parent, and
financing sources who shall agree to be bound by the provisions of this Section
6.4 as though a party hereto, reasonable access at all reasonable times to its
officers, employees, agents, properties, offices, plants and other facilities
and to all books and records, and shall furnish Parent and such financing
sources with all financial, operating and other data and information as Parent,
through its officers, employees or agents, or such financing sources may from
time to time reasonably request.
(b) Each of Parent and Purchaser will hold and will cause its
officers, employees, auditors and other agents to hold in confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of law, all documents and information concerning the Company and
its subsidiaries furnished to Parent or Purchaser in connection with the
transactions contemplated in this Agreement (except to the extent that such
information can be shown to have been (i) previously known by Parent or
Purchaser from sources other than the Company, or its directors, officers,
auditors or other agents, (ii) in the public domain through no fault of Parent
or Purchaser or (iii) later lawfully acquired by Parent or Purchaser on a non-
confidential basis from other sources who are not known by Parent or Purchaser
to be bound by a confidentiality agreement (after inquiry of such sources) or
otherwise prohibited from transmitting the information to Parent or Purchaser by
a contractual, legal or fiduciary obligation) and will not release or disclose
such information to any other person, except its auditors and other advisors in
connection with this Agreement who need to know such information. If the
transactions contemplated by this Agreement are not consummated, such confidence
shall be maintained for a period of three years from the date hereof and, if
requested by or on behalf of the Company, Parent and Purchaser will, and will
use all reasonable efforts to cause their auditors and other agents to, return
to the Company or destroy all copies of written information furnished by the
Company to Parent and Purchaser or their agents, representatives or advisors.
(c) No investigation pursuant to this Section 6.4 shall affect any
representations or warranties of the parties hereto contained herein or the
conditions to the obligations of the parties hereto.
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<PAGE>
SECTION 6.5 No Solicitation of Transactions. The Company, its
-------------------------------
affiliates and their respective officers, directors, employees, representatives
and agents shall immediately cease any existing discussions or negotiations, if
any, with any parties conducted heretofore with respect to an Acquisition
Proposal. The term "Acquisition Proposal" shall mean any acquisition or
--------------------
exchange of all or any material portion of the assets of, any equity interest
in, or any merger, reorganization, consolidation, or business combination or
similar transaction involving the Company or any of its subsidiaries or any
proposal with respect thereto. Neither the Company nor any of its affiliates,
nor any of its or their respective officers, directors, employees,
representatives or agents, shall, directly or indirectly, encourage, solicit,
participate in or initiate discussions or negotiations with, or provide any
information to, any corporation, partnership, person or other entity or group
(other than Parent and Purchaser, any affiliate or associate of Parent and
Purchaser or any designees of Parent or Purchaser) concerning an Acquisition
Proposal. Notwithstanding the preceding sentence, if, upon the advice of
counsel and its financial advisor, the Company's Board of Directors determines
in good faith that failing to take any of the following actions would constitute
a breach of the Company's Board of Directors' fiduciary duty under applicable
law, the Company may, directly or indirectly, (i) furnish information and
access, in each case only in response to a request for such information or
access to any person made after the date hereof which was not encouraged,
solicited or initiated by the Company or any of its affiliates or any of its or
their respective officers, directors, employees, representatives or agents after
the date hereof, pursuant to appropriate confidentiality agreements, and (ii)
participate in discussions and negotiate with such entity or group concerning an
Acquisition Proposal if such entity or group has submitted a written proposal to
the Company's Board of Directors relating to any such Acquisition Proposal. The
Company's Board of Directors shall provide a copy and/or terms of any
Acquisition Proposal (whether oral or written) to Parent immediately after
receipt thereof, unless the Company's Board of Directors determines that
providing such a copy and/or terms would constitute a breach of the Company's
Board of Directors' fiduciary duty under applicable law. Notwithstanding the
foregoing, the Company shall notify Parent immediately if any Acquisition
Proposal (whether oral or written) is made and shall keep Parent promptly
advised of all developments which could reasonably be expected to culminate in
the Company's Board of Directors withdrawing, modifying or amending its
recommendation of the Offer, the Merger and the other transactions contemplated
by this Agreement. Nothing in this Section 6.5 shall prevent the Company's
Board of Directors from taking, and disclosing to the Company's stockholders, a
position contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange
Act with regard to any tender offer; provided, however, that the Company's Board
-------- -------
of Directors shall not recommend that the stockholders of the Company tender
their Shares in connection with any such tender offer unless the
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<PAGE>
Company's Board of Directors, upon the advice of counsel and its financial
advisor, determines in good faith that failing to take such action would
constitute a breach of the Company's Board of Directors' fiduciary duty under
applicable law. The Company agrees not to release any third party from, or
waive any provisions of, any confidentiality or standstill agreement to which
the Company is a party, unless the Board determines that failing to release such
third party or waive such provisions would constitute a breach of the Company's
Board of Directors' fiduciary duty under applicable law.
SECTION 6.6 Employee Benefits Matters. Parent shall cause Purchaser
-------------------------
to honor all employment, consulting and other arrangements of the Company with
individuals relating to employment and employee benefits which are listed on
Section 6.6 of the Disclosure Schedule.
SECTION 6.7 Directors' and Officers' Indemnification and Insurance.
------------------------------------------------------
From and after the Effective Time, Parent shall cause Purchaser to indemnify and
hold harmless all past and present officers and directors of the Company and of
its subsidiaries to the full extent such persons may be indemnified by the
Company pursuant to the Company's Certificate of Incorporation and By-laws as in
effect on the date of this Agreement for acts or omissions occurring at or prior
to the Effective Time, and shall advance reasonable litigation expenses incurred
by such officers and directors in connection with defending any action arising
out of such acts or omissions.
SECTION 6.8 No Amendment to the Rights Agreement. The Company
------------------------------------
covenants and agrees that it will not amend the Rights Agreement, except as
expressly contemplated by this Agreement.
SECTION 6.9 Further Action; Reasonable Efforts. Upon the terms and
----------------------------------
subject to the conditions hereof, each of the parties hereto shall use its
reasonable efforts to take, or cause to be taken, all appropriate action, and to
do or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including but not limited to (i)
cooperation in the preparation and filing of the Offer Documents, the Schedule
14D-9, the Proxy Statement, any required filings under the HSR Act and other
laws described in clause (i) of the exception in Section 3.5(b), and any
amendments to any thereof and (ii) using its reasonable efforts to make all
required regulatory filings and applications and to obtain all licenses,
permits, consents, approvals, authorizations, qualifications and orders of
governmental authorities and parties to contracts with the Company and its
subsidiaries as are necessary for the consummation of the transactions
contemplated by this Agreement and to fulfill the conditions to the Offer and
the Merger. The Company will cooperate with Parent and Purchaser with respect
to consummating the financing for the Offer and the Merger. In case at any time
after the Effective Time any further
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<PAGE>
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and directors of each party to this Agreement shall use
their reasonable efforts to take all such necessary action.
SECTION 6.10 Public Announcements. Parent and the Company shall
--------------------
consult with each other before issuing any press release or otherwise making any
public statements with respect to the Offer or the Merger and shall not issue
any such press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement with its
securities exchange.
SECTION 6.11 Warrants. Parent agrees to cause the Surviving
--------
Corporation to, and the Surviving Corporation shall, make appropriate lawful
provision so that, following the Effective Time, each holder of a Warrant will
be entitled to receive upon exercise of such Warrant in accordance with the
terms thereof (including payment of the Exercise Price (as defined in each
Warrant)) the Per Share Amount in cash.
SECTION 6.12 Delivery of Director Agreements. The Company shall
-------------------------------
deliver to Parent, on or prior to the initial expiration date of the Offer, a
copy of an amendment to each Company directors' Indemnity Agreement, executed by
the Company and such director, pursuant to which the provisions of Section 3(b)
of such Indemnity Agreement will cease to be effective upon consummation of a
Change in Control (as defined in each Indemnity Agreement) upon the consummation
of the transactions contemplated by this Agreement.
ARTICLE VII
CONDITIONS OF MERGER
SECTION 7.1 Conditions to Obligation of Each Party to Effect the
----------------------------------------------------
Merger. The respective obligations of each party to effect the Merger shall be
- ------
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) If required by Delaware Law, this Agreement shall have been
approved by the affirmative vote of the stockholders of the Company by the
requisite vote in accordance with the Company's Certificate of
Incorporation and Delaware Law (which the Company has represented shall be
solely the affirmative vote of a majority of the outstanding Shares).
(b) No statute, rule, regulation, executive order, decree, ruling,
injunction or other order (whether temporary, preliminary or permanent)
shall have been enacted, entered, promulgated or enforced by any United
States or state court or governmental authority which
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<PAGE>
prohibits, restrains, enjoins or restricts the consummation of the Merger.
(c) Any waiting period applicable to the Merger under the HSR Act
shall have terminated or expired.
(d) Purchaser shall have purchased Shares pursuant to the Offer in a
number sufficient to satisfy the Minimum Condition.
SECTION 7.2 Conditions to Obligations of Purchaser. The obligation
--------------------------------------
of Purchaser to effect the Merger is also subject to the satisfaction or waiver
by Purchaser at or prior to the Effective Time of the following conditions:
(a) The Company shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior
to the Effective Time, unless such non-performance occurs following the
appointment or election of Purchaser's designees to a majority of the
positions on the Company's Board of Directors. In addition, Purchaser
shall have received a certificate signed on behalf of the Company by the
Chief Executive Officer and the Chief Financial Officer of the Company to
such effect.
(b) The Rights shall not have become nonredeemable, exercisable,
distributed or triggered pursuant to the terms of the Rights Agreement.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination. This Agreement may be terminated and the
-----------
Merger contemplated hereby may be abandoned at any time prior to the Effective
Time, notwithstanding approval thereof by the stockholders of the Company:
(a) By mutual written consent of Parent, Purchaser and the Company;
(b) By Parent or the Company, if the Effective Time shall not have
occurred on or before 150 days from the date hereof (the "Outside Date");
------------
provided that the right to terminate this Agreement under this clause (b)
--------
shall not be available to any party whose misrepresentation in this
Agreement or whose failure to perform any of its covenants and agreements
or to satisfy any obligation under this Agreement has been the cause of or
resulted in the failure of the Merger to occur on or before such date;
(c) By Parent or the Company if any court of competent jurisdiction
or other governmental body located or having
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<PAGE>
jurisdiction within the United States shall have issued a final order,
decree or ruling or taken any other final action restraining, enjoining or
otherwise prohibiting the Offer or the Merger and such order, decree,
ruling or other action is or shall have become final and nonappealable;
(d) By Parent if due to an occurrence or circumstance which would
result in a failure to satisfy any of the Offer Conditions, Purchaser shall
have (i) failed to commence the Offer as provided in Section 1.1, (ii)
terminated the Offer or (iii) failed to pay for Shares pursuant to the
Offer on or prior to the Outside Date;
(e) By the Company if (i) there shall not have been a material breach
of any representation, warranty, covenant or agreement on the part of the
Company, and Purchaser shall have (A) terminated the Offer or (B) failed to
pay for Shares pursuant to the Offer on or prior to the Outside Date or
(ii) the Company receives an Acquisition Proposal on terms the Company's
Board of Directors, upon the advice of counsel and its financial advisor,
determines in good faith to be more favorable to the Company's stockholders
than the terms of the Offer and the Merger, and the Board, upon the advice
of counsel and its financial advisor, determines in good faith, that it is
legally required for the discharge of its fiduciary duties, (A) not to
continue to recommend that holders of Shares or Warrants accept the Offer
and tender their Shares or Warrants pursuant to the Offer and (B) to accept
such Acquisition Proposal; provided, however, that the Company shall not be
-------- -------
permitted to terminate this Agreement pursuant to this Section 8.1(e)(ii)
unless it has provided Parent and Purchaser with two business days prior
written notice of its intent to so terminate this Agreement together with a
detailed summary of the terms and conditions (including proposed financing,
if any) of such Acquisition Proposal; provided, further, that Parent shall
-------- -------
receive the fee set forth in Section 8.3 immediately prior to any
termination pursuant to this Section 8.1(e)(ii) by wire transfer in same
day funds; or
(f) By Parent prior to the appointment or election of Purchaser's
designees to a majority of the positions on the Company's Board of
Directors if (i) there shall have been a breach of any representation or
warranty on the part of the Company which would either have a Material
Adverse Effect on the Company or which would prevent the consummation of
the Offer, (ii) there shall have been a breach of any covenant or agreement
on the part of the Company which would either have a Material Adverse
Effect or prevent the consummation of the Offer, which shall not have been
cured prior to the earlier of (A) 10 business days following notice of such
breach and (B) two business days prior to the date on which the Offer
expires, or (iii) the Board shall have withdrawn or modified (including by
amendment of the Schedule 14D-9)
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in a manner adverse to Purchaser its approval or recommendation of the
Offer, this Agreement or the Merger or the Company's Board of Directors,
upon request by Parent, shall fail to reaffirm such approval or
recommendation within two business days of such request or shall have
recommended another offer or transaction, or shall have resolved to effect
any of the foregoing.
SECTION 8.2 Effect of Termination. In the event of the termination
---------------------
of this Agreement pursuant to Section 8.1, this Agreement, except for the
provisions of Sections 6.4(b), 8.3, 8.4 and 9.1, shall forthwith become void and
there shall be no liability on the part of any party hereto; provided, however,
-------- -------
that nothing herein shall relieve any party from liability for any breach
hereof.
SECTION 8.3 Termination Fee. If (x)(i) after the date hereof, any
---------------
corporation, partnership, person, other entity or group (as defined in Section
13(d)(3) of the Exchange Act) other than Parent or Purchaser or any of their
respective affiliates shall become the beneficial owner of 10% or more of the
outstanding Shares or to the extent there exists a holder of 10% or more of the
outstanding Shares as of the date hereof, such holder purchases any additional
shares of stock of the Company, and (ii) the Minimum Condition shall not have
been satisfied and the Offer is terminated in accordance with this Agreement
without the Purchase of any Shares thereunder, or (y) Parent shall have
terminated this Agreement pursuant to Section 8.1(f)(iii) hereof, then the
Company, if requested by Parent, shall promptly, but in no event later than two
days after the date of such request, pay Parent a fee of $10,000,000 plus
accountable expenses which amount shall be payable in same day funds, or if the
Company shall have terminated this Agreement pursuant to Section 8.1(e)(ii)
hereof, then the Company shall, in accordance with Section 8.1(e)(ii), pay
Parent prior to such termination a fee of $10,000,000 plus accountable expenses
which amount shall be payable in same day funds. The Company acknowledges that
the agreements contained in this Section 8.3 are an integral part of the
transactions contemplated in this Agreement, and that, without such agreements,
Parent and Purchaser would not enter into this Agreement; accordingly, if the
Company fails to pay promptly the amount due pursuant to this Section 8.3, and,
in order to obtain such payment, Parent or Purchaser commences a suit which
results in a judgment against the Company for the fee set forth in this Section
8.3, the Company shall pay to Parent or Purchaser its costs and expenses
(including attorneys' fees) in connection with such suit, together with interest
on the amount of the fee at the prime lending rate for money borrowed of Fleet
Bank of New York on the date such payment was required to be made.
SECTION 8.4 Fees and Expenses. Except as provided in Section 8.3,
-----------------
each party shall bear its own expenses in connection with this Agreement and the
transactions contemplated hereby.
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SECTION 8.5 Amendment. Subject to Section 6.3, this Agreement may be
---------
amended by the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective Time;
provided, however, that, after approval of the Merger by the stockholders of the
- -------- -------
Company, no amendment may be made which would reduce the amount or change the
type of consideration into which each Share shall be converted upon consummation
of the Merger. This Agreement may not be amended except by an instrument in
writing signed by the parties hereto.
SECTION 8.6 Waiver. Subject to Section 6.3, at any time prior to the
------
Effective Time, any party hereto may (a) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any such extension or waiver shall
be valid if set forth in an instrument in writing signed by the party or parties
to be bound thereby.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Non-Survival of Representations, Warranties and
-----------------------------------------------
Agreements. The representations, warranties and agreements in this Agreement
- ----------
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Sections 8.1(a), 8.1(c), 8.1(e)(ii) or 8.1(f)(iii), as the case may
be, except that the agreements set forth in Article II, Section 6.6, Section
6.7, Section 6.9 and Article IX shall survive the Effective Time indefinitely
and those set forth in Section 6.4, Section 8.3, Section 8.4 and Article IX
shall survive termination indefinitely.
SECTION 9.2 Notices. All notices, requests, claims, demands and
-------
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
if to Parent or Purchaser:
Columbus McKinnon Corporation
140 John James Audobon Pkwy.
Amherst, New York 14228
Attention: President and Chief Executive Officer
Telecopier: (716) 689-5598
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<PAGE>
with a copy to:
Phillips, Lytle, Hitchcock, Blaine & Huber
3400 Marine Midland Center
Buffalo, New York 14203
Attention: Frederick G. Attea, Esq.
Telecopier: (716) 852-6100
if to the Company:
Yale International, Inc.
One Morrocroft Centre
6805 Morrison Boulevard, Suite 450
Charlotte, North Carolina 28211
Attention: President and Chief Executive Officer
Telecopier: (704) 367-1854
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Philip T. Ruegger, Esq.
Telecopier: (212) 455-2502
SECTION 9.3 Certain Definitions. For purposes of this Agreement, the
-------------------
term:
(a) "affiliate" of a person means a person that directly or
---------
indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, the first mentioned person;
(b) "beneficial owner" with respect to any Shares means a person who
----------------
shall be deemed to be the beneficial owner of such Shares (i) which such
person or any of its affiliates or associates beneficially owns, directly
or indirectly, (ii) which such person or any of its affiliates or
associates (as such term is defined in Rule 12b-2 of the Exchange Act) has,
directly or indirectly, (A) the right to acquire (whether such right is
exercisable immediately or subject only to the passage of time), pursuant
to any agreement, arrangement or understanding or upon the exercise of
consideration rights, exchange rights, warrants or options, or otherwise,
or (B) the right to vote pursuant to any agreement, arrangement or
understanding or (iii) which are beneficially owned, directly or
indirectly, by any other persons with whom such person or any of its
affiliates or person with whom such person or any of its affiliates or
associates has any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares;
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(c) "control" (including the terms "controlled by" and "under common
------- ------------- ------------
control with") means the possession, directly or indirectly or as trustee
------------
or executor, of the power to direct or cause the direction of the
management policies of a person, whether through the ownership of stock, as
trustee or executor, by contract or credit arrangement or otherwise;
(d) "generally accepted accounting principles" means the generally
----------------------------------------
accepted accounting principles set forth in the opinions and pronouncements
of the Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity
as may be approved by a significant segment of the accounting profession in
the United States, in each case applied on a basis consistent with the
manner in which the audited financial statements for the fiscal year of the
Company ended December 31, 1993 were prepared;
(e) "knowledge" means knowledge after reasonable inquiry;
---------
(f) "person" means an individual, corporation, partnership,
------
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act); and
(g) "subsidiary" or "subsidiaries" of the Company, the Surviving
---------- ------------
Corporation, Parent or any other person means any corporation, partnership,
joint venture or other legal entity of which the Company, the Surviving
Corporation, Parent or such other person, as the case may be (either alone
or through or together with any other subsidiary), owns, directly or
indirectly, 50% or more of the stock or other equity interests the holder
of which is generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal
entity.
SECTION 9.4 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
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 the transactions contemplated hereby are fulfilled to the fullest extent
possible.
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<PAGE>
SECTION 9.5 Entire Agreement; Assignment. This Agreement constitutes
----------------------------
the entire agreement among the parties with respect to the subject matter hereof
and supersedes all prior agreements and undertakings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof.
This Agreement shall not be assigned by operation of law or otherwise, except
that Parent and Purchaser may assign all or any of their respective rights and
obligations hereunder to any direct or indirect wholly owned subsidiary or
subsidiaries of Parent, provided that no such assignment shall relieve the
--------
assigning party of its obligations hereunder if such assignee does not perform
such obligations.
SECTION 9.6 Parties in Interest. This Agreement shall be binding
-------------------
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
SECTION 9.7 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
laws thereof.
SECTION 9.8 Headings. The descriptive headings contained in this
--------
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 9.9 Counterparts. This Agreement may be executed in one or
------------
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
SECTION 9.10 Disclosure Schedule. For purposes of this Agreement,
-------------------
any information disclosed in the Disclosure Schedule shall be deemed to be a
representation and warranty of the Company that such information is accurate in
all material respects, and any information disclosed in one section of the
Disclosure Schedule shall be deemed to be disclosed in all sections of the
Disclosure Schedule.
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<PAGE>
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
COLUMBUS MCKINNON CORPORATION
By:/s/ H.P. Ladds, Jr.
---------------------------
Name: H.P. Ladds, Jr.
Title: President
L ACQUISITION CORPORATION
By:/s/ R.L. Montgomery
--------------------------
Name: R.L. Montgomery
Title: Treasurer
SPRECKELS INDUSTRIES, INC.
By:/s/ Gary L. Tessitore
----------------------------
Name: Gary L. Tessitore
Title: President and Chief
Executive Officer
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<PAGE>
ANNEX A
-------
Offer Conditions
----------------
The capitalized terms used in this Annex A have the meanings set forth
in the attached Agreement, except that the term "Merger Agreement" shall be
----------------
deemed to refer to the attached Agreement and the term "Commission" shall be
----------
deemed to refer to the SEC.
Notwithstanding any other provision of the Offer, Purchaser shall 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
promptly after termination or withdrawal of the Offer), pay for any Shares
tendered pursuant to the Offer, and may postpone the acceptance for payment or,
subject to the restriction referred to above, payment for any Shares tendered
pursuant to the Offer, and may amend or terminate the Offer (whether or not any
Shares have theretofore been purchased or paid for) if, prior to the expiration
of the Offer, (i) a number of shares of Class A Common Stock which, together
with any Shares owned by Parent or Purchaser, constitutes at least 51% of the
voting power (determined on a fully-diluted basis, including the exercise in
full of all options and warrants outstanding, other than Warrants validly
tendered and accepted for payment pursuant to the Offer), on the date of
purchase, of all the securities of the Company entitled to vote generally in the
election of directors or in a merger shall not have been validly tendered and
available for acceptance pursuant to the Offer (the "Minimum Condition"), (ii)
-----------------
Purchaser is not, in its reasonable discretion, satisfied that (x) the Rights
will not become exercisable upon consummation of the Offer, (y) upon
consummation of the Offer, the restrictions contained in Section 203 of Delaware
Law will not apply to the Merger or (z) no supermajority vote will be required
by the Company's Certificate of Incorporation to approve the Merger or, after
consummation of the Offer, Purchaser will otherwise possess sufficient voting
power to effect the Merger without the affirmative vote of any person other than
Purchaser or (iii) at any time on or after August 24, 1996 and prior to the
acceptance for payment of Shares, any of the following conditions occurs or has
occurred or Purchaser makes a good faith determination that any of the following
conditions has occurred:
(a) there shall have been any action or proceeding brought by any
governmental authority before any federal or state court, or any order or
preliminary or permanent injunction entered in any action or proceeding
before any federal or state court or governmental, administrative or
regulatory authority or agency, located or having jurisdiction within the
United States, or any other action taken, proposed or threatened, or
statute, rule, regulation, legislation, interpretation, judgment or order
proposed, sought, enacted, entered, enforced, promulgated, amended,
<PAGE>
issued or deemed applicable to Purchaser, the Company or any subsidiary or
affiliate of Purchaser or the Company or the Offer or the Merger, by any
legislative body, court, government or governmental, administrative or
regulatory authority or agency located or having jurisdiction within the
United States, which could reasonably be expected to have the effect of:
(i) making illegal, or otherwise directly or indirectly restraining or
prohibiting or making materially more costly, the making of the Offer, the
acceptance for payment of, payment for, or ownership, directly or
indirectly, of some of or all the Shares by Parent or Purchaser, the
consummation of any of the transactions contemplated by the Merger
Agreement or materially delaying the Merger; (ii) prohibiting or materially
limiting the ownership or operation by the Company or any of its
subsidiaries, or by Parent, Purchaser or any of Parent's subsidiaries of
all or any material portion of the business or assets of the Company or any
of its material subsidiaries or Parent or any of its subsidiaries, or
compelling Purchaser, Parent or any of Parent's subsidiaries to dispose of
or hold separate all or any material portion of the business or assets of
the Company or any of its material subsidiaries or Parent or any of its
subsidiaries, as a result of the transactions contemplated by the Offer or
the Merger Agreement; (iii) imposing or confirming limitations on the
ability of Purchaser, Parent or any of Parent's subsidiaries effectively to
acquire or hold or to exercise full rights of ownership of Shares,
including, without limitation, the right to vote any Shares acquired or
owned by Parent or Purchaser or any of Parent's subsidiaries on all matters
properly presented to the stockholders of the Company, including, without
limitation, the adoption and approval of the Merger Agreement and the
Merger or the right to vote any shares of capital stock of any subsidiary
(other than immaterial subsidiaries) directly or indirectly owned by the
Company; or (iv) requiring divestiture by Parent or Purchaser, directly or
indirectly, of any Shares;
(b) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on any national securities
exchange or in the over-the-counter market in the United States, (ii) any
extraordinary or material adverse change in the market price of the Shares
or in the United States securities or financial markets generally,
including, without limitation, a decline of at least 20% in either the Dow
Jones Average of Industrial Stocks or the Standard & Poor's 500 index from
the date hereof, (iii) any material adverse change or any condition, event
or development involving a prospective material adverse change in United
States or other material international currency exchange rates or a
suspension of, or limitation on, the markets therefor, (iv) a declaration
of a banking moratorium or any suspension of payments in respect
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<PAGE>
of banks in the United States, or (v) a commencement of a war or armed
hostilities or other national or international calamity directly or
indirectly involving the United States which would have a Material Adverse
Effect or materially adversely affect (or materially delay) the
consummation of the Offer;
(c) (i) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that beneficial ownership (determined for the purposes of
this Section as set forth in Rule 13d-3 promulgated under the Exchange Act)
of 15% or more of the outstanding Shares has been acquired by any
corporation (including the Company or any of its subsidiaries or
affiliates), partnership, person or other entity or group (as defined in
Section 13(d)(3) of the Exchange Act), other than Parent or any of its
affiliates and other than any Grandfathered Person (as presently defined)
so long as such person remains a Grandfathered Person (as presently
defined) or (ii) (A) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent or
Purchaser the approval or recommendation of the Offer, the Merger or the
Merger Agreement, or approved or recommended any takeover proposal or any
other acquisition of Shares other than the Offer and the Merger, (B) any
such corporation, partnership, person or other entity or group shall have
entered into a definitive agreement or an agreement in principle with the
Company with respect to a tender offer or exchange offer for any Shares or
a merger, consolidation or other business combination with or involving the
Company or any of its subsidiaries or (C) the Board of Directors of the
Company or any committee thereof shall have resolved to do any of the
foregoing;
(d) 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 as if such representations and warranties were made at the time
of such determination;
(e) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement;
(f) the Merger Agreement shall have been terminated in accordance
with its terms or the Offer shall have been amended or terminated with the
consent of the Company;
(g) any waiting periods under the HSR Act applicable to the purchase
of Shares pursuant to the Offer shall not have expired or been terminated,
or any material approval,
A-3
<PAGE>
permit, authorization, consent or waiting period of any domestic, foreign
or supranational governmental, administrative or regulatory agency
(federal, state, local, provincial or otherwise) located or having
jurisdiction within the United States or any country or economic region in
which either the Company or Parent, directly or indirectly, has material
assets or operations, shall not have been obtained or satisfied; or
(h) the Company and Purchaser (or any affiliate of Purchaser) shall
have entered into an agreement (which by its terms supersedes the
Agreement) providing for the acquisition of the Company by Purchaser or any
affiliate of Purchaser by merger or other similar business combination, or
by purchase of shares of capital stock or assets of the Company, or the
Company and Purchaser shall have entered into any other agreement pursuant
to which it is agreed that the Offer will be terminated;
which, in the reasonable judgment of Purchaser with respect to each and every
matter referred to above, makes it inadvisable to proceed with the Offer or with
such acceptance for payment of or payment for Shares or to proceed with the
Merger.
The foregoing conditions are for the sole benefit of Purchaser and may
be asserted by Purchaser regardless of the circumstances giving rise to any such
condition or may be waived by Purchaser in whole or in part at any time and from
time to time in its sole discretion (subject to the terms of the Merger
Agreement). The failure by Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, the waiver of
any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances, and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
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