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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
PURSUANT TO RULE 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
----------------
AVONDALE INDUSTRIES, INC.
(NAME OF ISSUER)
AVONDALE INDUSTRIES, INC.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(TITLE OF CLASS OF SECURITIES)
054350103
(CUSIP NUMBER OF CLASS OF SECURITIES)
ALBERT L. BOSSIER, JR.
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
AVONDALE INDUSTRIES, INC.
5100 RIVER ROAD
AVONDALE, LOUISIANA 70094
TELEPHONE: (504) 436-2121
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICES AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
COPIES TO:
CURTIS R. HEARN
JONES, WALKER, WAECHTER, POITEVENT,
CARRERE & DENEGRE L.L.P.
201 ST. CHARLES AVENUE, SUITE 5100
NEW ORLEANS, LA 70170
TELEPHONE: (504) 582-8000
MAY 6, 1998
(DATE TENDER OFFER FIRST PUBLISHED, SENT OR GIVEN TO SECURITY HOLDERS)
CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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$36,250,000 $7,250
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* Calculated solely for purposes of determining the filing fee, based upon
the purchase of 1,250,000 shares at the maximum tender offer price per
share of $29.00.
** 1/50th of 1% of Transaction Value.
[_CHECK]BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY RULE 0-11(A)(2)
AND IDENTIFY THE FILING WITH WHICH THE OFFSETTING FEE WAS PREVIOUSLY PAID.
IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT NUMBER, OR THE FORM
OR SCHEDULE AND THE DATE OF ITS FILING.
Amount Previously Paid: N/A
Form or Registration No.: N/A
Filing Party: N/A
Date Filed: N/A
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<PAGE>
This Issuer Tender Offer Statement on Schedule 13E-4 (this "Statement")
relates to the tender offer by Avondale Industries, Inc., a Louisiana
corporation (the "Company"), to purchase up to 1,250,000 shares of its common
stock, par value $1.00 per share (the "Shares"), at prices, net to the seller
in cash, not greater than $29.00 nor less than $26.50 per Share, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
May 6, 1998 (the "Offer to Purchase") and the related Letter of Transmittal
(which, as they may be amended from time to time, are herein collectively
referred to as the "Offer"). Copies of the forms of the Offer to Purchase and
Letter of Transmittal are filed as Exhibits (a)(1) and (a)(2), respectively,
to this Statement.
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is Avondale Industries, Inc., a Louisiana
corporation. The address of its principal executive offices is 5100 River
Road, Avondale, Louisiana 70094.
(b) The information set forth in the "Introduction" to the Offer to
Purchase, "Number of Shares; Proration" in Section 1 of the Offer to Purchase
and "Interests of Directors and Executive Officers; Transactions and
Arrangements Concerning the Shares" in Section 9 of the Offer to Purchase is
incorporated herein by reference. The Offer is being made to all holders of
Shares, including officers, directors and affiliates of the Company. The
Company does not know at the date of the Offer whether any directors,
executive officers or affiliates of the Company will tender any Shares
pursuant to the Offer.
(c) The information set forth in the "Introduction" to the Offer to Purchase
and "Price Range of Shares; Dividends" in Section 7 of the Offer to Purchase
is incorporated herein by reference.
(d) This Statement is being filed by the Company, which is the Issuer.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "Source and Amount of Funds" in Section
10 of the Offer to Purchase is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER.
(a)-(j) The information set forth in the "Introduction" to the Offer to
Purchase and in the "Background and Purpose of the Offer; Certain Effects of
the Offer" in Section 8 and "Interests of Directors and Executive Officers;
Transactions and Arrangements Concerning the Shares" in Section 9, in each
case of the Offer to Purchase, is incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth in "Interests of Directors and Executive Officers;
Transactions and Arrangements Concerning the Shares" in Section 9 of the Offer
to Purchase and "Certain Transactions Involving Shares" in Schedule I to the
Offer to Purchase is incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
The information set forth in the "Introduction" to the Offer to Purchase,
"Background and Purpose of the Offer; Certain Effects of the Offer" in Section
8 of the Offer to Purchase and "Interests of Directors and Executive Officers;
Transactions and Arrangements Concerning the Shares" in Section 9 of the Offer
to Purchase is incorporated herein by reference.
1
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ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the "Introduction" to the Offer to Purchase and
"Fees and Expenses" in Section 16 of the Offer to Purchase is incorporated
herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The information set forth in "Certain Information About the Company"
in Section 11 of the Offer to Purchase is incorporated herein by reference.
The information set forth in (i) the Company's Annual Report on Form 10-K for
the year ended December 31, 1997, filed with the Securities and Exchange
Commission (the "Commission"); (ii) the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996, filed with the Commission; and
(iii) the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998, filed with the Commission, is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The information set forth in "Certain Legal Matters; Regulatory
Approvals" in Section 13 of the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in "Effects of the Offer on the Market for
Shares; Registration Under the Exchange Act" in Section 12 of the Offer to
Purchase is incorporated herein by reference.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and the related
Letter of Transmittal, copies of forms of which are attached hereto as
Exhibits (a)(1) and (a)(2), respectively, is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase dated May 6, 1998.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Form of Letter dated May 6, 1998 to shareholders from the Chairman of
the Company.
(a)(7) Form of Press Release issued by the Company dated May 6, 1998.
(a)(8) Form of Summary Advertisement dated May 6, 1998.
(a)(9) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
2
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(e) Not applicable.
(f) Not applicable.
(g)(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1997 filed with the Commission and incorporated by reference herein.
(g)(2) The Company's Annual Report on Form 10-K for the year ended December
31, 1996 filed with the Commission and incorporated by reference herein.
(g)(3) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998 filed with the Commission and incorporated by reference herein.
3
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
AVONDALE INDUSTRIES, INC.
/s/ Albert L. Bossier, Jr.
By:__________________________________
Albert L. Bossier, Jr.
Chairman, President and Chief
Executive Officer
Dated: May 6, 1998
4
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INDEX TO EXHIBITS
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<CAPTION>
ITEM DESCRIPTION
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<C> <S>
(a)(1) Form of Offer to Purchase dated May 6, 1998.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Form of Letter dated May 6, 1998 to shareholders from the Chairman of
the Company.
(a)(7) Form of Press Release issued by the Company dated May 6, 1998.
(a)(8) Form of Summary Advertisement dated May 6, 1998.
(a)(9) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(b) Not applicable.
(c) Not applicable
(d) Not applicable
(e) Not applicable
(f) Not applicable
(g)(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1997 filed with the Commission and incorporated by reference
herein.
(g)(2) The Company's Annual Report on Form 10-K for the year ended December
31, 1996 filed with the Commission and incorporated by reference
herein.
(g)(3) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998 filed with the Commission and incorporated by reference
herein.
</TABLE>
5
<PAGE>
EXHIBIT 9(A)(1)
<PAGE>
AVONDALE INDUSTRIES, INC.
OFFER TO PURCHASE FOR CASH UP TO
1,250,000 SHARES OF ITS COMMON STOCK
AT A PURCHASE PRICE NOT GREATER THAN $29.00
NOR LESS THAN $26.50 PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, JUNE 3, 1998, UNLESS THE OFFER IS EXTENDED
BY THE COMPANY.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER.
HOWEVER, SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH
SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS
MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR
REFRAIN FROM TENDERING SHARES. THE COMPANY DOES NOT KNOW AT THE DATE OF
THE OFFER WHETHER ANY DIRECTORS, EXECUTIVE OFFICERS OR AFFILIATES OF
THE COMPANY WILL TENDER ANY SHARES PURSUANT TO THE OFFER.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
----------------
Avondale Industries, Inc., a Louisiana corporation (the "Company"), invites
its shareholders to tender shares of its common stock, par value $1.00 per
share (the "Shares"), to the Company at prices not greater than $29.00 nor
less than $26.50 per Share in cash, specified by tendering shareholders, upon
the terms and subject to the conditions set forth in this Offer to Purchase
and the related Letter of Transmittal (which, as amended from time to time,
together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the Offer,
determine a single per Share price (not greater than $29.00 nor less than
$26.50 per Share), net to the seller in cash (the "Purchase Price"), that it
will pay for Shares validly tendered and not withdrawn pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified
by tendering shareholders. The Company will select the lowest Purchase Price
that will allow it to buy 1,250,000 Shares validly tendered and not withdrawn
pursuant to the Offer (or such lesser number of Shares as are validly tendered
at prices not greater than $29.00 nor less than $26.50 per Share). The Company
will pay the Purchase Price for all Shares validly tendered at prices at or
below the Purchase Price and not withdrawn, upon the terms and subject to the
conditions of the Offer including the proration terms hereof. The Company
reserves the right, in its sole discretion, to purchase more than 1,250,000
Shares pursuant to the Offer.
The Shares are traded on the Nasdaq National Market ("Nasdaq") under the
symbol "AVDL". On May 5, 1998, the last full trading day before the Company's
announcement of the Offer, the closing per Share sales price as reported by
Nasdaq was $26 1/4. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS
FOR THE SHARES. SEE SECTION 7.
----------------
The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
----------------
May 6, 1998.
<PAGE>
IMPORTANT
Any shareholders desiring to tender all or any portion of their Shares
should either (i) complete and sign the Letter of Transmittal or a facsimile
thereof in accordance with the instructions in the Letter of Transmittal, mail
or deliver it with any required signature guarantee and any other required
documents to ChaseMellon Shareholder Services, L.L.C. (the "Depositary"), and
either mail or deliver the stock certificates for such Shares to the
Depositary (with all such other documents) or follow the procedure for book-
entry delivery set forth in Section 3, or (ii) request a broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
such shareholder. A shareholder having Shares registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
that broker, dealer, commercial bank, trust company or other nominee if such
shareholder desires to tender such Shares. Shareholders who desire to tender
Shares and whose certificates for such Shares are not immediately available or
who cannot comply with the procedure for book-entry transfer on a timely basis
or whose other required documentation cannot be delivered to the Depositary,
in any case, by the expiration of the Offer should tender such Shares by
following the procedures for guaranteed delivery set forth in Section 3. TO
EFFECT A VALID TENDER OF THEIR SHARES, SHAREHOLDERS MUST VALIDLY COMPLETE THE
LETTER OF TRANSMITTAL, INCLUDING THE SECTION RELATING TO THE PRICE AT WHICH
THEY ARE TENDERING SHARES.
Questions and requests for assistance may be directed to Georgeson &
Company, Inc. (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. Requests for additional copies of this Offer to Purchase,
the Letter of Transmittal or the Notice of Guaranteed Delivery may be directed
to the Information Agent at its address and telephone number set forth on the
back cover of this Offer to Purchase.
2
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SUMMARY
This general summary is provided for the convenience of the Company's
shareholders and is qualified in its entirety by reference to the full text and
more specific details of this Offer to Purchase.
Number of Shares to be
Purchased.................. 1,250,000 Shares (or such lesser number of Shares
as are validly tendered).
Purchase Price.............. The Company will determine a single per Share net
cash price, not greater than $29.00 nor less than
$26.50 per Share, that it will pay for Shares
validly tendered. All Shares acquired in the
Offer will be acquired at the Purchase Price even
if tendered below the Purchase Price. Each
shareholder desiring to tender Shares must
specify in the Letter of Transmittal the minimum
price (not greater than $29.00 nor less than
$26.50 per Share, in multiples of $.125) at which
such shareholder is willing to have Shares
purchased by the Company.
How to Tender Shares........ See Section 3. Call the Information Agent or
consult your broker for assistance.
Brokerage Commissions....... None.
Stock Transfer Tax.......... None, if payment is made to the registered
holder.
Expiration and Proration
Dates...................... Wednesday, June 3, 1998, at 12:00 Midnight, New
York City time, unless extended by the Company.
Payment Date................ As soon as practicable after the Expiration Date
(as defined in Section 1).
Position of the Company and
its Board of Directors..... Neither the Company nor its Board of Directors
makes any recommendation to any shareholder as to
whether to tender or refrain from tendering
Shares.
Withdrawal Rights........... Tendered Shares may be withdrawn at any time
until 12:00 Midnight, New York City time, on
Wednesday, June 3, 1998, unless the Offer is
extended by the Company and, unless previously
purchased, after 12:00 Midnight, New York City
time, on Wednesday, July 1, 1998. See Section 4.
Odd Lots.................... There will be no proration of Shares tendered by
any shareholder who owns beneficially fewer than
100 Shares in the aggregate as of May 5, 1998,
and continues to beneficially own fewer than 100
Shares on the Expiration Date, and who tenders
all of such Shares at or below the Purchase Price
prior to the Expiration Date and who checks the
"Odd Lots" box in the Letter of Transmittal.
THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM
TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY
PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH
THE OFFER ON BEHALF OF THE COMPANY OTHER THAN THOSE CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL. DO NOT RELY ON ANY SUCH
RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION, IF GIVEN OR MADE, AS
HAVING BEEN AUTHORIZED BY THE COMPANY.
3
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TABLE OF CONTENTS
<TABLE>
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SECTION PAGE
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SUMMARY................................................................... 3
INTRODUCTION.............................................................. 5
THE OFFER................................................................. 6
1.Number of Shares; Proration.......................................... 6
2.Tenders by Owners of Fewer than 100 Shares........................... 8
3.Procedure for Tendering Shares....................................... 8
4.Withdrawal Rights.................................................... 12
5.Purchase of Shares and Payment of Purchase Price..................... 13
6.Certain Conditions of the Offer...................................... 13
7.Price Range of Shares; Dividends..................................... 15
8.Background and Purpose of the Offer; Certain Effects of the Offer.... 15
9. Interests of Directors and Executive Officers; Transactions and
Arrangements Concerning the Shares.................................. 17
10.Source and Amount of Funds........................................... 17
11.Certain Information about the Company................................ 18
12.Effects of the Offer on the Market for Shares; Registration under the
Exchange Act........................................................... 20
13.Certain Legal Matters; Regulatory Approvals.......................... 20
14.Certain U.S. Federal Income Tax Consequences......................... 20
15.Extension of the Offer; Termination; Amendments...................... 22
16.Fees and Expenses.................................................... 23
17.Miscellaneous........................................................ 24
SCHEDULE I--CERTAIN TRANSACTIONS INVOLVING SHARES......................... S-1
</TABLE>
4
<PAGE>
To the Holders of Shares of Common Stock
of Avondale Industries, Inc.:
INTRODUCTION
Avondale Industries, Inc., a Louisiana corporation (the "Company"), invites
its shareholders to tender shares of its common stock, par value $1.00 per
share (the "Shares"), to the Company at prices not greater than $29.00 nor
less than $26.50 per Share in cash, specified by tendering shareholders, upon
the terms and subject to the conditions set forth in this Offer to Purchase
and the related Letter of Transmittal (which, as amended from time to time,
together constitute the "Offer").
The Company will, upon the terms and subject to the conditions of the Offer,
determine a single per Share price (not greater than $29.00 nor less than
$26.50 per Share), net to the seller in cash (the "Purchase Price"), that it
will pay for Shares validly tendered and not withdrawn pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified
by tendering shareholders. The Company will select the lowest Purchase Price
that will allow it to buy 1,250,000 Shares validly tendered and not withdrawn
pursuant to the Offer (or such lesser number of Shares as are validly tendered
at prices not greater than $29.00 nor less than $26.50 per Share). The Company
will pay the Purchase Price for all Shares validly tendered prior to the
Expiration Date (as defined in Section 1) at prices at or below the Purchase
Price and not withdrawn upon the terms and subject to the conditions of the
Offer, including the proration terms described below. The Company reserves the
right, in its sole discretion, to purchase more than 1,250,000 Shares pursuant
to the Offer.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
If, before the Expiration Date, more than 1,250,000 Shares (or such greater
number of Shares as the Company may elect to purchase) are validly tendered at
or below the Purchase Price and not withdrawn, the Company will, upon the
terms and subject to the conditions of the Offer, purchase Shares first from
all Odd Lot Owners (as defined in Section 2) who validly tender all their
Shares at or below the Purchase Price and then on a pro rata basis from all
other shareholders who validly tender Shares at prices at or below the
Purchase Price (and do not withdraw them prior to the Expiration Date). The
Company will return at its own expense all Shares not purchased pursuant to
the Offer, including Shares tendered at prices greater than the Purchase Price
and Shares not purchased because of proration. The Purchase Price will be paid
net to the tendering shareholder in cash for all Shares purchased. Tendering
shareholders will not be obligated to pay brokerage commissions, solicitation
fees or, subject to Instruction 7 of the Letter of Transmittal, stock transfer
taxes on the Company's purchase of Shares pursuant to the Offer. HOWEVER, ANY
TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE, SIGN AND RETURN TO
THE DEPOSITARY (AS DEFINED BELOW) THE SUBSTITUTE FORM W-9 THAT IS INCLUDED
WITH THE LETTER OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL
INCOME TAX WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAYABLE TO SUCH
SHAREHOLDER OR OTHER PAYEE PURSUANT TO THE OFFER. SEE SECTION 3. In addition,
the Company will pay all fees and expenses of Salomon Smith Barney (the
"Dealer Manager"), Georgeson & Company, Inc. (the "Information Agent") and
ChaseMellon Shareholder Services, L.L.C. (the "Depositary") in connection with
the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER.
HOWEVER, SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES
SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES. THE COMPANY DOES NOT KNOW AT THE DATE OF THE OFFER WHETHER
ANY DIRECTORS, EXECUTIVE OFFICERS OR AFFILIATES OF THE COMPANY WILL TENDER ANY
SHARES PURSUANT TO THE OFFER.
5
<PAGE>
The Company is making the Offer to (i) use the Company's cash to lower its
cost of capital for the benefit of its shareholders, and (ii) provide those
shareholders who are considering a sale of all or a portion of their Shares
the opportunity to determine the price or prices (not greater than $29.00 nor
less than $26.50 per Share) at which they are willing to sell their Shares
and, if any such Shares are purchased pursuant to the Offer, to sell those
Shares for cash without the usual transaction costs associated with open
market sales. In addition, the Offer may give shareholders an opportunity to
sell their Shares at a price greater than the market prices of the Shares
prevailing prior to the announcement of the Offer. Moreover, the Board of
Directors believes that the Shares represent an attractive investment
opportunity. After the Offer is completed, the Company expects to have
sufficient cash and access to other sources of capital to fund its operations.
As of the close of business on May 5, 1998, there were 14,493,211 Shares
outstanding and 494,343 Shares issuable upon exercise of all outstanding stock
options ("Options"). The Shares that the Company is offering to purchase
represent approximately 8.6% of the outstanding Shares (approximately 8.3%
assuming the exercise of all outstanding Options).
The Shares are traded on the Nasdaq National Market ("Nasdaq") under the
symbol "AVDL". On May 5, 1998, the last full trading day before the Company's
announcement of the Offer, the closing per Share sales price as reported on
Nasdaq was $26 1/4. THE COMPANY URGES SHAREHOLDERS TO OBTAIN CURRENT
QUOTATIONS OF THE MARKET PRICE OF THE SHARES. SEE SECTION 7.
THE OFFER
1. NUMBER OF SHARES; PRORATION
Upon the terms and subject to the conditions of the Offer, the Company will
purchase 1,250,000 Shares or such lesser number of Shares as are validly
tendered before the Expiration Date (and not withdrawn in accordance with
Section 4) at a net cash price (determined in the manner set forth below) not
greater than $29.00 nor less than $26.50 per Share. The term "Expiration Date"
means 12:00 Midnight, New York City time, on Wednesday, June 3, 1998, unless
and until the Company in its sole discretion shall have extended the period of
time during which the Offer is open, in which event the term "Expiration Date"
shall refer to the latest time and date at which the Offer, as so extended by
the Company, shall expire. See Section 15 for a description of the Company's
right to extend the time during which the Offer is open and to delay,
terminate or amend the Offer. Subject to Section 2, if the Offer is
oversubscribed, Shares tendered at or below the Purchase Price before the
Expiration Date will be eligible for proration. The proration period also
expires on the Expiration Date.
The Company will, upon the terms and subject to the conditions of the Offer,
determine a single per Share Purchase Price that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer, taking into account
the number of Shares so tendered and the prices specified by tendering
shareholders. The Company will select the lowest Purchase Price that will
allow it to buy 1,250,000 Shares validly tendered and not withdrawn pursuant
to the Offer (or such lesser number as are validly tendered at prices not
greater than $29.00 nor less than $26.50 per Share). The Company reserves the
right, in its sole discretion, to purchase more than 1,250,000 Shares pursuant
to the Offer. See Section 15. In accordance with applicable regulations of the
Securities and Exchange Commission (the "Commission"), the Company may
purchase pursuant to the Offer an additional amount of Shares not to exceed 2%
of the outstanding Shares without amending or extending the Offer. If (i) the
Company increases the price to be paid for Shares above $29.00 per Share or
decreases the price to be paid for Shares below $26.50 per Share, the Company
increases or decreases the Dealer Manager's fee, the Company increases the
number of Shares being sought and such increase in the number of Shares being
sought exceeds 2% of the outstanding Shares, or the Company decreases the
number of Shares being sought and (ii) the Offer is scheduled to expire at any
time earlier than the expiration of a period ending on the tenth business day
from, and including, the date that notice of such increase or decrease is
first published, sent or given in the manner specified in Section 15, the
Offer will be extended until the expiration of such period of ten business
days. For purposes
6
<PAGE>
of the Offer, a "business day" means any day other than a Saturday, Sunday or
federal holiday and consists of the time period from 12:01 A.M. through 12:00
Midnight, New York City time.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6.
In accordance with Instruction 5 of the Letter of Transmittal, each
shareholder desiring to tender Shares must specify the price (not greater than
$29.00 nor less than $26.50 per Share, in multiples of $.125) at which such
shareholder is willing to have the Company purchase Shares. As promptly as
practicable following the Expiration Date, the Company will, in its sole
discretion, determine the Purchase Price (not greater than $29.00 nor less
than $26.50 per Share) that it will pay for Shares validly tendered and not
withdrawn pursuant to the Offer, taking into account the number of Shares so
tendered and the prices specified by tendering shareholders. The Company will
pay the Purchase Price, even if such Shares were tendered below the Purchase
Price, for all Shares validly tendered prior to the Expiration Date at prices
at or below the Purchase Price and not withdrawn, upon the terms and subject
to the conditions of the Offer. All Shares not purchased pursuant to the
Offer, including Shares tendered at prices greater than the Purchase Price and
Shares not purchased because of proration, will be returned to the tendering
shareholders at the Company's expense as promptly as practicable following the
Expiration Date.
If the number of Shares validly tendered at or below the Purchase Price and
not withdrawn prior to the Expiration Date is less than or equal to 1,250,000
Shares (or such greater number of Shares as the Company may elect to purchase
pursuant to the Offer), the Company will, upon the terms and subject to the
conditions of the Offer, purchase at the Purchase Price all Shares so
tendered.
Priority. Upon the terms and subject to the conditions of the Offer, in the
event that prior to the Expiration Date more than 1,250,000 Shares (or such
greater number of Shares as the Company may elect to purchase pursuant to the
Offer) are validly tendered at or below the Purchase Price and not withdrawn,
the Company will purchase such validly tendered Shares in the following order
of priority:
(i) all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date by any Odd Lot Owner (as defined in
Section 2) who:
(a) tenders all Shares beneficially owned by such Odd Lot Owner at or
below the Purchase Price (partial tenders will not qualify for this
preference); and
(b) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(ii) after purchase of all of the foregoing Shares, all other Shares
validly tendered at or below the Purchase Price and not withdrawn prior to
the Expiration Date on a pro rata basis.
Proration. In the event that proration of tendered Shares is required, the
Company will determine the final proration factor as promptly as practicable
after the Expiration Date. Proration for each shareholder tendering Shares
(other than Odd Lot Owners) shall be based on the ratio of the number of
Shares tendered by such shareholder at or below the Purchase Price to the
total number of Shares tendered by all shareholders (other than Odd Lot
Owners) at or below the Purchase Price. This ratio will be applied to
shareholders tendering Shares (other than Odd Lot Owners) to determine the
number of Shares that will be purchased from each such shareholder pursuant to
the Offer. Although the Company does not expect to be able to announce the
final results of such proration until approximately seven business days after
the Expiration Date, it will announce preliminary results of proration by
press release as promptly as practicable after the Expiration Date.
Shareholders can obtain such preliminary information from the Information
Agent and may be able to obtain such information from their brokers.
As described in Section 14, the number of Shares that the Company will
purchase from a shareholder may affect the United States federal income tax
consequences to the shareholder of such purchase and therefore may
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be relevant to a shareholder's decision whether to tender Shares. The Letter
of Transmittal affords each tendering shareholder the opportunity to designate
the order of priority in which Shares tendered are to be purchased in the
event of proration.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares as of May 5, 1998 and will be furnished to
brokers, banks and similar persons whose names, or the names of whose
nominees, appear on the Company's shareholder list or, if applicable, who are
listed as participants in a clearing agency's security position listing for
subsequent transmittal to beneficial owners of Shares.
2. TENDERS BY OWNERS OF FEWER THAN 100 SHARES
The Company, upon the terms and subject to the conditions of the Offer, will
accept for purchase, without proration, all Shares validly tendered at or
below the Purchase Price and not withdrawn on or prior to the Expiration Date
by or on behalf of shareholders who beneficially owned as of the close of
business on May 5, 1998, and continue to beneficially own as of the Expiration
Date, an aggregate of fewer than 100 Shares ("Odd Lot Owners"). See Section 1.
To avoid proration, however, an Odd Lot Owner must validly tender at or below
the Purchase Price all such Shares that such Odd Lot Owner beneficially owns;
partial tenders will not qualify for this preference. This preference is not
available to partial tenders or to owners of 100 or more Shares in the
aggregate even if such owners have separate stock certificates for fewer than
100 such Shares. Any Odd Lot Owner wishing to tender all such Shares
beneficially owned by such shareholder pursuant to this Offer must complete
the box captioned "Odd Lots" in the Letter of Transmittal and, if applicable,
on the Notice of Guaranteed Delivery and must properly indicate in the section
entitled "Price (In Dollars) Per Share At Which Shares Are Being Tendered" in
the Letter of Transmittal the price at which such Shares are being tendered,
except that an Odd Lot Owner may check the box in the section entitled "Odd
Lots" indicating that the shareholder is tendering all of such shareholder's
Shares at the Purchase Price. See Section 3. Shareholders owning an aggregate
of fewer than 100 Shares whose Shares are purchased pursuant to the Offer will
avoid both the payment of brokerage commissions and any applicable odd lot
discounts payable on a sale of their Shares in transactions on a stock
exchange, including Nasdaq.
The Company also reserves the right, but will not be obligated, to purchase
all Shares duly tendered by any shareholder who tendered any Shares
beneficially owned at or below the Purchase Price and who, as a result of
proration, would then beneficially own an aggregate of fewer than 100 Shares.
If the Company exercises this right, it will increase the number of Shares
that it is offering to purchase in the Offer by the number of Shares purchased
through the exercise of such right.
3. PROCEDURE FOR TENDERING SHARES
Proper Tender of Shares. For Shares to be validly tendered pursuant to the
Offer:
(i) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedures for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal
(or manually signed facsimile thereof) with any required signature
guarantees, and any other documents required by the Letter of Transmittal,
must be received prior to 12:00 Midnight, New York City time, on the
Expiration Date by the Depositary at its address set forth on the back
cover of this Offer to Purchase; or
(ii) the tendering shareholder must comply with the guaranteed delivery
procedure set forth below.
AS SPECIFIED IN INSTRUCTION 5 OF THE LETTER OF TRANSMITTAL, EACH SHAREHOLDER
DESIRING TO TENDER SHARES PURSUANT TO THE OFFER MUST PROPERLY INDICATE IN THE
SECTION CAPTIONED "PRICE (IN DOLLARS) PER SHARE AT WHICH SHARES ARE BEING
TENDERED" IN THE LETTER OF TRANSMITTAL THE PRICE (IN MULTIPLES OF $.125) AT
WHICH SUCH SHAREHOLDER'S SHARES ARE BEING TENDERED, EXCEPT THAT AN ODD LOT
OWNER MAY CHECK THE BOX IN THE SECTION OF THE
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LETTER OF TRANSMITTAL ENTITLED "ODD LOTS" INDICATING THAT THE SHAREHOLDER IS
TENDERING ALL OF SUCH SHAREHOLDER'S SHARES AT THE PURCHASE PRICE. SHAREHOLDERS
DESIRING TO TENDER SHARES AT MORE THAN ONE PRICE MUST COMPLETE SEPARATE
LETTERS OF TRANSMITTAL FOR EACH PRICE AT WHICH SHARES ARE BEING TENDERED,
EXCEPT THAT THE SAME SHARES CANNOT BE TENDERED (UNLESS PROPERLY WITHDRAWN
PREVIOUSLY IN ACCORDANCE WITH THE TERMS OF THE OFFER) AT MORE THAN ONE PRICE.
IN ORDER TO VALIDLY TENDER SHARES, ONE AND ONLY ONE PRICE BOX MUST BE CHECKED
IN THE APPROPRIATE SECTION ON EACH LETTER OF TRANSMITTAL.
In addition, Odd Lot Owners who tender all Shares must complete the section
entitled "Odd Lots" on the Letter of Transmittal and, if applicable, on the
Notice of Guaranteed Delivery, in order to qualify for the preferential
treatment available to Odd Lot Owners as set forth in Section 2.
Signature Guarantees and Method of Delivery. No signature guarantee is
required on the Letter of Transmittal if (i) the Letter of Transmittal is
signed by the registered holder of the Shares (which term, for purposes of
this Section, includes any participant in The Depository Trust Company (the
"Book-Entry Transfer Facility") whose name appears on a security position
listing as the holder of the Shares) tendered therewith and payment and
delivery are to be made directly to such registered holder, or (ii) Shares are
tendered for the account of a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company (not a savings bank or savings and loan
association) having an office, branch or agency in the United States (each
such entity being hereinafter referred to as an "Eligible Institution"). In
all other cases, all signatures on the Letter of Transmittal must be
guaranteed by an Eligible Institution. See Instruction 1 of the Letter of
Transmittal. If a certificate representing Shares is registered in the name of
a person other than the signer of a Letter of Transmittal, or if payment is to
be made, or Shares not purchased or tendered are to be issued, to a person
other than the registered holder, the certificate must be endorsed or
accompanied by an appropriate stock power, in either case signed exactly as
the name of the registered holder appears on the certificate, with the
signature on the certificate or stock power guaranteed by an Eligible
Institution. In all cases, payment for Shares tendered and accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of certificates for such Shares (or a timely confirmation of a
book-entry transfer of such Shares into the Depositary's account at the Book-
Entry Transfer Facility as described below), a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile thereof) and any
other documents required by the Letter of Transmittal.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares at each Book- Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of the Shares by causing such
facility to transfer such Shares into the Depositary's account in accordance
with such facility's procedure for such transfer. Even though delivery of
Shares may be effected through book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility, a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile thereof), with
any required signature guarantees and 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 guaranteed delivery procedure set forth below must be followed.
DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO A
BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
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<PAGE>
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's Share certificates cannot be delivered to the
Depositary prior to the Expiration Date (or the procedures for book-entry
transfer cannot be completed on a timely basis) or time will not permit all
required documents to reach the Depositary before the Expiration Date, such
Shares may nevertheless be tendered provided that all of the following
conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) the Depositary receives (by hand, mail, overnight courier, telegram
or facsimile transmission), on or prior to the Expiration Date, a properly
completed and duly executed Notice of Guaranteed Delivery substantially in
the form the Company has provided with this Offer to Purchase (indicating
the price at which the Shares are being tendered), including (where
required) a signature guarantee by an Eligible Institution in the form set
forth in such Notice of Guaranteed Delivery; and
(iii) the certificates for all tendered Shares in proper form for
transfer (or confirmation of book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility), together with a
properly completed and duly executed Letter of Transmittal (or manually
signed facsimile thereof) and any required signature guarantees or other
documents required by the Letter of Transmittal, are received by the
Depositary no later than 5:00 p.m., New York City time, on the third
trading day after the date the Depositary receives such Notice of
Guaranteed Delivery.
If any tendered Shares are not purchased, or if less than all Shares
evidenced by a shareholder's certificates are tendered, certificates for
unpurchased Shares will be returned as promptly as practicable after the
expiration or termination of the Offer or, in the case of Shares tendered by
book-entry transfer at the Book-Entry Transfer Facility, such Shares will be
credited to the appropriate account maintained by the tendering shareholder at
the appropriate Book-Entry Transfer Facility, in each case without expense to
such shareholder.
Backup Federal Income Tax Withholding. Under the United States federal
income tax backup withholding rules, unless an exemption applies under the
applicable law and regulations, 31% of the gross proceeds payable to a
shareholder or other payee pursuant to the Offer must be withheld and remitted
to the United States Treasury, unless the shareholder or other payee provides
such person's taxpayer identification number (employer identification number
or social security number) to the Depositary and certifies under penalties of
perjury that such number is correct. Therefore, each tendering shareholder
should complete and sign the Substitute Form W-9 included as part of the
Letter of Transmittal so as to provide the information and certification
necessary to avoid backup withholding, unless such shareholder otherwise
establishes to the satisfaction of the Depositary that the shareholder is not
subject to backup withholding. Certain shareholders (including, among others,
all corporations and certain foreign shareholders (in addition to foreign
corporations)) are not subject to these backup withholding and reporting
requirements. In order for a foreign shareholder to qualify as an exempt
recipient, that shareholder must submit an IRS Form W-8 or a Substitute Form
W-8, signed under penalties of perjury, attesting to that shareholder's exempt
status. Such statements can be obtained from the Depositary. See Instructions
10 and 11 of the Letter of Transmittal.
TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING EQUAL TO 31% OF THE GROSS
PAYMENTS MADE TO SHAREHOLDERS FOR SHARES PURCHASED PURSUANT TO THE OFFER, EACH
SHAREHOLDER WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH
WITHHOLDING MUST PROVIDE THE DEPOSITARY WITH THE SHAREHOLDER'S CORRECT
TAXPAYER IDENTIFICATION NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY
COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER OF TRANSMITTAL.
For a discussion of certain United States federal income tax consequences to
tendering shareholders, see Section 14.
Withholding For Foreign Shareholders. Even if a foreign shareholder has
provided the required certification to avoid backup withholding, the
Depositary will withhold United States federal income taxes equal to 30% of
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the gross payments payable to a foreign shareholder or his or her agent unless
the Depositary determines that a reduced rate of withholding is available
pursuant to a tax treaty or that an exemption from withholding is applicable
because such gross proceeds are effectively connected with the conduct of a
trade or business within the United States. For this purpose, a foreign
shareholder is any shareholder that is not (i) a citizen or resident of the
United States, (ii) a corporation, partnership, or other entity created or
organized in or under the laws of the United States, any State or any
political subdivision thereof, (iii) an estate or trust described in Section
7701(a)(30) of the Code or (iv) a person whose worldwide income or gain is
subject to United States federal income taxation on a net income basis. In
order to obtain a reduced rate of withholding pursuant to a tax treaty, a
foreign shareholder must deliver to the Depositary before the payment a
properly completed and executed IRS Form 1001. In order to obtain an exemption
from withholding on the grounds that the gross proceeds paid pursuant to the
Offer are effectively connected with the conduct of a trade or business within
the United States, a foreign shareholder must deliver to the Depositary a
properly completed and executed IRS Form 4224. The Depositary will determine a
shareholder's status as a foreign shareholder and eligibility for a reduced
rate of, or exemption from, withholding by reference to any outstanding
certificates or statements concerning eligibility for a reduced rate of, or
exemption from, withholding (e.g., IRS Form 1001 or IRS Form 4224) unless
facts and circumstances indicate that such reliance is not warranted. A
foreign shareholder may be eligible to obtain a refund of all or a portion of
any tax withheld if such shareholder meets the "complete redemption,"
"substantially disproportionate" or "not essentially equivalent to a dividend"
test described in Section 14 or is otherwise able to establish that no tax or
a reduced amount of tax is due. Backup withholding generally will not apply to
amounts subject to the 30% or a treaty-reduced rate of withholding. Foreign
shareholders are urged to consult their own tax advisors regarding the
application of United States federal income tax withholding, including
eligibility for a withholding tax reduction or exemption, and the refund
procedure. See Instructions 10 and 11 of the Letter of Transmittal.
ESOP. As of May 5, 1998, the Avondale Employee Stock Ownership Plan (the
"ESOP") held 2,808,208, or 19.4% of the outstanding, Shares, all of which were
held for the benefit of participants. In accordance with the terms of the
ESOP, such Shares will be tendered (or not tendered) by the Trustees upon
instructions from the ESOP Administrative Committee, in their sole discretion.
Under ERISA the Company will be prohibited from purchasing any Shares from the
ESOP (including Shares allocated to the accounts of participants) if the
Purchase Price is less than the prevailing market price of the Shares on the
date the Shares are accepted for payment pursuant to the Offer. If Shares
tendered from the ESOP would have been accepted pursuant to the terms of the
Offer except for this prohibition, such Shares shall automatically be deemed
to be withdrawn. If the ESOP does not tender any of its Shares, or if the
Company does not purchase any of the Shares tendered by the ESOP, and the
Company accepts the tender of 1,250,000 Shares owned by other shareholders,
the ESOP will own 21.2% of the outstanding shares of the Company following
completion of the tender offer.
Tendering Shareholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. It is a violation of Rule 14e-4 promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), for a
person acting alone or in concert with others, directly or indirectly, to
tender Shares for such person's own account unless at the time of tender and
at the Expiration Date such person has a "net long position" equal to or
greater than the amount tendered in (a) the Shares and will deliver or cause
to be delivered such Shares for the purpose of tender to the Company within
the period specified in the Offer, or (b) other securities immediately
convertible into, exercisable for or exchangeable into Shares ("Equivalent
Securities") and, upon the acceptance of such tender, will acquire such Shares
by conversion, exchange or exercise of such Equivalent Securities to the
extent required by the terms of the Offer and will deliver or cause to be
delivered such Shares so acquired for the purpose of tender to the Company
within the period specified in the Offer. Rule 14e-4 also provides a similar
restriction applicable to the tender or guarantee of a tender on behalf of
another person. A tender of Shares made pursuant to any method of delivery set
forth herein will constitute the tendering shareholder's representation and
warranty to the Company that (a) such shareholder has a "net long position" in
Shares or Equivalent Securities being tendered within the meaning of Rule 14e-
4, and (b) such tender of Shares complies with Rule 14e-4. The Company's
acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering shareholder and the
Company upon the terms and subject to the conditions of the Offer.
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Determinations of Validity; Rejection of Shares; Waiver of Defects; No
Obligation to Give Notice of Defects. All questions as to the number of Shares
to be accepted, the price to be paid therefor and the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by the Company, in its sole discretion,
which determination shall be final and binding on all parties. The Company
reserves the absolute right to reject any or all tenders it determines not to
be in proper form or the acceptance of or payment for which may, in the
opinion of the Company's counsel, be unlawful. The Company also reserves the
absolute right to waive any of the conditions of the Offer and any defect or
irregularity in the tender of any particular Shares or any particular
shareholder. No tender of Shares will be deemed to be properly made until all
defects or irregularities have been cured or waived. None of the Company, the
Dealer Manager, the Depositary, the Information Agent or any other person is
or will be obligated to give notice of any defects or irregularities in
tenders, and none of them will incur any liability for failure to give any
such notice.
CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF
TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL,
MUST BE DELIVERED TO THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH DOCUMENTS
DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE
WILL NOT BE DEEMED TO BE VALIDLY TENDERED.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time before the Expiration Date and, unless accepted for
payment by the Company as provided in this Offer to Purchase, may also be
withdrawn after 12:00 Midnight, New York City time, on July 1, 1998.
For a withdrawal to be effective, the Depositary must receive (at its
address set forth on the back cover of this Offer to Purchase) a notice of
withdrawal in written, telegraphic or facsimile transmission form on a timely
basis. Such notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares tendered, the number
of Shares to be withdrawn and the name of the registered holder, if different
from that of the person who tendered such Shares. If the certificates have
been delivered or otherwise identified to the Depositary, then, prior to the
release of such certificates, the tendering shareholder must also submit the
serial numbers shown on the particular certificates evidencing the Shares and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible
Institution). If Shares have been tendered pursuant to the procedure for book-
entry transfer set forth in Section 3, the notice of withdrawal must specify
the name and the number of the account at the Book-Entry Transfer Facility to
be credited with the withdrawn Shares and otherwise comply with the procedures
of such facility. All questions as to the form and validity, including time of
receipt, of notices of withdrawal will be determined by the Company, in its
sole discretion, which determination shall be final and binding on all
parties. None of the Company, the Dealer Manager, the Depositary, the
Information Agent or any other person is or will be obligated to give any
notice of any defects or irregularities in any notice of withdrawal, and none
of them will incur any liability for failure to give any such notice.
Withdrawals may not be rescinded and any Shares properly withdrawn will
thereafter be deemed not tendered for purposes of the Offer. However,
withdrawn Shares may be retendered before the Expiration Date by again
following any of the procedures described in Section 3.
If the Company extends the Offer, is delayed in its purchase of Shares or is
unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain on behalf of the Company all tendered Shares, and
such Shares may not be withdrawn except to the extent tendering shareholders
are entitled to withdrawal rights as described in this Section 4.
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5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE
The Company will, upon the terms and subject to the conditions of the Offer,
determine a single per Share Purchase Price that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer, taking into account
the number of Shares so tendered and the prices specified by tendering
shareholders, and will accept for payment and pay for (and thereby purchase)
Shares validly tendered at or below the Purchase Price and not withdrawn as
soon as practicable after the Expiration Date. For purposes of the Offer, the
Company will be deemed to have accepted for payment (and therefore purchased),
subject to proration, Shares that are validly tendered at or below the
Purchase Price and not withdrawn when, as and if it gives oral or written
notice to the Depositary of its acceptance of such Shares for payment pursuant
to the Offer.
Upon the terms and subject to the conditions of the Offer, the Company will
purchase and pay a single per Share Purchase Price for all of the Shares
accepted for payment pursuant to the Offer as soon as practicable after the
Expiration Date. In all cases, payment for Shares tendered and accepted for
payment pursuant to the Offer will be made promptly (subject to possible delay
in the event of proration) but only after timely receipt by the Depositary of
certificates for Shares (or of a timely confirmation of a book-entry transfer
of such Shares into the Depositary's account at the Book-Entry Transfer
Facility), a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) and any other required documents.
Payment for Shares purchased pursuant to the Offer will be made by
depositing the aggregate Purchase Price therefor with the Depositary, which
will act as agent for tendering shareholders for the purpose of receiving
payment from the Company and transmitting payment to the tendering
shareholders. In the event of proration, the Company will determine the
proration factor and pay for those tendered Shares accepted for payment as
soon as practicable after the Expiration Date. However, the Company does not
expect to be able to announce the final results of any such proration until
approximately seven business days after the Expiration Date. Under no
circumstances will the Company pay interest on the Purchase Price including,
without limitation, by reason of any delay in making payment. Certificates for
all Shares not purchased, including all Shares tendered at prices greater than
the Purchase Price and Shares not purchased due to proration, will be returned
(or, in the case of Shares tendered by book-entry transfer, such Shares will
be credited to the account maintained with the Book-Entry Transfer Facility by
the participant who delivered such Shares) as promptly as practicable
following the Expiration Date or termination of the Offer without expense to
the tendering shareholder. In addition, if certain events occur, the Company
may not be obligated to purchase Shares pursuant to the Offer. See Section 6.
The Company will pay all stock transfer taxes, if any, payable on the
transfer to it of Shares purchased pursuant to the Offer; provided, however,
that if payment of the Purchase Price is to be made to, or (in the
circumstances permitted by the Offer) if unpurchased Shares are to be
registered in the name of, any person other than the registered holder, or if
tendered certificates are registered in the name of any person other than the
person signing the Letter of Transmittal, the amount of all stock transfer
taxes, if any (whether imposed on the registered holder or such other person),
payable on account of the transfer to such person will be deducted from the
Purchase Price unless evidence satisfactory to the Company of the payment of
such taxes or exemption therefrom is submitted. See Instruction 7 of the
Letter of Transmittal.
ANY TENDERING SHAREHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY, SIGN
AND RETURN TO THE DEPOSITARY THE SUBSTITUTE FORM W-9 INCLUDED WITH THE LETTER
OF TRANSMITTAL MAY BE SUBJECT TO REQUIRED BACKUP FEDERAL INCOME TAX
WITHHOLDING OF 31% OF THE GROSS PROCEEDS PAID TO SUCH SHAREHOLDER OR OTHER
PAYEE PURSUANT TO THE OFFER. SEE SECTION 3. ALSO SEE SECTION 3 REGARDING
FEDERAL INCOME TAX CONSEQUENCES FOR FOREIGN SHAREHOLDERS.
6. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, the Company shall not be
required to accept for payment, purchase or pay for any Shares tendered, and
may terminate or amend the Offer or may postpone the acceptance for payment
of, or the purchase of and the payment for Shares tendered, subject to Rule
13e-4(f) promulgated
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under the Exchange Act, if at any time on or after May 5, 1998 and prior to
the Expiration Date, any of the following events shall have occurred (or shall
have been determined by the Company to have occurred) that, in the Company's
judgment in any such case and regardless of the circumstances giving rise
thereto (including any action or omission to act by the Company), makes it
inadvisable to proceed with the Offer or with such acceptance for payment or
payment:
(a) there shall have been threatened, instituted or be pending before any
court, agency, authority or other tribunal any action, suit or proceeding
by any government or governmental, regulatory or administrative agency or
authority or by any other person, domestic or foreign, or any judgment,
order or injunction entered, enforced or deemed applicable by any such
court, authority, agency or tribunal, which (i) challenges or seeks to make
illegal, or to delay or otherwise directly or indirectly to restrain,
prohibit or otherwise affect the making of the Offer, the acquisition of
Shares pursuant to the Offer or is otherwise related in any manner to, or
otherwise affects, the Offer; or (ii) could, in the sole judgment of the
Company, materially affect the business, condition (financial or other),
income, operations or prospects of the Company and its subsidiaries, taken
as a whole, or otherwise materially impair in any way the contemplated
future conduct of the business of the Company and its subsidiaries, taken
as a whole, or materially impair the Offer's contemplated benefits to the
Company; or
(b) there shall have been any action threatened or taken, or any approval
withheld, or any statute, rule or regulation invoked, proposed, sought,
promulgated, enacted, entered, amended, enforced or deemed to be applicable
to the Offer or the Company or any of its subsidiaries, by any government
or governmental, regulatory or administrative authority or agency or
tribunal, domestic or foreign, which, in the sole judgment of the Company,
would or might directly or indirectly result in any of the consequences
referred to in clause (i) or (ii) of paragraph (a) above; or
(c) there shall have occurred (i) the declaration of any banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory); (ii) any general suspension of trading
in, or limitation on prices for, securities on any United States national
securities exchange or in the over-the-counter market; (iii) the
commencement of a war, armed hostilities or any other national or
international crisis directly or indirectly involving the United States;
(iv) any limitation (whether or not mandatory) by any governmental,
regulatory or administrative agency or authority on, or any event which, in
the sole judgment of the Company might materially affect, the extension of
credit by banks or other lending institutions in the United States; (v) (A)
any significant decrease in the market price of the Shares or in the market
prices of equity securities generally in the United States or (B) any
change in the general political, market, economic or financial conditions
in the United States or abroad that could have in the sole judgment of the
Company a material adverse effect on the business, condition (financial or
otherwise), income, operations or prospects of the Company and its
subsidiaries, taken as a whole, or on the trading in the Shares; (vi) in
the case of any of the foregoing existing at the time of the announcement
of the Offer, a material acceleration or worsening thereof; or (vii) any
decline in either the Dow Jones Industrial Average or the S&P 500 Composite
Index by an amount in excess of 10% measured from the close of business on
May 5, 1998; or
(d) any change shall occur or be threatened in the business, condition
(financial or other), income, operations or prospects of the Company and
its subsidiaries, taken as a whole, which in the sole judgment of the
Company is or may be material to the Company and its subsidiaries taken as
a whole; or
(e) it shall have been publicly disclosed or the Company shall have
learned that (i) any person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act) has acquired or proposes to acquire
beneficial ownership of more than 5% of the outstanding Shares whether
through the acquisition of stock, the formation of a group, the grant of
any option or right or otherwise (other than as disclosed in a Schedule 13D
or 13G on file with the Commission on February 13, 1998) or (ii) any such
person or group that on or prior to May 5, 1998 had filed such a Schedule
with the Commission thereafter shall have acquired or shall propose to
acquire whether through the acquisition of stock, the formation of a group,
the grant of any option or right or otherwise, beneficial ownership of
additional Shares representing 2% or more of the outstanding Shares; or
14
<PAGE>
(f) any person or group shall have filed a Notification and Report Form
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 reflecting
an intent to acquire the Company or any of its Shares; or
(g) if the acceptance for purchase by the Company of Shares tendered
pursuant to the Offer would be deemed a "Rule 13e-3 transaction" within the
meaning of Rule 13e-3 of the Securities and Exchange Commission.
The foregoing conditions are for the Company's sole benefit and may be
asserted by the Company regardless of the circumstances giving rise to any
such condition (including any action or inaction by the Company) or may be
waived by the Company in whole or in part. The Company's failure at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any
such right, and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time. Any determination by the Company
concerning the events described above and any related judgment or decision by
the Company regarding the inadvisability of proceeding with the purchase of or
payment for any Shares tendered will be final and binding on all parties.
7. PRICE RANGE OF SHARES; DIVIDENDS
The Shares are traded on the Nasdaq National Market under the symbol AVDL.
The high and low sales prices per Share as reported by Nasdaq for the periods
indicated are listed below:
<TABLE>
<CAPTION>
HIGH LOW
---- ----
<S> <C> <C>
Fiscal Year 1998
Second Quarter (through May 5, 1998)................... $29 $25 1/4
First Quarter.......................................... 29 7/8 25
Fiscal Year 1997
Fourth Quarter......................................... $30 $24 3/4
Third Quarter.......................................... 29 20 5/8
Second Quarter......................................... 21 3/8 16 1/4
First Quarter.......................................... 23 1/2 17
Fiscal Year 1996
Fourth Quarter......................................... $22 $16 1/4
Third Quarter.......................................... 19 1/8 13 7/8
Second Quarter......................................... 20 1/8 16 7/8
First Quarter.......................................... 18 1/8 14
</TABLE>
The closing per Share sales price as reported by Nasdaq on May 5, 1998, the
last full trading day before the Company's announcement of the Offer, was $26
1/4. THE COMPANY URGES SHAREHOLDERS TO OBTAIN CURRENT QUOTATIONS OF THE MARKET
PRICE OF THE SHARES.
The Company does not currently pay dividends on its Shares and no dividends
were paid on the Shares during the two years ended December 31, 1997.
8. BACKGROUND AND PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER
The following discussion contains forward-looking statements that involve
risks and uncertainties. These forward-looking statements are generally
accompanied by such terms and phrases as "anticipates," "estimates,"
"expects," "believes," "should," "projects," or "scheduled," or similar
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct. Important factors that
could cause the Company's results to differ materially from the results
discussed in such forward-looking statements include the Company's reliance on
U.S. Navy contracts, including its ability to replenish its backlog by
securing additional contracts from the U.S. Navy, profit recognition on
government contracts, the outcome of the Company's litigation involving
efforts to unionize the Company's production workers, and the competitive
impact of a resolution of the litigation in favor of the union, the importance
of obtaining commercial contracts, the Company's ability to complete its
contracts within its cost estimates, intense competition for government and
15
<PAGE>
commercial contracts and labor, regulatory and other risks in the shipbuilding
and marine construction industries. All forward-looking statements in this
Offer to Purchase are expressly qualified in their entirety by the cautionary
statements in this paragraph.
The Company is making the Offer to (i) use the Company's cash to lower its
cost of capital for the benefit of its shareholders and (ii) provide those
shareholders who desire liquidity an opportunity to sell all or a portion of
their Shares without the usual transaction costs associated with open market
sales. After the Offer is completed, the Company expects to have sufficient
cash flow and access to other sources of capital to fund its operations.
The Board of Directors believes that, given the Company's business, assets
and prospects, the purchase of the Shares pursuant to the Offer is an
attractive investment that will benefit the Company and its remaining
shareholders. In particular, the Board of Directors believes that the purchase
of Shares at this time is consistent with the Company's long-term corporate
goal of seeking to increase shareholder value. The Offer provides shareholders
who are considering a sale of all or a portion of their Shares the opportunity
to determine the price or prices (not greater than $29.00 nor less than $26.50
per Share) at which they are willing to sell their Shares and, if any such
Shares are purchased pursuant to the Offer, to sell those Shares for cash to
the Company without the usual costs associated with a market sale. In
addition, the Offer may give shareholders an opportunity to sell their Shares
at a price greater than the market prices of the Shares prevailing immediately
prior to the announcement of the Offer. The Offer would also allow Odd Lot
Owners whose Shares are purchased pursuant to the Offer to avoid both the
payment of brokerage commissions and any applicable odd lot discounts payable
on sales of odd lots on a securities exchange. To the extent the purchase of
Shares in the Offer results in a reduction in the number of shareholders of
record, the costs to the Company for services to shareholders should be
reduced. The Offer also allows shareholders to sell a portion of their Shares
while retaining a continuing equity interest in the Company if they so desire.
Shareholders who determine not to accept the Offer will increase their
proportionate interest in the Company's equity, and therefore in the Company's
future earnings and assets, subject to the Company's right to issue additional
Shares and other equity securities in the future.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER.
HOWEVER, SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES
SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES AND NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS HAS
AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. THE COMPANY DOES NOT
KNOW AT THE DATE OF THE OFFER WHETHER ANY DIRECTORS, EXECUTIVE OFFICERS OR
AFFILIATES OF THE COMPANY WILL TENDER ANY SHARES PURSUANT TO THE OFFER.
The Company may in the future purchase Shares in the open market, in private
transactions, through tender offers or otherwise. However, Rule 13e-4 under
the Exchange Act prohibits the Company from making any purchases of Shares
until 10 business days after the Expiration Date, other than pursuant to the
Offer. Any purchases of Shares the Company may choose to make may be on the
same terms as, or on terms more or less favorable to shareholders than, the
terms of the Offer. Any possible future purchases by the Company will depend
on numerous factors, including the market price of the Shares, the results of
the Offer, the Company's business and financial condition and general economic
and market conditions.
Shares the Company acquires pursuant to the Offer will be retained as
treasury stock (unless and until the Company determines to retire such Shares)
and be available for issue without further shareholder action (except as
required by applicable law or, if retired, the rules of any securities
exchange on which Shares are listed) for purposes including, but not limited
to, the acquisition of other businesses, raising of additional capital for use
in the Company's businesses and satisfaction of obligations under existing or
future employee benefit plans. The Company has no current plan for issuance of
Shares repurchased pursuant to the Offer.
16
<PAGE>
Except as disclosed in this Offer to Purchase, the Company currently has no
plans or proposals that relate to or would result in (a) the acquisition by
any person of additional securities of the Company or the disposition of
securities of the Company; (b) an extraordinary corporate transaction, such as
a merger, reorganization or liquidation, involving the Company or any or all
of its subsidiaries; (c) a sale or transfer of a material amount of assets of
the Company or any of its subsidiaries; (d) any change in the present Board of
Directors or management of the Company; (e) any material change in the
indebtedness or capitalization of the Company or the payment of dividends on
the Shares; (f) any other material change in the Company's corporate structure
or business; (g) any material change in the Company's Articles of
Incorporation or By-Laws or any actions which may impede the acquisition of
control of the Company by any person; (h) a class of equity security of the
Company being delisted from a national securities exchange; (i) a class of
equity security of the Company becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) the
suspension of the Company's obligation to file reports pursuant to Section
15(d) of the Exchange Act.
9. INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND
ARRANGEMENTS CONCERNING THE SHARES
As of May 5, 1998, there were 14,493,211 Shares outstanding and 494,343
Shares issuable upon the exercise of all outstanding Options. As of May 5,
1998, the Company's directors and executive officers as a group (11 persons)
beneficially owned 259,804 Shares (including 54,990 Shares issuable upon the
exercise of Options exercisable within 60 days of such date), which
constituted approximately 1.8% of the outstanding Shares (including Shares
issuable if Options held by the Company's directors and executive officers
exercisable within 60 days of such date were exercised) at such time. If the
Company purchases 1,250,000 Shares pursuant to the Offer (approximately 8.6%
of the outstanding Shares as of May 5, 1998) and no director or executive
officer tenders Shares pursuant to the Offer, then after the purchase of
Shares pursuant to the Offer, the Company's directors and executive officers
as a group would beneficially own approximately 2.0% of the outstanding Shares
(including Shares issuable if Options held by the Company's directors and
executive officers exercisable within 60 days of such date were exercised).
The Company does not know at the date of the Offer whether any directors,
executive officers or affiliates of the Company will tender any Shares
pursuant to the Offer.
Except as set forth in Schedule I hereto, based on the Company's records and
information provided to the Company by its directors, executive officers,
associates and subsidiaries, neither the Company nor any of its associates or
subsidiaries or persons controlling the Company nor, to the best of the
Company's knowledge, any of the directors or executive officers of the Company
or any of its subsidiaries, nor any associates or subsidiaries of any of the
foregoing, has effected any transactions in the Shares during the 40 business
days prior to the date hereof.
In addition, as of May 5, 1998 the ESOP held 2,808,208, or 19.4% of the
outstanding Shares, all of which were held for the benefit of participants. If
the Company purchases 1,250,000 shares pursuant to the Offer, and the ESOP
does not tender any Shares, or if the Company does not purchase any of the
Shares which may be tendered by the ESOP, the ESOP will own 21.2% of the
outstanding Shares of the Company following completion of the tender offer.
Except as set forth in this Offer to Purchase, neither the Company or any
person controlling the Company nor, to the Company's knowledge, any of its
directors or executive officers, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to the Offer with respect to any securities of the Company
(including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any such securities,
joint ventures, loan or option arrangements, puts or calls, guarantees of
loans, guarantees against loss or the giving or withholding of proxies,
consents or authorizations).
10. SOURCE AND AMOUNT OF FUNDS
Assuming that the Company purchases 1,250,000 Shares pursuant to the Offer
at the maximum specified purchase price of $29.00 per Share, the Company
expects the maximum aggregate cost, including all fees and expenses applicable
to the Offer, to be approximately $300,000. The Company anticipates that the
funds necessary to pay such amounts will be provided by the Company's cash on
hand.
17
<PAGE>
11. CERTAIN INFORMATION ABOUT THE COMPANY
The Company is a Louisiana corporation with its principal executive offices
located at 5100 River Road, Avondale, Louisiana 70094. The Company is one of
the largest shipbuilders in the United States, specializing in the design,
construction, conversion, repair and modernization of various types of ocean-
going vessels for the military and commercial markets. A majority of
Avondale's contracts in recent years has been for the construction of U.S.
Navy surface ships, although it secured its largest ever commercial contract
in 1997 for the construction of two 125,000 Dead Weight Tons ("DWT") crude oil
carriers for the Jones Act Trade. Management believes the Company's low cost
structure, experienced and skilled work force, technological capabilities,
sophisticated construction processes and extensive experience in building a
variety of military and commercial vessels, position the Company as one of the
most cost-efficient and versatile shipbuilders in the United States. At
December 31, 1997, the Company's shipbuilding backlog (the "firm backlog") was
approximately $1.8 billion (including estimated contract escalation),
exclusive of unexercised options aggregating approximately $1.1 billion held
by the U.S. Navy (including estimated contract escalation) and approximately
$500 million held by a commercial customer for additional ship orders.
Historical Financial Information. The following table sets forth summary
historical consolidated financial information of the Company and its
subsidiaries. The historical financial information for 1996 and 1997 and for
the three-month periods ended March 31, 1997 and 1998 (other than the ratios
of earnings to fixed charges) has been derived from, and should be read in
conjunction with, the audited consolidated financial statements of the Company
and the related notes thereto as reported in the Company's Annual Reports on
Form 10-K for the years ended December 31, 1996 and December 31, 1997, and the
unaudited consolidated financial statements of the Company and the related
notes thereto as reported in the Company's Quarterly Report on Form 10-Q for
the period ended March 31, 1998. The summary historical financial information
should be read in conjunction with, and is qualified in its entirety by
reference to, the audited and unaudited financial statements and the related
notes thereto from which it has been derived.
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED ENDED MARCH 31,
DECEMBER 31, (UNAUDITED)
----------------- -----------------
1996 1997 1997 1998
-------- -------- -------- --------
(IN THOUSANDS, EXCEPT RATIOS AND
PER SHARE DATA)
<S> <C> <C> <C> <C>
Income Statement Data:
Net sales................................ $624,929 $613,993 $139,513 $184,625
Net income(1)............................ 30,795 26,833 6,291 7,377
Income per share of Common Stock--basic &
diluted................................. $ 2.13 $ 1.85 $ 0.43 $ 0.51
Ratio of earnings to fixed charges(2).... 6.15 8.08 7.55 8.92
Balance Sheet Data:
Working capital.......................... $119,475 $145,224 $127,123 $149,719
Total assets............................. 362,872 375,615 348,190 382,735
Long-term debt........................... 54,866 51,819 53,885 50,838
Shareholders' equity..................... 181,853 208,977 188,435 216,354
Book value per common share(3)........... 12.57 14.42 13.00 14.93
</TABLE>
- - - --------
(1) Net income for the year ended December 31, 1996 includes a deferred income
tax benefit of $9.0 million ($.62 per share--basic and diluted),
attributable to certain net operating loss carry forwards available to
offset estimated future taxable earnings.
(2) The ratio of earnings to fixed charges was computed by dividing the sum of
income before income taxes and fixed charges by fixed charges. Fixed
charges consist of interest expense, capitalized interest and amortized
financing costs.
(3) Book value per share was computed by dividing shareholders' equity by the
number of common Shares outstanding at the end of each period presented.
Pro Forma Financial Information. The following summary unaudited
consolidated pro forma financial information gives effect to the purchase of
Shares pursuant to the Offer, based on certain assumptions described
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<PAGE>
in the Notes to Summary Unaudited Consolidated Pro Forma Financial
Information. The summary gives effect to the purchase of Shares pursuant to
the Offer as if it had occurred on January 1, 1997 with respect to the pro
forma financial information for the year ended December 31, 1997 and on
January 1, 1998 with respect to the pro forma financial information for the
three months ended March 31, 1998. The pro forma financial information should
be read in conjunction with the historical consolidated financial information
incorporated herein by reference and does not purport to be indicative of the
results that would actually have been obtained, or that may be obtained in the
future, had the purchase of the Shares pursuant to the Offer been completed at
the dates indicated.
SUMMARY UNAUDITED CONSOLIDATED PRO FORMA FINANCIAL INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
DECEMBER 31, 1997 MARCH 31, 1998
----------------- -----------------
ASSUMED ASSUMED ASSUMED ASSUMED
$26.50 $29.00 $26.50 $29.00
PER PER PER PER
SHARE SHARE SHARE SHARE
PURCHASE PURCHASE PURCHASE PURCHASE
PRICE PRICE PRICE PRICE
-------- -------- -------- --------
(IN THOUSANDS, EXCEPT RATIOS AND
PER SHARE DATA)
<S> <C> <C> <C> <C>
Income Statement Data:
Net sales................................ $613,993 $613,993 $184,625 $184,625
Net income(2)............................ 25,754 25,670 6,953 6,931
Income per share of Common Stock--basic.. $ 1.94 $ 1.94 $ 0.53 $ 0.52
Income per share of Common Stock-diluted. $ 1.94 $ 1.93 $ 0.52 $ 0.52
Ratio of earnings to fixed charges(4).... 7.79 7.77 8.46 8.43
Balance Sheet Data:
Working capital.......................... $111,020 $107,811 $116,170 $113,023
Total assets............................. 341,411 338,202 349,186 346,039
Long-term debt........................... 51,819 51,819 50,838 50,838
Shareholders' equity..................... 174,773 171,564 182,805 179,658
Book value per common share(5)........... $ 13.20 $ 12.96 $ 13.80 $ 13.57
</TABLE>
- - - --------
(1) The information herein assumes 1,250,000 Shares were purchased at $26.50
per Share and $29.00 per Share price using available cash and cash
equivalents.
(2) Expenses directly related to the Offer are assumed to be $300,000.
(3) The information assumes that none of the Shares that may be acquired upon
exercise of outstanding stock options are purchased pursuant to the Offer.
(4) The ratio of earnings to fixed charges was computed by dividing the sum of
income before income taxes and fixed charges by fixed charges. Fixed
charges consist of interest expense, capitalized interest, and amortized
financing costs.
(5) Book value per share was computed by dividing shareholders' equity by the
number of Shares outstanding at the end of each period presented.
----------------
Additional Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports and other information with the Commission relating to its
business, financial condition and other matters. Information as of particular
dates concerning the Company's directors and officers, their remuneration,
options granted to them, the principal holders of the Company's securities and
any material interest of such persons in transactions with the Company is
required to be disclosed in proxy statements distributed to the Company's
shareholders and filed with the Commission. Such reports, proxy statements and
other information can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 2120,
Washington, D.C. 20549 and at its regional offices located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511, and 7 World Trade Center,
New York, New York 10048. Copies of such material may also be obtained by
mail, upon payment of the Commission's customary charges, from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington D.C. 20549. The Commission also maintains a Web site on the
World Wide Web at http://www.sec.gov that contains reports, proxy and
information statements and other information
19
<PAGE>
regarding registrants that file electronically with the Commission. Such
reports, proxy statements and other information concerning the Company also
can be inspected at the offices of Nasdaq at 1735 K Street, N.W., Washington,
D.C. 20006, on which the Shares are listed.
12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and is likely to reduce
the number of shareholders. Nonetheless, the Company believes that there will
still be a sufficient number of Shares outstanding and publicly traded
following the Offer to ensure a continued trading market in the Shares. Based
on the published guidelines of the Nasdaq National Market, the Company
believes that following its purchase of Shares pursuant to the Offer, the
Company's remaining Shares will continue to qualify to be quoted on the Nasdaq
National Market.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. The Company believes that,
following the purchase of Shares pursuant to the Offer, the Shares will
continue to be "margin securities" for purposes of the Federal Reserve Board's
margin regulations.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its shareholders
and to the Commission and comply with the Commission's proxy rules in
connection with meetings of the Company's shareholders. The Company believes
that its purchase of Shares pursuant to the Offer will not result in the
Shares becoming eligible for deregistration under the Exchange Act.
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
The Company is not aware of any license or regulatory permit material to its
business that might be adversely affected by its acquisition of Shares as
contemplated in the Offer or of any approval or other action by any government
or governmental, administrative or regulatory authority or agency, domestic or
foreign, that would be required for the Company's acquisition or ownership of
Shares as contemplated by the Offer. Should any such approval or other action
be required, the Company currently contemplates that it will seek such
approval or other action. The Company cannot predict whether it may determine
that it is required to delay the acceptance for payment of, or payment for,
Shares tendered pursuant to the Offer pending the outcome of any such matter.
There can be no assurance that any such approval or other action, if needed,
would be obtained or would be obtained without substantial conditions or that
the failure to obtain any such approval or other action might not result in
adverse consequences to the Company's business. The Company's obligations
under the Offer to accept for payment and pay for Shares are subject to
certain conditions. See Section 6.
14. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following summary describes certain United States federal income tax
consequences relevant to the Offer. The discussion contained in this summary
is based upon the Internal Revenue Code of 1986, as amended to the date hereof
(the "Code"), existing and proposed Treasury regulations promulgated
thereunder, rulings, administrative pronouncements and judicial decisions,
changes to which could materially affect the tax consequences described herein
and could be made on a retroactive basis.
This summary discusses only Shares held as capital assets, within the
meaning of Section 1221 of the Code, and does not address all of the tax
consequences that may be relevant to particular shareholders in light of their
personal circumstances, or to certain types of shareholders (such as certain
financial institutions, dealers in securities or commodities, insurance
companies, tax-exempt organizations or persons who hold Shares as a position
in a "straddle" or as a part of a "hedging" or "conversion" transaction for
United States federal income tax purposes). In particular, the discussion of
the consequences of an exchange of Shares for cash pursuant to the Offer
applies only to a United States Holder. For purposes of this summary, a
"United States Holder" is a holder of Shares that is, for United States
federal income tax purposes, (a) a citizen or resident of the United States,
(b) a corporation, partnership or other entity created or organized in or
under the laws of the United States, any state or any political subdivision
thereof, (c) an estate or trust described in Section 7701(a)(30)
20
<PAGE>
of the Code or (d) a person whose worldwide income or gain is subject to
United States federal income taxation on a net income basis. This discussion
does not address the tax consequences to foreign shareholders who will be
subject to United States federal income tax on a net basis on the proceeds of
their exchange of Shares pursuant to the Offer because such income is
effectively connected with the conduct of a trade or business within the
United States. Such shareholders are generally taxed in a manner similar to
United States Holders; however, certain special rules apply. Foreign
shareholders who are not subject to United States federal income tax on a net
basis should see Section 3 for a discussion of the applicable United States
withholding rules and the potential for obtaining a refund of all or a portion
of the tax withheld. The summary may not be applicable with respect to Shares
acquired as compensation (including Shares acquired upon the exercise of
options or which were or are subject to forfeiture restrictions). The summary
also does not address the state, local or foreign tax consequences of
participating in the Offer. Each shareholder should consult such shareholder's
tax advisor as to the particular consequences of participation in the Offer.
United States Holders Who Receive Cash Pursuant to the Offer. An exchange of
Shares for cash pursuant to the Offer by a United States Holder will be a
taxable transaction for United States federal income tax purposes. As a
consequence of the exchange, a United States Holder will, depending on such
holder's particular circumstances, be treated either as having sold such
holder's Shares or as having received a dividend distribution from the
Company, with the tax consequences described below.
Under Section 302 of the Code, a United States Holder whose Shares are
exchanged for cash pursuant to the Exchange will be treated as having sold
such holder's Shares, and thus will recognize gain or loss if the exchange (a)
results in a "complete termination" of such holder's equity interest in the
Company, (b) is "substantially disproportionate" with respect to such holder
or (c) is "not essentially equivalent to a dividend" with respect to the
holder, each as discussed below. In applying these tests, a United States
Holder will be treated as owning Shares actually or constructively owned by
certain related individuals and entities.
If a United States Holder sells Shares to persons other than the Company at
or about the time such holder also sells Shares to the Company pursuant to the
Offer, and the various sales effected by the holder are part of an overall
plan to reduce or terminate such holder's proportionate interest in the
Company, then the sales to persons other than the Company may, for United
States federal income tax purposes, be integrated with the holder's sale of
Shares pursuant to the Offer and, if integrated, should be taken into account
in determining whether the holder satisfies any of the three tests described
below.
The receipt of cash by a United States Holder will be in "complete
redemption" of such holder's equity interest in the Company if either (a) such
holder exchanges all Shares actually and constructively owned by such holder
for cash pursuant to the Offer or (b) all of the Shares of the Company
actually owned by such holder are sold pursuant to the Offer, the holder is
eligible to waive, and effectively waives, the attribution of Shares of the
Company constructively owned by the holder in accordance with the procedures
described in Section 302(c)(2) of the Code, the holder does not have any other
interest (including an interest as an officer or employee) in the Company
(other than as a creditor), and the holder does not acquire such interest
within 10 years from the date of the sale of the Shares, other than Shares
acquired by bequest or inheritance. The waiver of constructive ownership as
described above is permitted only in the case of constructive ownership of
Shares held by family members.
An exchange of Shares for cash will be "substantially disproportionate" with
respect to a United States Holder if the percentage of the then outstanding
Shares actually and constructively owned by such holder immediately after the
exchange is less than 80% of the percentage of the Shares actually and
constructively owned by such holder immediately before the exchange.
A United States Holder will satisfy the "not essentially equivalent to a
dividend" test if the reduction in such holder's proportionate interest in the
Company constitutes a "meaningful reduction" given such holder's particular
facts and circumstances. The United States Internal Revenue Service has
indicated in published rulings that any reduction in the percentage interest
of a shareholder whose relative stock interest in a publicly held
21
<PAGE>
corporation is minimal (an interest of less than 1% should satisfy this
requirement) and who exercises no control over corporate affairs should
constitute such a "meaningful reduction."
If a United States Holder is treated as having sold such holder's Shares
under the tests described above, such holder will recognize gain or loss equal
to the difference between the amount of cash received and such holder's tax
basis in the Shares exchanged therefor. Any such gain or loss will be capital
gain or loss and will be long-term capital gain or loss if the holding period
of the Shares exceeds one year as of the date of the exchange. Furthermore,
any such long-term capital gain may qualify for a reduced rate of tax if the
holding period of the Shares exceeds eighteen months as of the date of the
exchange.
If a United States Holder who exchanges Shares pursuant to the Offer is not
treated under Section 302 as having sold such holder's Shares for cash, the
entire amount of cash received by such holder will be treated as a dividend to
the extent of the Company's current and accumulated earnings and profits,
which the Company anticipates will be sufficient to cover the amount of any
such dividend and will be includible in the holder's gross income as ordinary
income in its entirety, without reduction for the tax basis of the Shares
exchanged. No loss will be recognized. The United States Holder's tax basis in
the Shares exchanged generally will be added to such holder's tax basis in
such holder's remaining Shares. To the extent that cash received in exchange
for Shares is treated as a dividend to a corporate United States Holder, such
holder will be (i) eligible for a dividends-received deduction (subject to
applicable limitations) and (ii) subject to the "extraordinary dividend"
provisions of the Code. To the extent, if any, that the cash received by a
United States Holder exceeds the Company's current and accumulated earnings
and profits, it will be treated first as a tax-free return of such holder's
tax basis in the Shares and thereafter as capital gain.
The Company cannot predict whether or to what extent the Offer will be
oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant
to the Offer will cause the Company to accept fewer Shares than are tendered.
Therefore, a holder can be given no assurance that a sufficient number of such
holder's Shares will be exchanged pursuant to the Offer to ensure that such
exchange will be treated as a sale, rather than as a dividend, for United
States federal income tax purposes pursuant to the rules discussed above.
Shareholders Who Do Not Receive Cash Pursuant to the Offer. Shareholders
whose Shares are not exchanged pursuant to the Offer will not incur any tax
liability as a result of the consummation of the Offer.
See Section 3 with respect to the application of United States federal
income tax withholding to payments made to foreign shareholders and backup
withholding.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY.
EACH SHAREHOLDER IS URGED TO CONSULT SUCH HOLDER'S OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE OFFER,
INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
15. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company
to have occurred, to extend the period of time during which the Offer is open
and thereby delay acceptance for payment of, and payment for, any Shares by
giving oral or written notice of such extension to the Depositary and making a
public announcement thereof. The Company also expressly reserves the right, in
its sole discretion, to terminate the Offer and not accept for payment or pay
for any Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the occurrence of any of
the conditions specified in Section 6 hereof by giving oral or written notice
of such termination or postponement to the Depositary and making a public
announcement thereof. Additionally, in certain circumstances, if the Company
waives any of the conditions of the Offer set forth in Section 6, it may be
required to extend the Expiration Date of the Offer. The Company's reservation
of the right to delay payment for Shares
22
<PAGE>
that it has accepted for payment is limited by Rule 13e-4(f)(5) promulgated
under the Exchange Act, which requires that the Company must pay the
consideration offered or return the Shares tendered promptly after termination
or withdrawal of a tender offer. Subject to compliance with applicable law,
the Company further reserves the right, in its sole discretion, and regardless
of whether any of the events set forth in Section 6 shall have occurred or
shall be deemed by the Company to have occurred, to amend the Offer in any
respect (including, without limitation, by decreasing or increasing the
consideration offered in the Offer to holders of Shares or by decreasing or
increasing the number of Shares being sought in the Offer). Amendments to the
Offer may be made at any time and from time to time effected by public
announcement thereof, such announcement, in the case of an extension, to be
issued no later than 9:00 A.M., New York City time, on the next business day
after the last previously scheduled or announced Expiration Date. Any public
announcement made pursuant to the Offer will be disseminated promptly to
shareholders in a manner reasonably calculated to inform shareholders of such
change. Without limiting the manner in which the Company may choose to make
any public announcement, except as provided by applicable law (including Rule
13e-4(e)(2) promulgated under the Exchange Act), the Company shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service.
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Company will extend the Offer to the extent required by Rules 13e-
4(d)(2) and 13e-4(e)(2) promulgated under the Exchange Act, which require that
the minimum period during which an offer must remain open following material
changes in the terms of the offer or information concerning the offer (other
than a change in price or a change in percentage of securities sought) will
depend upon the facts and circumstances, including the relative materiality of
such terms or information. If (i) the Company increases the price to be paid
for Shares above $29.00 or decreases the price to be paid for Shares below
$26.50, the Company increases or decreases the Dealer Manager's fee, the
Company increases the number of Shares being sought and such increase in the
number of Shares being sought exceeds 2% of the outstanding Shares, or the
Company decreases the number of Shares being sought, and (ii) the Offer is
scheduled to expire at any time earlier than the expiration of a period ending
on the tenth business day from, and including, the date that notice of such
increase or decrease is first published, sent or given, the Offer will be
extended until the expiration of such period of ten business days.
16. FEES AND EXPENSES
The Company has retained Salomon Smith Barney to act as the Dealer Manager
in connection with the Offer. Salomon Smith Barney will receive a fee of $.10
per Share purchased by the Company pursuant to the Offer for its services as
Dealer Manager. The Company also has agreed to reimburse the Dealer Manager
for certain expenses incurred in connection with the Offer, including out-of-
pocket expenses and reasonable attorneys' fees and disbursements, and to
indemnify the Dealer Manager against certain liabilities in connection with
the Offer, including certain liabilities under the federal securities laws.
Salomon Smith Barney has rendered various investment banking and other
advisory services to the Company in the past, for which it has received
customary compensation, and can be expected to render similar services to the
Company in the future. The Company also has retained Georgeson & Company, Inc.
as Information Agent and ChaseMellon Shareholder Services, L.L.C. as
Depositary in connection with the Offer. The Information Agent and the
Depositary will receive reasonable and customary compensation for their
services. The Company will also reimburse the Information Agent and the
Depositary for out-of-pocket expenses, including reasonable attorneys' fees,
and has agreed to indemnify the Information Agent and the Depositary against
certain liabilities in connection with the Offer, including certain
liabilities under the federal securities laws. The Dealer Manager and
Information Agent may contact shareholders by mail, telephone, telex,
telegraph and personal interviews, and may request brokers, dealers and other
nominee shareholders to forward materials relating to the Offer to beneficial
owners. Neither the Information Agent nor the Depositary has been retained to
make solicitations or recommendations in connection with the Offer.
The Company will not pay fees or commissions to any broker, dealer,
commercial bank, trust company or other person (other than the Dealer Manager)
for soliciting any Shares pursuant to the Offer. The Company will,
23
<PAGE>
however, on request, reimburse such persons for customary handling and mailing
expenses incurred in forwarding materials in respect of the Offer to the
beneficial owners for which they act as nominees. No such broker, dealer,
commercial bank or trust company has been authorized to act as the Company's
agent for purposes of the Offer. The Company will pay (or cause to be paid)
any stock transfer taxes on its purchase of Shares, except as otherwise
provided in Instruction 7 of the Letter of Transmittal.
The Company estimates that the total amount of the fees and expenses that it
will incur in connection with the Offer will be approximately $300,000.
Salomon Smith Barney is a service mark of Smith Barney Inc. Salomon Brothers
Inc and Smith Barney Inc. are affiliated but separately registered
broker/dealers under common control of Salomon Smith Barney Holdings Inc.
Salomon Brothers Inc and Salomon Smith Barney Holdings Inc have been licensed
to use the Salomon Smith Barney service mark.
17. MISCELLANEOUS
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company will make a good faith effort to comply with such
law. If, after such good faith effort, the Company cannot comply with such
law, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Shares residing in such jurisdiction. In any
jurisdiction the securities or blue sky laws of which require the Offer to be
made by a licensed broker or dealer, the Offer is being made on the Company's
behalf by the Dealer Manager or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
Pursuant to Rule 13e-4 promulgated under the Exchange Act, the Company has
filed with the Commission an Issuer Tender Offer Statement on Schedule 13E-4
(the "Schedule 13E-4") which contains additional information with respect to
the Offer. The Schedule 13E-4, including the exhibits and any amendments
thereto, may be examined, and copies may be obtained, at the same places and
in the same manner as is set forth in Section 11 with respect to information
concerning the Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY OR THE DEALER MANAGER IN CONNECTION
WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE
RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR THE DEALER MANAGER.
May 6, 1998 AVONDALE INDUSTRIES, INC.
24
<PAGE>
SCHEDULE I
CERTAIN TRANSACTIONS INVOLVING SHARES
Except as set forth below, based upon the Company's records and upon
information provided to the Company by its directors, executive officers,
associates and subsidiaries, neither the Company nor any of its associates or
subsidiaries or persons controlling the Company nor, to the best of the
Company's knowledge, any of the directors or executive officers of the Company
or any of its subsidiaries, nor any associates or subsidiary of any of the
foregoing, has effected any transactions in the Shares during the 40 business
days prior to May 6, 1998.
1. On April 2, 1998, the ESOP distributed 24,129 Shares to plan participants
due to their retirement.
2. On April 21, 1998, the ESOP distributed 2,794 Shares to plan participants
due to their retirement.
S-1
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal and certificates for the Shares and any
other required documents should be sent or delivered by each shareholder or
such shareholder's broker, dealer, commercial bank, trust company or other
nominee to the Depositary at its address set forth below:
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Delivery Addresses
By Mail By Facsimile: By Hand:
(First Class Only): (201) 329-8936 120 Broadway
P.O. Box 3301 13th Floor
South Hackensack, NJ 07606 New York, NY 10271
Facsimile confirmation number
(for eligible institutions only):
(201) 296-4860
By Overnight Delivery:
85 Challenger Road
Mail Drop Reorg
Ridgefield Park, NJ 07660
Attn: Reorganization Dept.
----------------
Any questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at the telephone number and
address below. Shareholders may also contact their broker, dealer, commercial
bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
LOGO
Georgeson & Company Inc.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064
The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
390 Greenwich Street
New York, New York 10013
(800) 996-7920
S-2
<PAGE>
EXHIBIT 9(A)(2)
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
AVONDALE INDUSTRIES, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED MAY 6, 1998
- - - -------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JUNE 3, 1998, UNLESS THE OFFER IS
EXTENDED BY THE COMPANY.
- - - -------------------------------------------------------------------------------
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail By Overnight Delivery: By Hand:
(First Class Only): 85 Challenger Road 120 Broadway, 13th Floor
P.O. Box 3301 Mail Drop--Reorg New York, NY 10271
South Hackensack, NJ Ridgefield Park, NJ 07660 Attn: Reorganization
07606 Attn: Reorganization Department Department
Attn: Reorganization
Department
By Facsimile Transmission:
(For Eligible Institutions Only)
(201) 329-8936
Confirm Receipt of Notice of Guaranteed Delivery Only:
(201) 296-4860
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY. DELIVERIES TO THE COMPANY WILL NOT BE
FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT CONSTITUTE VALID DELIVERY.
DELIVERIES TO BOOK-ENTRY TRANSFER FACILITIES WILL NOT CONSTITUTE VALID
DELIVERY TO THE DEPOSITARY.
This Letter of Transmittal is to be used only if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made
by book-entry transfer to the Depositary's account at The Depository Trust
Company ("DTC") pursuant to the procedures set forth in Section 3 of the Offer
to Purchase (as defined below).
Shareholders who cannot deliver their Share certificates and any other
required documents to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) must tender their Shares using the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2.
1
<PAGE>
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
<TABLE>
<CAPTION>
NAME(S) AND
ADDRESS(ES) OF
REGISTERED
HOLDER(S)
(PLEASE FILL
IN,
IF BLANK,
EXACTLY AS
NAME(S) SHARES TENDERED
APPEAR(S) ON (ATTACH ADDITIONAL SIGNED LIST IF
CERTIFICATE(S)) NECESSARY)
- - - --------------------------------------------------------
TOTAL NUMBER
SHARE OF SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)(1) CERTIFICATE(S) TENDERED(2)
<S> <C> <C> <C>
--------
--------
--------
--------
--------
--------
Total Shares...........................
- - - --------------------------------------------------------
</TABLE>
Indicate in this box the order (by certificate number) in which Shares are
to be purchased in the event of proration. (3) (Attach additional signed
list if necessary.) See Instruction 15.
1st: 2nd: 3rd: 4th: 5th:
(1) Need not be completed by shareholders tendering Shares by book-entry
transfer.
(2) Unless otherwise indicated, it will be assumed that all Shares represented
by each Share certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
(3) If you do not designate an order, then in the event less than all Shares
tendered are purchased due to proration, Shares will be selected for
purchase by the Depositary. See Instruction 15.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE INSTRUCTIONS SET
FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
[_] Check here if you cannot locate your certificates and require assistance in
replacing them. Upon receipt of this Letter of Transmittal, the Depositary
will contact you directly with replacement instructions.
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
[_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT THE DTC AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:_______________________________________________
Account No.:_________________________________________________________________
Transaction Code No.:________________________________________________________
[_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s):_____________________________________________
Date of Execution of Notice of Guaranteed Delivery:__________________________
Name of Institution that Guaranteed Delivery:________________________________
If delivery is by book-entry transfer:
Name of Tendering Institution:_______________________________________________
Account No.:_________________________________________________________________
Transaction Code No.:________________________________________________________
2
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Avondale Industries, Inc., a Louisiana
corporation (the "Company"), the above-described shares of its common stock,
par value $1.00 per share (the "Shares"), at the price per share indicated in
this Letter of Transmittal, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated May 6,
1998 (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").
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with 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 undersigned
hereby sells, assigns and transfers to, or upon the order of, the Company all
right, title and interest in and to all the Shares that are being tendered
hereby or orders the registration of such Shares tendered by book-entry
transfer that are purchased pursuant to the Offer to or upon the order of the
Company and hereby irrevocably constitutes and appoints the Depositary as the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares, 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 transfer ownership of such
Shares on the account books maintained by the DTC, together with all
accompanying evidences of transfer and authenticity, to or upon the order
of the Company upon receipt by the Depositary, as the undersigned's agent,
of the Purchase Price (as defined below) with respect to such Shares;
(ii) present certificates for such Shares for cancellation and transfer
on the books of the Company; and
(iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of
the Offer.
The undersigned hereby represents and warrants to the Company that the
undersigned has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby and that, when and to the extent the same are
accepted for payment by the Company, the Company will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the same will not be subject to
any adverse claims. The undersigned will, upon request, execute and deliver
any additional documents deemed by the Depositary or the Company to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby.
The undersigned represents and warrants to the Company that the undersigned
has read and agrees to all of the terms of the Offer. All authority herein
conferred or agreed to be conferred shall not be affected by and shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned. Except as stated
in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
Instructions will constitute the undersigned's acceptance of the terms and
conditions of the Offer, including the undersigned's representation and
warranty to the Company that (i) the undersigned has a net long position in
the Shares or equivalent securities being tendered within the meaning of Rule
14e-4 promulgated under the Securities Exchange Act of 1934, as amended, and
(ii) the tender of such Shares complies with Rule 14e-4. The Company's
acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the undersigned and the Company upon
the terms and subject to the conditions of the Offer.
The names and addresses of the registered holders should be printed, if they
are not already printed above, exactly as they appear on the certificates
representing Shares tendered hereby. The certificate numbers, the number of
Shares represented by such certificates, the number of Shares that the
undersigned wishes to tender and the purchase price at which such Shares are
being tendered should be indicated in the appropriate boxes on this Letter of
Transmittal.
The undersigned understands that the Company will determine a single per
share price (not greater than $29.00 nor less than $26.50 per Share), net to
the Seller in cash, that it will pay for Shares validly tendered and not
withdrawn pursuant to the Offer (the "Purchase Price"), taking into account
the number of Shares so tendered and the prices specified by tendering
shareholders. The undersigned understands that the Company will select the
lowest Purchase Price that will allow it to purchase 1,250,000 Shares (or such
lesser number of Shares as are validly tendered at prices not greater than
$29.00 nor less than $26.50 per Share) validly tendered and not withdrawn
pursuant to the Offer. The undersigned understands that all Shares validly
tendered at prices at or below the Purchase Price and not withdrawn will be
purchased at the Purchase Price, net to the seller in cash, upon the terms and
subject to the conditions of the Offer, including the proration provisions,
and that the Company will return all other Shares, including Shares tendered
at prices greater than the Purchase Price and not withdrawn and Shares not
purchased because of proration.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may
postpone the acceptance for payment of, or the payment for, Shares tendered or
may not be required to purchase any of the Shares tendered hereby or may
accept for payment fewer than all of the Shares tendered hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price of any Shares purchased, and/or return
any Shares not tendered or not purchased, in the name(s) of the undersigned
(and, in the case of Shares tendered by book-entry transfer, by credit to the
account at the applicable Book-Entry Transfer Facility). Similarly, unless
otherwise
3
<PAGE>
indicated under "Special Delivery Instructions," please mail the check for the
Purchase Price of any Shares purchased and/or any certificates for Shares not
tendered or not purchased (and accompanying documents, as appropriate) to the
undersigned at the address shown below the undersigned's signature(s). In the
event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for the Purchase Price of
any Shares purchased and/or return any Shares not tendered or not purchased in
the name(s) of, and mail such check and/or any certificates to, the person(s)
so indicated. The undersigned recognizes that the Company has no obligation,
pursuant to the "Special Payment Instructions," to transfer any Shares from
the name of the registered holder(s) thereof if the Company does not accept
for payment any of the Shares so tendered.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
4
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
---------------
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, A SEPARATE LETTER OF
TRANSMITTAL FOR EACH PRICE SPECIFIED MUST BE USED.
---------------
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR
IF NO BOX IS CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND
INSTRUCTIONS BELOW), THERE IS NO VALID TENDER OF SHARES.
---------------
<TABLE>
<S> <C> <C> <C> <C> <C>
[_] $26.500 [_] $26.625 [_] $26.750 [_] $26.875 [_] $27.000 [_] $27.125
[_] $27.250 [_] $27.375 [_] $27.500 [_] $27.625 [_] $27.750 [_] $27.875
[_] $28.000 [_] $28.125 [_] $28.250 [_] $28.375 [_] $28.500 [_] $28.625
[_] $28.750 [_] $28.875 [_] $29.000
</TABLE>
ODD LOTS
(SEE INSTRUCTION 9)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person who owned beneficially, as of the close of business on May
5, 1998, and who continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
[_] owned beneficially, as of the close of business on May 5, 1998, and
continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares, all of which are being tendered, or
[_] is a broker, dealer, commercial bank, trust company or other nominee that
(i) is tendering, for the beneficial owners thereof, Shares with respect
to which it is the record owner, and (ii) believes, based upon
representations made to it by each such beneficial owner, that such
beneficial owner owned beneficially as of the close of business on May 5,
1998, and continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares and is tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box, in
which case you will be deemed to have tendered at the Purchase Price
determined by the Company in accordance with the terms of the Offer (persons
checking this box need not indicate the price per share in the box entitled
"Price (In Dollars) Per Share At Which Shares Are Being Tendered" in this
Letter of Transmittal). See Instruction 5. [_]
5
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 6, 7 and 8)
(See Instructions 6 and 8)
To be completed ONLY if the check To be completed ONLY if the check
for the aggregate Purchase Price for the Purchase Price of Shares
of Shares purchased and/or purchased and/or certificates for
certificates for Shares not Shares not tendered or not
tendered or not purchased are to purchased are to be mailed to
be issued in the name of someone someone other than the undersigned
other than the undersigned. or to the undersigned at an
address other than that shown
below the undersigned's
signature(s).
Issue: [_] check and/or [_]
certificates to:
Name_______________________________
(Please Print)
MAIL: [_] check and/or [_]
certificates to:
Address____________________________
----------------------------------- Name_______________________________
(Include Zip Code) (Please Print)
----------------------------------- Address____________________________
(Tax Id. or Social Security No.)
(See Substitute Form W-9) -----------------------------------
(Include Zip Code)
[_Credit]Shares tendered by book-
entry transfer that are not -----------------------------------
accepted for payment to DTC: (Tax Id. or Social Security No.)
----------------------------------- (See Substitute Form W-9)
(Account No.)
6
<PAGE>
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL SHAREHOLDERS)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Signature(s) of Owner(s)
Dated:_________________________________________________________________, 1998
Names:_______________________________________________________________________
(Please Print)
Capacity:____________________________________________________________________
Address:_____________________________________________________________________
(Include Zip Code)
Area Code and Telephone No.:_________________________________________________
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please provide full
title and see Instruction 6.)
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 6)
Name of Firm:________________________________________________________________
Authorized Signature:________________________________________________________
Name:________________________________________________________________________
(Please Print)
Title:_______________________________________________________________________
Address:_____________________________________________________________________
(Include Zip Code)
Area Code and Telephone No.:_________________________________________________
Dated: ________________________________________________________________, 1998
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is
an Eligible Institution (as defined in the Offer to Purchase) unless (i) this
Letter of Transmittal is signed by the registered holder(s) of the Shares
(which term, for purposes of this document, shall include any participant in a
Book-Entry Transfer Facility whose name appears on a security position listing
as the owner of Shares) tendered herewith and such holder(s) have not
completed the box entitled "Special Payment Instructions" or the box entitled
"Special Delivery Instructions" on this Letter of Transmittal, or (ii) such
Shares are tendered for the account of an Eligible Institution. See
Instruction 6.
2. Delivery of Letter of Transmittal and Share Certificates; Guaranteed
Delivery Procedures. This Letter of Transmittal is to be used either if share
certificates are to be forwarded herewith or if delivery of Shares is to be
made by book-entry transfer pursuant to the procedures set forth in Section 3
of the Offer to Purchase. Certificates for all physically delivered Shares, or
a confirmation of a book-entry transfer into the Depositary's account at the
DTC of all Shares delivered electronically, as well as a properly completed
and duly executed Letter of Transmittal (or manually signed facsimile thereof)
and any other documents required by this Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on the front page
of this Letter of Transmittal prior to the Expiration Date. If certificates
are forwarded to the Depositary in multiple deliveries, a properly completed
and duly executed Letter of Transmittal must accompany each such delivery.
Shareholders whose share certificates are not immediately available, who
cannot deliver their Shares and all other required documents to the Depositary
or who cannot complete the procedure for delivery by book-entry transfer prior
to the Expiration Date may tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant
to such procedure: (i) such tender must be made by or through an Eligible
Institution, (ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Company (with any required
signature guarantees) must be received by the Depositary prior to the
Expiration Date and (iii) the certificates for all physically delivered Shares
in proper form for transfer by delivery, or a confirmation of a book-entry
transfer into the Depositary's account at the DTC of all Shares delivered
electronically, in each case together with a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile thereof) and any
other documents required by this Letter of Transmittal, must be received by
the Depositary within three Nasdaq National Market trading days after the date
the Depositary receives such Notice of Guaranteed Delivery, all as provided in
Section 3 of the Offer to Purchase.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING SHAREHOLDER, 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.
No alternative or contingent tenders will be accepted. By executing this
Letter of Transmittal (or facsimile thereof), the tendering shareholder waives
any right to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule and attached to this Letter of Transmittal.
4. Partial Tenders (Not Applicable to Shareholders Who Tender by Book-Entry
Transfer). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box entitled "Number of Shares Tendered." In
such case, a new certificate for the remainder of the Shares represented by
the old certificate will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the "Special Payment Instructions"
or "Special Delivery Instructions" boxes on this Letter of Transmittal, as
promptly as practicable following the expiration or termination of the Offer.
All Shares represented by certificates delivered to the Depositary will be
deemed to have been tendered unless otherwise indicated.
5. Indication of Price at Which Shares Are Being Tendered. For Shares to be
validly tendered, the shareholder must check the box indicating the price per
share at which such shareholder is tendering Shares under "Price (In Dollars)
Per Share At Which Shares Are Being Tendered" in this Letter of Transmittal,
except that Odd Lot Owners (as defined in Section 2 of the Offer to Purchase)
may check the box above in the section entitled "Odd Lots" indicating that
such shareholder is tendering all Shares at the Purchase Price determined by
the Company. ONLY ONE BOX MAY BE CHECKED. IF MORE THAN ONE BOX IS CHECKED, OR
(OTHER THAN AS DESCRIBED ABOVE FOR ODD LOT OWNERS) IF NO BOX IS CHECKED, THERE
IS NO VALID TENDER OF SHARES. A shareholder wishing to tender portions of such
shareholder's Share holdings at different prices must complete a separate
Letter of Transmittal for each price at which such shareholder wishes to
tender each such portion of such shareholder's Shares. The same Shares cannot
be tendered (unless previously validly withdrawn as provided in Section 4 of
the Offer to Purchase) at more than one price.
6. Signatures On Letter Of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signatures(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any change
whatsoever.
8
<PAGE>
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or facsimiles thereof) as there are
different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the Purchase Price is to be made to, or
Shares not tendered or not purchased are to be registered in the name of, any
person other than the registered holder(s), in which case the certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such certificates. Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates evidencing
the Shares tendered hereby must be endorsed or accompanied by appropriate
stock powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on such certificate(s). Signature(s) on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
See Instruction 1.
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 Company of the authority of such person so to act must be submitted.
7. Stock Transfer Taxes. The Company will pay or cause to be paid any stock
transfer taxes with respect to the sale and transfer of any Shares to it or
its order pursuant to the Offer. If, however, payment of the aggregate
Purchase Price is to be made to, or Shares not tendered or not purchased are
to be registered in the name of, any person other than the registered
holder(s), or if tendered Shares are registered in the name of any person
other than the person(s) signing this Letter of Transmittal, the amount of any
stock transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such person will be
deducted from the Purchase Price unless satisfactory evidence of the payment
of such taxes, or exemption therefrom, is submitted. See Section 5 of the
Offer to Purchase. Except as provided in this Instruction 7, it will not be
necessary to affix transfer tax stamps to the certificates representing Shares
tendered hereby.
8. Special Payment and Delivery Instructions. If a check for the Purchase
Price of any Shares tendered hereby is to be issued in the name of, and/or any
Shares not tendered or not purchased are to be returned to, a person other
than the person(s) signing this Letter of Transmittal, or if the check and/or
any certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to an
address other than that shown above in the box captioned "Description of
Shares Tendered," then the boxes captioned "Special Payment Instructions"
and/or "Special Delivery Instructions" on this Letter of Transmittal should be
completed.
Shareholders tendering Shares by book-entry transfer will have any Shares
not accepted for payment returned by crediting the account maintained by such
shareholder at the Book-Entry Transfer Facility from which such transfer was
made.
9. Odd Lots. As described in Section 1 of the Offer to Purchase, if fewer
than all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date are to be purchased, the Shares
purchased first will consist of all Shares tendered by any shareholder who
owned beneficially, as of the close of business on February 13, 1998, and
continues to own beneficially as of the Expiration Date, an aggregate of fewer
than 100 Shares and who validly tendered all such Shares at or below the
Purchase Price (including by not designating a Purchase Price as described
below). Partial tenders of Shares will not qualify for this preference and
this preference will not be available unless the box captioned "Odd Lots" in
this Letter of Transmittal and the Notice of Guaranteed Delivery, if any, is
completed.
Additionally, tendering holders of Odd Lots who do not wish to specify a
purchase price may check the box above in the section entitled "Odd Lots"
indicating that such shareholder is tendering all Shares at the Purchase Price
determined by the Company. See Instruction 5.
10. Substitute Form W-9 and Form W-8. Under the United States federal income
tax backup withholding rules, unless an exemption applies under the applicable
law and regulations, 31% of the gross proceeds payable to a shareholder or
other payee pursuant to the Offer must be withheld and remitted to the United
States Treasury, unless the shareholder or other payee provides such person's
taxpayer identification number (employer identification number or social
security number) to the Depositary and certifies that such number is correct.
Therefore, each tendering shareholder should complete and sign the Substitute
Form W-9 included as part of the Letter of Transmittal so as to provide the
information and certification necessary to avoid backup withholding, unless
such shareholder otherwise establishes to the satisfaction of the Depositary
that it is not subject to backup withholding. Certain shareholders (including,
among others, all corporations and certain foreign shareholders (in addition
to foreign corporations)) are not subject to these backup withholding and
reporting requirements. In order for a foreign shareholder to qualify as an
exempt recipient, that shareholder must submit an IRS Form W-8 or a Substitute
Form W-8, signed under penalties of perjury, attesting to that shareholder's
exempt status. Such statements may be obtained from the Depositary.
11. Withholding On Foreign Shareholders. Even if a foreign shareholder has
provided the required certification to avoid backup withholding, the
Depositary will withhold United States federal income taxes equal to 30% of
the gross payments payable to a foreign shareholder or his or her agent unless
the Depositary determines that an exemption from or a reduced rate of
9
<PAGE>
withholding is available pursuant to a tax treaty or that an exemption from
withholding is applicable because such gross proceeds are effectively
connected with the conduct of a trade or business in the United States. For
this purpose, a foreign shareholder is a shareholder that is not (i) a citizen
or resident of the United States, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States, any
state or any political subdivision thereof, (iii) an estate or trust described
in Section 7701(a)(30) of the Code or (iv) a person whose worldwide income or
gain is subject to United States federal income taxation on a net income
basis. In order to obtain a reduced rate of withholding pursuant to a tax
treaty, a foreign shareholder must deliver to the Depositary a properly
completed IRS Form 1001. In order to obtain an exemption from withholding on
the ground that the gross proceeds paid pursuant to the Offer are effectively
connected with the conduct of a trade or business within the United States, a
foreign shareholder must deliver to the Depositary a properly completed IRS
Form 4224. The Depositary will determine a shareholder's status as a foreign
shareholder and eligibility for a reduced rate of, or an exemption from,
withholding by reference to outstanding certificates or statements concerning
eligibility for a reduced rate of, or exemption from, withholding (e.g., IRS
Form 1001 or IRS Form 4224) unless facts and circumstances indicate that such
reliance is not warranted. A foreign shareholder may be eligible to obtain a
refund of all or a portion of any tax withheld if such shareholder meets the
"complete redemption," "substantially disproportionate" or "not essentially
equivalent to a dividend" test described in Section 14 of the Offer to
Purchase or is otherwise able to establish that no tax or a reduced amount of
tax is due. Backup withholding generally will not apply to amounts subject to
the 30% or treaty-reduced rate of withholding. Foreign shareholders are urged
to consult their tax advisors regarding the application of United States
federal income tax withholding, including eligibility for a withholding tax
reduction or exemption and refund procedures.
12. Requests for Assistance or Additional Copies. Any questions or requests
for assistance may be directed to the Information Agent or the Dealer Manager
at its respective telephone number and address listed at the end of this
Letter of Transmittal. Requests for additional copies of the Offer to
Purchase, this Letter of Transmittal or other tender offer materials may be
directed to the Information Agent or the Dealer Manager, and such copies will
be furnished promptly at the Company's expense. Shareholders may also contact
their local broker, dealer, commercial bank or trust company for documents
relating to, or assistance concerning, the Offer.
13. Irregularities. All questions as to the number of Shares to be accepted,
the price to be paid therefor and the validity, form, eligibility (including
time of receipt) and acceptance for payment of any tender of Shares will be
determined by the Company, in its sole discretion, which determination shall
be final and binding on all parties. The Company reserves the absolute right
to reject any or all tenders that it determines to be in improper form or the
acceptance of or payment for which may, in the opinion of the Company's
counsel, be unlawful. The Company also reserves the absolute right to waive
any of the conditions of the Offer and any defect or irregularity in the
tender of any particular Shares or any particular shareholder. No tender of
Shares will be deemed to be validly made until all defects or irregularities
have been cured or waived. None of the Company, the Dealer Manager, the
Depositary, the Information Agent nor any other person is or will be obligated
to give notice of any defects or irregularities in tenders, and none of them
will incur any liability for failure to give any such notice.
14. Order of Purchase in Event of Proration. As described in Section 1 of
the Offer to Purchase, shareholders may designate the order in which their
Shares are to be purchased in the event of proration. The order of purchase
may affect whether any capital gain or loss recognized on the Shares purchased
is long-term or short-term (depending on the holding period for the Shares
purchased) and the amount of gain or loss recognized for federal income tax
purposes. See Sections 1 and 14 of the Offer to Purchase.
15. Lost, Stolen or Destroyed Certificates. If your certificate(s)
representing Shares have been lost, stolen or destroyed, indicate the
occurrence of such event on the front of this Letter of Transmittal. The
Depositary will send you additional documentation that will need to be
completed to effectively surrender such lost, stolen or destroyed
certificates.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE
THEREOF) TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY,
OR THE NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, PRIOR
TO THE EXPIRATION DATE. SHAREHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED
SUBSTITUTE FORM W-9 WITH THEIR LETTER OF TRANSMITTAL.
10
<PAGE>
PAYOR'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
PART 1--PLEASE PROVIDE YOUR Social Security
TIN IN THE BOX AT RIGHT AND Number or
CERTIFY BY SIGNING AND Employer
DATING BELOW: Identification Number
----------------------
SUBSTITUTE
--------------------------------------------------------
FORM W-9 PART 2--CERTIFICATION--Under penalties of perjury, I
certify that:
DEPARTMENT OF THE
TREASURY (1) The number shown on this form is my correct
INTERNAL REVENUE Taxpayer Identification Number (or I am waiting
SERVICE for a number to be issued to me), and
PAYER'S REQUEST FOR (2) I am not subject to backup withholding because:
TAXPAYER (a) I am exempt from backup withholding, or (b)
IDENTIFICATION I have not been notified by the Internal Revenue
NUMBER ("TIN") Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report
all interest or dividends, or (c) the IRS has
notified me that I am no longer subject to
backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item
(2) above if you have been notified by the IRS that
you are currently subject to backup withholding
because 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 such item (2).
--------------------------------------------------------
SIGNATURE ________________________ PART 3--
DATE _______________________, 1998
Awaiting TIN [_]
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 ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) 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 (2) I intend to mail or deliver an
application in the near future. I understand that if I do not provide
a taxpayer identification number by the time of payment, 31% of all
reportable payments made to me will be withheld.
Signature _________________________________________________Date , 1998
11
<PAGE>
The Information Agent for the Offer is:
LOGO
Georgeson & Company Inc.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll Free: (800) 223-2064
The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
390 Greenwich Street
New York, New York 10013
(800) 996-7920
Salomon Smith Barney is a service mark of Smith Barney Inc. Salomon Brothers
Inc and Smith Barney Inc. are affiliated but separately registered
broker/dealers under common control of Salomon Smith Barney Holdings Inc.
Salomon Brothers Inc and Salomon Smith Barney Holdings Inc have been licensed
to use the Salomon Smith Barney service mark.
12
<PAGE>
EXHIBIT 9(A)(3)
<PAGE>
NOTICE OF GUARANTEED DELIVERY
OF SHARES OF COMMON STOCK
OF
AVONDALE INDUSTRIES, INC.
This form, or a form substantially equivalent to this form, must be used to
accept the Offer (as defined below) if certificates for the shares of common
stock of Avondale Industries, Inc. are not immediately available, if the
procedure for book-entry transfer cannot be completed on a timely basis, or if
time will not permit all other documents required by the Letter of Transmittal
to be delivered to the Depositary prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase (defined below)). Such form may be
delivered by hand or transmitted by mail or overnight courier, or (for
Eligible Institutions only) by facsimile transmission, to the Depositary. See
Section 3 of the Offer to Purchase. THE ELIGIBLE INSTITUTION THAT COMPLETES
THIS FORM MUST COMMUNICATE THE GUARANTEE TO THE DEPOSITARY AND MUST DELIVER
THE LETTER OF TRANSMITTAL AND CERTIFICATES FOR SHARES TO THE DEPOSITARY WITHIN
THE TIME SHOWN HEREIN. FAILURE TO DO SO COULD RESULT IN A FINANCIAL LOSS TO
SUCH ELIGIBLE INSTITUTION.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By Mail By Overnight Delivery: By Hand:
(First Class Only): 85 Challenger Road 120 Broadway, 13th Floor
P.O. Box 3301 Mail Drop--Reorg New York, NY 10271
South Hackensack, NJ 07606 Ridgefield Park, NJ 07660 Attn: Reorganization
Attn: Reorganization Attn: Reorganization Department
Department Department
By Facsimile Transmission:
(201) 329-8936
Confirm Receipt of Notice of Guaranteed Delivery Only:
(201) 296-4860
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
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, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX IN THE LETTER OF TRANSMITTAL.
1
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Avondale Industries, Inc., a Louisiana
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated May 6, 1998 (the "Offer to Purchase"),
and 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 of common stock, par value $1.00 per share (the "Shares"), of
the Company listed below, pursuant to the guaranteed delivery procedure set
forth in Section 3 of the Offer to Purchase.
Number of Shares____________________
If shares will be tendered by book-
Signature(s)________________________ entry transfer:
Name(s) of Record Holders Name of Tendering
Institution___________________________
- - - ------------------------------------
Please Type or Print Area Code and Telephone No(s)_________
Account Number________________________
Certificate Nos. (If Available)
- - - ------------------------------------ Dated ________________________, 1998
- - - ------------------------------------
Address(es)_________________________
- - - ------------------------------------
(Zip Code)
2
<PAGE>
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
----------------
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, A SEPARATE
NOTICE OF GUARANTEED DELIVERY FOR EACH PRICE SPECIFIED MUST BE USED.
----------------
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR
IF NO BOX IS CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND
INSTRUCTIONS BELOW), THERE IS NO VALID TENDER OF SHARES.
----------------
<TABLE>
<S> <C> <C> <C> <C> <C>
[_] $26.500 [_] $26.625 [_] $26.750 [_] $26.875 [_] $27.000 [_] $27.125
[_] $27.250 [_] $27.375 [_] $27.500 [_] $27.625 [_] $27.750 [_] $27.875
[_] $28.000 [_] $28.125 [_] $28.250 [_] $28.375 [_] $28.500 [_] $28.625
[_] $28.750 [_] $28.875 [_] $29.000
</TABLE>
ODD LOTS
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person who owned beneficially, as of the close of business on May
5, 1998, and who continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares.
The undersigned either (check one box):
[_] owned beneficially as of the close of business on May 5, 1998 and
continues to own beneficially as of the Expiration Date, an aggregate of
fewer than 100 Shares, all of which are being tendered, or
[_] is a broker, dealer, commercial bank, trust company or other nominee that
(i) is tendering, for the beneficial owners thereof, Shares with respect
to which it is the record owner, and (ii) believes, based upon
representations made to it by each such beneficial owner, that such
beneficial owner owned beneficially as of the close of business on May 5,
1998 and continues to own beneficially as of the Expiration Date, an
aggregate of fewer than 100 Shares and is tendering all of such Shares.
If you do not wish to specify a purchase price, check the following box, in
which case you will be deemed to have tendered at the Purchase Price
determined by the Company in accordance with the terms of the Offer (persons
checking this box need not indicate the price per share in the box entitled
"Price (In Dollars) Per Share At Which Shares Are Being Tendered" above). [_]
3
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity that is a member of a registered
national securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or trust company (not a savings bank or
savings and loan association) having an office, branch or agency in the United
States, hereby guarantees (i) that the above-named person(s) has a net long
position in the Shares being tendered within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended, (ii) that
such tender of Shares complies with Rule 14e-4, and (iii) to deliver to the
Depositary at one of its addresses set forth above certificate(s) for the
Shares tendered hereby, in proper form for transfer, or a confirmation of the
book-entry transfer of the Shares tendered hereby into the Depositary's
account at The Depository Trust Company, together with a properly completed
and duly executed Letter(s) of Transmittal (or manually signed facsimile(s)
thereof), with any required signature guarantee(s) and any other required
documents, all within three Nasdaq National Market trading days after the date
hereof.
- - - ------------------------------------- -------------------------------------
Name of Firm Authorized Signature
- - - ------------------------------------- -------------------------------------
Address Name_________________________________
- - - ------------------------------------- Please Type or Print
City, State, Zip Code Title _______________________________
- - - ------------------------------------- Dated__________________________, 1998
Area Code and Tel. No.
Dated: ________________________, 1998
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. YOUR SHARE CERTIFICATES
MUST BE SENT WITH THE LETTER OF TRANSMITTAL.
4
<PAGE>
EXHIBIT 9(A)(4)
<PAGE>
Salomon Smith Barney
Smith Barney Inc.
390 Greenwich Street
New York, NY 10013
OFFER TO PURCHASE FOR CASH
UP TO 1,250,000 SHARES OF ITS COMMON STOCK
BY
AVONDALE INDUSTRIES, INC.
AT A PURCHASE PRICE NOT GREATER THAN $29.00
NOR LESS THAN $26.50 PER SHARE
- - - -------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JUNE 3, 1998, UNLESS THE OFFER
IS EXTENDED BY THE COMPANY.
- - - -------------------------------------------------------------------------------
May 6, 1998
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees:
We have been engaged by Avondale Industries, Inc., a Louisiana corporation
(the "Company"), to act as Dealer Manager in connection with the Company's
Offer to Purchase up to 1,250,000 shares of its common stock, par value $1.00
per share (the "Shares"), at prices not greater than $29.00 nor less than
$26.50 per share, net to the seller in cash, specified by tendering
shareholders, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated May 6, 1998 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer").
The Company will determine a single price (not greater than $29.00 nor less
than $26.50 per share), net to the seller in cash, that it will pay for Shares
validly tendered and not withdrawn pursuant to the Offer (the "Purchase
Price"), taking into account the number of Shares so tendered and the prices
specified by tendering shareholders. The Company will select the lowest
Purchase Price that will allow it to purchase 1,250,000 Shares (or such lesser
number of Shares as is validly tendered at prices not greater than $29.00 nor
less than $26.50 per share) and not withdrawn pursuant to the Offer. The
Company will purchase all Shares validly tendered at prices at or below the
Purchase Price and not withdrawn, upon the terms and subject to the conditions
of the Offer, including the provisions relating to proration described in the
Offer to Purchase. See Section 1 of the Offer to Purchase.
The Purchase Price will be paid in cash, net to the seller, with respect to
all Shares purchased. Shares tendered at prices in excess of the Purchase
Price and Shares not purchased because of proration will be returned.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6 OF
THE OFFER TO PURCHASE.
1
<PAGE>
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible. The Company will, upon request, reimburse you for
reasonable and customary handling and mailing expenses incurred by you in
forwarding any of the enclosed materials to your clients.
For your information and for forwarding to your clients for whom you hold
shares registered in your name or in the name of our nominee, we are enclosing
the following documents:
1. The Offer to Purchase.
2. The Letter of Transmittal for your use and for the information of your
clients.
3. A letter to shareholders of the Company from the Chairman of the
Board, President and Chief Executive Officer of the Company.
4. The Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares and all other required documents cannot be delivered to the
Depositary by the Expiration Date (each as defined in the Offer to
Purchase).
5. A letter that may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominee, with space
for obtaining such clients' instructions with regard to the Offer.
6. 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.
7. A return envelope addressed to ChaseMellon Shareholder Services,
L.L.C., the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE OFFER,
PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, JUNE 3, 1998, UNLESS THE OFFER IS EXTENDED.
The Company will not pay any fees or commissions to any broker, dealer or
other person for soliciting tenders of Shares pursuant to the Offer (other
than the Dealer Manager). The Company will, upon request, reimburse brokers,
dealers, commercial banks and trust companies for reasonable and customary
handling and mailing expenses incurred by them in forwarding materials
relating to the Offer to their customers. The Company will pay all stock
transfer taxes applicable to its purchase of Shares pursuant to the Offer,
subject to Instruction 7 of the Letter of Transmittal.
As described in the Offer to Purchase, if more than 1,250,000 Shares have
been validly tendered at or below the Purchase Price and not withdrawn prior
to the Expiration Date, as defined in Section 1 of the Offer to Purchase, the
Company will accept Shares for purchase in the following order of priority:
(i) all Shares validly tendered at or below the Purchase Price and not
withdrawn prior to the Expiration Date by any shareholder who owned
beneficially as of the close of business on May 5, 1998 and who continues to
own beneficially as of the Expiration Date, an aggregate of fewer than 100
Shares and who validly tenders all of such Shares (partial tenders will not
qualify for this preference) and completes the box captioned "Odd Lots" in the
Letter of Transmittal and, if applicable, the Notice of Guaranteed Delivery;
and (ii) after purchase of all of the foregoing Shares, all other Shares
validly tendered at or below the Purchase Price and not withdrawn prior to the
Expiration Date on a pro rata basis.
2
<PAGE>
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER.
HOWEVER, SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT WHICH SHARES
SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES.
Any questions or requests for assistance or additional copies of the
enclosed materials should be directed to the Information Agent or the Dealer
Manager at their respective addresses and telephone numbers set forth on the
back cover of the enclosed Offer to Purchase.
Very truly yours,
Salomon Smith Barney
- - - -------------------------------------------------------------------------------
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE COMPANY, THE DEALER MANAGER, THE
INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO
USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN
CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE
STATEMENTS CONTAINED THEREIN.
- - - -------------------------------------------------------------------------------
3
<PAGE>
EXHIBIT 9(A)(5)
<PAGE>
OFFER TO PURCHASE FOR CASH
UP TO 1,250,000 SHARES OF ITS COMMON STOCK
BY
AVONDALE INDUSTRIES, INC.
AT A PURCHASE PRICE NOT GREATER THAN $29.00
NOR LESS THAN $26.50 PER SHARE
- - - -------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JUNE 3, 1998, UNLESS THE OFFER
IS EXTENDED BY THE COMPANY.
- - - -------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated May 6, 1998
(the "Offer to Purchase"), and the related Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer") setting forth an
offer by Avondale Industries, Inc., a Louisiana corporation (the "Company"),
to purchase up to 1,250,000 shares of its common stock, par value $1.00 per
share (the "Shares"), at prices not greater than $29.00 nor less than $26.50
per share, net to the seller in cash, specified by tendering shareholders,
upon the terms and subject to the conditions of the Offer. Also enclosed
herewith is certain other material related to the Offer, including a letter to
shareholders from Albert L. Bossier, Jr., Chairman of the Board, President and
Chief Executive Officer of the Company.
The Company will determine a single per share price (not greater than $29.00
nor less than $26.50 per share) that it will pay for the Shares validly
tendered pursuant to the Offer and not withdrawn (the "Purchase Price"),
taking into account the number of shares so tendered and the prices specified
by tendering shareholders. The Company will select the lowest Purchase Price
that will allow it to purchase 1,250,000 Shares (or such lesser number of
Shares as are validly tendered at prices not greater than $29.00 nor less than
$26.50 per share) validly tendered and not withdrawn pursuant to the Offer.
The Company will purchase all Shares validly tendered at prices at or below
the Purchase Price and not withdrawn, upon the terms and subject to the
conditions of the Offer, including the provisions thereof relating to
proration. See Section 1 of the Offer to Purchase.
WE ARE THE HOLDER OF RECORD OF SHARES HELD FOR YOUR ACCOUNT. THEREFORE, A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU
FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY
US FOR YOUR ACCOUNT.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Your attention is invited to the following:
1. You may tender Shares at prices (in multiples of $.125), not greater
than $29.00 nor less than $26.50 per share, as indicated in the attached
Instruction Form, net to you in cash.
2. The Offer is extended for up to 1,250,000 Shares, constituting
approximately 8.6% of the total Shares outstanding as of May 5, 1998. The
Offer is not conditioned on any minimum number of Shares being tendered.
The Offer is, however, subject to certain other conditions set forth in the
Offer to Purchase.
3. The Offer, proration period and withdrawal rights will expire at 12:00
Midnight, New York City time, on Wednesday, June 3, 1998, unless the Offer
is extended. Your instructions to us should be forwarded to us in ample
time to permit us to submit a tender on your behalf.
1
<PAGE>
4. As described in the Offer to Purchase, if more than 1,250,000 Shares
have been validly tendered at or below the Purchase Price and not withdrawn
prior to the Expiration Date, as defined in Section 1 of the Offer to
Purchase, the Company will purchase Shares in the following order of
priority:
(i) all Shares validly tendered at or below the Purchase Price and
not withdrawn prior to the Expiration Date by any shareholder who owned
beneficially as of the close of business on May 5, 1998 and who
continues to own beneficially as of the Expiration Date an aggregate of
fewer than 100 Shares and who validly tenders all of such Shares
(partial tenders will not qualify for this preference) and completes
the box captioned "Odd Lots" in the Letter of Transmittal and, if
applicable, the Notice of Guaranteed Delivery; and
(ii) after purchase of all the foregoing Shares, all other Shares
validly tendered at or below the Purchase Price and not withdrawn prior
to the Expiration Date on a pro rata basis. See Section 1 of the Offer
to Purchase for a discussion of proration.
5. Tendering shareholders will not be obligated to pay any brokerage
commissions or solicitation fees on the Company's purchase of Shares in the
Offer. Any stock transfer taxes applicable to the purchase of Shares by the
Company pursuant to the Offer will be paid by the Company, except as
otherwise provided in Instruction 7 of the Letter of Transmittal.
6. If you wish to tender portions of your Shares at different prices you
must complete a separate Instruction Form for each price at which you wish
to tender each portion of your Shares. We must submit separate Letters of
Transmittal on your behalf for each price you will accept.
7. If you owned beneficially as of the close of business on May 5, 1998
and continue to own beneficially as of the Expiration Date an aggregate of
fewer than 100 Shares and you instruct us to tender at or below the
Purchase Price on your behalf all such Shares prior to the Expiration Date
and check the box captioned "Odd Lots" in the Instruction Form, all such
Shares will be accepted for purchase before proration, if any, of the
purchase of other tendered Shares.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MAKING OF
THE OFFER. HOWEVER, SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT
WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF
DIRECTORS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER
OR REFRAIN FROM TENDERING SHARES.
If you wish to have us tender any or all of your Shares held by us for your
account upon the terms and subject to the conditions set forth in the Offer to
Purchase, please so instruct us by completing, executing and returning to us
the attached Instruction Form. An envelope to return your instructions to us
is enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise specified on the Instruction Form. 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 being made to all holders of Shares. The Company is not aware
of any jurisdiction where the making of the Offer is not in compliance with
applicable law. If the Company becomes aware of any jurisdiction where the
making of the Offer is not in compliance with any valid applicable law, the
Company will make a good faith effort to comply with such law. If, after such
good faith effort, the Company cannot comply with such law, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares residing in such jurisdiction. In any jurisdiction, the securities or
blue sky laws of which require the Offer to be made by a licensed broker or
dealer, the Offer is being made on the Company's behalf by Salomon Smith
Barney, the Dealer Manager, or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
2
<PAGE>
INSTRUCTION FORM
INSTRUCTIONS WITH RESPECT TO OFFER TO PURCHASE FOR CASH
UP TO 1,250,000 SHARES OF COMMON STOCK
OF
AVONDALE INDUSTRIES, INC.
AT A PURCHASE PRICE NOT GREATER THAN $29.00
NOR LESS THAN $26.50 PER SHARE
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated May 6, 1998, and the related Letter of Transmittal (which,
as amended from time to time, together constitute the "Offer") in connection
with the Offer by Avondale Industries, Inc. (the "Company") to purchase up to
1,250,000 shares of its common stock, par value $1.00 per share (the
"Shares"), at prices not greater than $29.00 nor less than $26.50 per Share,
net to the undersigned in cash, specified by the undersigned, upon the terms
and subject to the conditions of the Offer.
This will instruct you to tender to the Company the number of Shares
indicated below (or, if no number is indicated below, all Shares) that are
held by you for the account of the undersigned, at the price per Share
indicated below, upon the terms and subject to the conditions of the Offer.
3
<PAGE>
SHARES TENDERED
[_] By checking this box, all Shares held by us for your account will be
tendered. If fewer than all Shares are to be tendered, please check the box
and indicate below the aggregate number of Shares to be tendered by us.
______ Shares
Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
PRICE (IN DOLLARS) PER SHARE
AT WHICH SHARES ARE BEING TENDERED
----------------
IF SHARES ARE BEING TENDERED AT MORE THAN ONE PRICE, A SEPARATE INSTRUCTION
FORM FOR EACH PRICE SPECIFIED MUST BE USED.
----------------
CHECK ONLY ONE BOX. IF MORE THAN ONE BOX IS CHECKED, OR
IF NO BOX IS CHECKED (EXCEPT AS PROVIDED IN THE ODD LOTS BOX AND
INSTRUCTIONS BELOW), THERE IS NO VALID TENDER OF SHARES.
----------------
<TABLE>
<S> <C> <C> <C> <C> <C>
[_] $26.500 [_] $26.625 [_] $26.750 [_] $26.875 [_] $27.000 [_] $27.125
[_] $27.250 [_] $27.375 [_] $27.500 [_] $27.625 [_] $27.750 [_] $27.875
[_] $28.000 [_] $28.125 [_] $28.250 [_] $28.375 [_] $28.500 [_] $28.625
[_] $28.750 [_] $28.875 [_] $29.000
</TABLE>
ODD LOTS
[_] By checking this box, the undersigned represent(s) that the undersigned
owned beneficially as of the close of business on May 5, 1998 and
continue(s) to own beneficially as of the Expiration Date an aggregate of
fewer than 100 Shares and is tendering all of such Shares.
[_] If you do not wish to specify a purchase price, check this box, in which
case you will be deemed to have tendered at the Purchase Price determined by
the Company in accordance with the terms of the Offer (persons checking this
box need not indicate the price per share in the box entitled "Price (In
Dollars) Per Share At Which Shares Are Being Tendered").
THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE ELECTION AND RISK OF THE
TENDERING SHAREHOLDERS. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE DELIVERY.
SIGN HERE
-------------------------------------
Dated: ________________________, 1998 Signature(s)
Name_________________________________
Address______________________________
-------------------------------------
-------------------------------------
Social Security or Taxpayer ID No.:
-------------------------------------
4
<PAGE>
EXHIBIT 9(A)(6)
<PAGE>
[AVONDALE INDUSTRIES, INC. LETTERHEAD]
Albert L. Bossier, Jr.
Chairman of the Board, President
and Chief Executive Officer
May 6, 1998
Dear Shareholder:
Avondale Industries, Inc. (the "Company") is offering to purchase up to
1,250,000 shares of its common stock at a price not greater than $29.00 nor
less than $26.50 per share. The Company is conducting the Offer through a
procedure commonly referred to as a "Dutch auction." This procedure allows you
to select the price within the specified price range at which you are willing
to sell all or a portion of your shares to the Company.
The Offer is explained in detail in the enclosed Offer to Purchase and
Letter of Transmittal. If you wish to tender your shares, instructions on how
to tender shares are provided in the enclosed materials. I encourage you to
read these materials carefully before making any decision with respect to the
Offer. Neither the Company nor its Board of Directors makes any recommendation
to any shareholder whether or not to tender any or all shares.
Please note that the Offer is scheduled to expire at 12:00 Midnight, New
York City time, on Wednesday, June 3, 1998, unless extended by the Company.
Questions regarding the Offer should not be directed to the Company but should
instead be directed to Georgeson & Company Inc., the Information Agent,at
(800) 223-2064.
Sincerely,
Albert L. Bossier, Jr.
Chairman of the Board, President
and Chief Executive Officer
1
<PAGE>
EXHIBIT 9(A)(7)
<PAGE>
IMMEDIATELY -- MAY 6, 1998
Thomas M. Kitchen:(504) 436-5237
Eugene K. Simon, Jr.:(504) 436-5664
AVONDALE ANNOUNCES TENDER OFFER TO PURCHASE UP TO 1.25 MILLION SHARES OF
ITS COMMON STOCK
NEW ORLEANS, La. (May 6, 1998) Avondale Industries, Inc. (Nasdaq/NM: AVDL)
today announced that its Board of Directors has authorized a "Dutch auction"
cash tender offer to repurchase up to 1.25 million shares or 8.6% of the
approximately 14.5 million shares of the Company's common stock currently
outstanding.
Albert L. Bossier, Jr., Chairman of the Board and Chief Executive Officer,
said, "We are pleased with the Board's decision to use a portion of the
Company's capital to repurchase our shares. We believe that investing in the
Company's shares under current market conditions represents an attractive use
of the Company's funds. Avondale's strong financial position should allow us
to implement this program while supporting future programs and making the
capital investments necessary to continue improving productivity."
Thomas M. Kitchen, Corporate Vice President and Chief Financial Officer
added, "This share repurchase program demonstrates our continued commitment to
increasing shareholder value and our continued confidence in the underlying
strength of the Company. Avondale ended the first quarter of 1998 in a strong
financial position with approximately $100 million in cash and cash
equivalents and $53 million available through its revolving credit facility.
In addition, with a contract backlog of $3.25 billion including unexercised
options and a relatively low debt-to-capital ratio of 20%, the Company is well
positioned to continue the positive momentum created over the last several
years."
Under the terms of the offer, each Avondale shareholder will be invited to
tender shares at prices specified by the shareholder not in excess of $29.00
nor less than $26.50. Based on the number of shares tendered and the prices
specified by the tendering shareholders, the Company will select the lowest
single purchase price per share, not in excess of $29.00 nor less than $26.50,
that will enable it to purchase 1.25 million shares, or such fewer number of
shares as are validly tendered. All shareholders who have properly tendered
and not withdrawn shares at or below the selected purchase price will receive
such price per share, net to the seller in cash, subject to the terms of the
offer, including the proration provisions described in the Offer to Purchase.
The offer, proration period and withdrawal rights will expire at Midnight,
Eastern Standard Time, on June 3, 1998, unless the offer is extended. The
offer will be made only by the Offer to Purchase and the related Letter of
Transmittal, copies of which have been mailed to the Company's shareholders.
The dealer manager for the offer is Salomon Smith Barney and the information
agent is Georgeson & Company Inc.
Avondale Industries, Inc., headquartered in metro New Orleans designs,
builds and overhauls both military and commercial vessels.
1
<PAGE>
EXHIBIT 9(A)(8)
<PAGE>
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer (as defined below) is
made solely by the Offer to Purchase dated May 6, 1998 and the related
Letter of Transmittal (and any amendments thereto) and is being made to
all holders of Shares. The Purchaser (as defined below) is not aware of
any state where the making of the Offer is prohibited by administrative
or judicial action pursuant to state statute. If the Purchaser becomes
aware of any state where the making of the Offer is prohibited, the
Purchaser will make a good faith effort to comply with any such
statute. If, after such good faith effort, the Purchaser cannot
comply with any applicable statute, the Offer will not be made to
(nor will tenders be accepted from or on behalf of) the holders
of Shares in such state. In those jurisdictions where the
securities, blue sky or other laws require the Offer to be made
by a licensed broker or dealer, the Offer shall be deemed to
be on behalf of the Purchaser by Salomon Smith Barney or one
or more registered brokers or dealers licensed under the
laws of such jurisdictions.
NOTICE OF OFFER TO PURCHASE FOR CASH
BY
AVONDALE INDUSTRIES, INC.
UP TO 1,250,000 SHARES OF ITS COMMON STOCK AT A PURCHASE PRICE
NOT GREATER THAN $29.00 NOR LESS THAN $26.50 PER SHARE
Avondale Industries, Inc., a Louisiana corporation (the "Company"), invites
its shareholders to tender up to 1,250,000 shares of its common stock (the
"Shares") to the Company at prices not greater than $29.00 nor less than
$26.50 per share in cash, specified by tendering shareholders, upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated May 6,
1998 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
as amended from time to time, together constitute the "Offer").
- - - -------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, JUNE 3, 1998, UNLESS THE OFFER
IS EXTENDED BY THE COMPANY.
- - - -------------------------------------------------------------------------------
The Offer is not conditioned on any minimum number of Shares being tendered.
The Offer is, however, subject to certain other conditions set forth in the
Offer to Purchase.
1
<PAGE>
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MAKING OF
THE OFFER. HOWEVER, SHAREHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER AND THE PRICE OR PRICES AT
WHICH SHARES SHOULD BE TENDERED. NEITHER THE COMPANY NOR ITS BOARD OF
DIRECTORS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER
OR REFRAIN FROM TENDERING SHARES.
The Company will, upon the terms and subject to the conditions of the Offer,
determine a single per share price (not greater than $29.00 nor less than
$26.50 per share), net to the seller in cash (the "Purchase Price"), that it
will pay for Shares validly tendered and not withdrawn pursuant to the Offer,
taking into account the number of Shares so tendered and the prices specified
by tendering shareholders. The Company will select the lowest Purchase Price
that will allow it to buy 1,250,000 Shares (or such lesser number of Shares as
are validly tendered at prices not greater than $29.00 nor less than $26.50
per share) validly tendered and not withdrawn pursuant to the Offer. The
Company will pay the Purchase Price for all Shares validly tendered prior to
the Expiration Date (as defined below) at prices at or below the Purchase
Price and not withdrawn, upon the terms and subject to the conditions of the
Offer including the proration terms described below. The term "Expiration
Date" means 12:00 Midnight, New York City time, on Wednesday, June 3, 1998,
unless and until the Company in its sole discretion shall have extended the
period of time during which the Offer is open, in which event the term
"Expiration Date" shall refer to the latest time and date at which the Offer,
as so extended by the Company, shall expire. The Company reserves the right,
in its sole discretion, to purchase more than 1,250,000 Shares pursuant to the
Offer. For purposes of the Offer, the Company will be deemed to have accepted
for payment (and therefore purchased), subject to proration, Shares that are
validly tendered at or below the Purchase Price and not withdrawn when, as and
if it gives oral or written notice to ChaseMellon Shareholder Services, L.L.C.
(the "Depositary") of its acceptance of such Shares for payment pursuant to
the Offer.
Upon the terms and subject to the conditions of the Offer, in the event that
more than 1,250,000 Shares (or such greater number of Shares as the Company
may elect to purchase pursuant to the Offer) are validly tendered at or below
the Purchase Price and not withdrawn, the Company will purchase such validly
tendered Shares in the following order of priority: (i) all Shares validly
tendered at or below the Purchase Price and not withdrawn prior to the
Expiration Date by any Odd Lot Owner (as defined in the Offer to Purchase) who
tenders all such Shares beneficially owned by such Odd Lot Owner at or below
the Purchase Price (partial tenders will not qualify for this preference) and
who completes the box captioned "Odd Lots" on the Letter of Transmittal and,
if applicable, on the Notice of Guaranteed Delivery, and (ii) after purchase
of all of the foregoing Shares, all other Shares validly tendered at or below
the Purchase Price prior to the Expiration Date on a pro rata basis.
The Company is making the Offer to (i) use the Company's cash to lower its
cost of capital for the benefit of its shareholders and (ii) provide those
shareholders who desire liquidity an opportunity to sell all or a portion of
their shares without the usual transaction costs associated with open market
sales. After the Offer is completed, the Company expects to have sufficient
cash and access to other sources of capital to fund its operations.
Shares tendered pursuant to the Offer may be withdrawn at any time before
the Expiration Date and, unless accepted for payment by the Company as
provided in the Offer to Purchase, may also be withdrawn after 12:00 Midnight,
New York City time, on Wednesday, July 1, 1998. For a withdrawal to be
effective, the Depositary must receive a notice of withdrawal in written,
telegraphic or facsimile transmission form in a timely manner. Such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares tendered, the number of Shares to be withdrawn
and the name of the registered holder, if different from that of the person
who tendered such Shares. If the certificates have been delivered or otherwise
identified to the Depositary, then, prior to the release of such certificates,
the tendering shareholder must also submit the serial numbers shown on the
particular certificates evidencing the Shares and the signature on the notice
of withdrawal must be guaranteed by an Eligible Institution (as defined in the
Offer to Purchase) (except
2
<PAGE>
in the case of Shares tendered by an Eligible Institution). If Shares have
been tendered pursuant to the procedure for book-entry transfer, the notice of
withdrawal must specify the name and the number of the account at the
applicable Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with the procedures of such facility.
The Offer to Purchase and the Letter of Transmittal contain important
information which should be read carefully before shareholders decide whether
to accept or reject the Offer and, if accepted, at what price or prices to
tender their Shares. These materials are being mailed to record holders of
Shares and are being furnished to brokers, banks and similar persons whose
names, or the names of whose nominees, appear on the Company's shareholder
list (or, if applicable, who are listed as participants in a clearing agency's
security position listing) for transmittal to beneficial holders of Shares.
The information required to be disclosed by Rule 13e-4(d)(1) under the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated by reference herein.
Additional copies of the Offer to Purchase and the Letter of Transmittal may
be obtained from the Information Agent and will be furnished at the Company's
expense. Questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager as set forth below.
The Information Agent for the Offer is:
LOGO
Georgeson & Company Inc.
Wall Street Plaza
New York, New York 10005
(212) 440-9800 (Call Collect)
or
CALL TOLL-FREE (800) 223-2064
The Dealer Manager for the Offer is:
SALOMON SMITH BARNEY
390 Greenwich Street
New York, New York 10013
CALL TOLL-FREE (800) 996-7920
Salomon Smith Barney is a service mark of Smith Barney Inc. Salomon Brothers
Inc and Smith Barney Inc. are affiliated but separately registered
broker/dealers under common control of Salomon Smith Barney Holdings Inc.
Salomon Brothers Inc and Salomon Smith Barney Holdings Inc have been licensed
to use the Salomon Smith Barney service mark.
May 6, 1998
3
<PAGE>
EXHIBIT 9(A)(9)
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- - - --------------------------------------- ---------------------------------------
<TABLE>
<CAPTION>
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- - - -----------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, the first
individual on the
account(1)
3. Husband and wife (joint The actual owner
account) of the account,
or, if
joint funds,
either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor,
guardian or committee for a or incompetent
designated ward, minor, or person(3)
incompetent person
7. a. The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b. So-called trust account The actual
that is not a legal or owner(1)
valid trust under State
law
8. Sole proprietorship The owner(4)
account
</TABLE>
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
--------
<S> <C>
9. A valid trust, estate, or The legal entity
pension trust (Do not furnish
the identifying
number of the
personal
representative or
trustee unless
the legal entity
itself is not
designated in the
account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held The partnership
in the name of the
partnership
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State or
local government, school
district, or prison) that
receives agricultural
program payments
</TABLE>
---------------------------------------
- - - ---------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show your individual name. You may also enter your business name. You may
use either your Social Security Number or your Employer Identification
Number.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
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<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number
(for businesses and all other entities), at the local office of the Social
Security Administration or the Internal Revenue Service (the "IRS") and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
.A corporation.
.A financial institution.
. An organization exempt from tax under Section 501(a) of the Internal Rev-
enue Code of 1986, as amended (the "Code"), or an individual retirement
plan.
. The United States or any agency or instrumentalities.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under Section 584(a) of the Code.
. An exempt charitable remainder trust, or a non-exempt trust described in
Section 4947(a)(1) of the Code.
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under Section 1441
of the Code.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals.
NOTE:You may be subject to backup withholding if this interest is $600 or more
and is paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends un-
der Section 852 of the Code).
. Payments described in Section 6049(b)(5) of the Code to non-resident al-
iens.
. Payments on tax-free covenant bonds under Section 1451 of the Code.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, SIGN AND DATE
THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NONRESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see Sections 6041, 6041A(a), 6045, 6050A and 6050N
of the Code and the regulations promulgated therein.
PRIVACY ACT NOTICE--Section 6109 requires most recipients of dividend, inter-
est, or other payments to give taxpayer identification numbers to payers who
must report the payments to IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are re-
quired to file tax returns. Payers must generally withhold 31% of taxable in-
terest, dividends and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER--If you fail
to furnish your taxpayer identification number to a payer, you are subject to
a penalty of $50 for each such failure unless your failure is due to reason-
able cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION--Willfully falsifying certifi-
cations or affirmations may subject you to criminal penalties including fines
and/or imprisonment.
FOR ADDITIONAL INFORMATION, CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVE-
NUE SERVICE.
