SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ADT Limited
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
ADT Limited Letterhead
, 1997
IMPORTANT - SPECIAL GENERAL MEETING
July 8, 1997
Dear Fellow Shareholders:
You are cordially invited to attend a special general meeting
of shareholders of ADT Limited ("ADT") scheduled to be held on July 8, 1997 at
9:00 a.m., local time, at Cedar House, 41 Cedar Avenue, Hamilton, Bermuda.
This special meeting is of particular importance to all ADT
shareholders because of Western Resources, Inc.'s (together with its
subsidiaries, "Western") ongoing, hostile attempt to take over your Company.
As you know, a subsidiary of Western is currently the owner of
approximately 27 per cent of ADT's outstanding common shares. Western has
announced its intention to commence a hostile offer (the "Western Offer") to
acquire your shares in ADT for cash and Western stock. Western has forced ADT
to call this special general meeting so that Western can remove the existing
Board of Directors of ADT (the "Board"), including all of its independent
directors, and install its own hand-picked nominees to the Board. Western has
left no doubt that its objective in precipitating the special meeting is to
obtain control of ADT and have its nominees dismantle ADT's shareholder
protections so that it can attempt to complete its offer for the shares of
ADT. Your Board of Directors unanimously recommends a vote "AGAINST" the
Western Proposals.
Due to the limited time since announcement of the Western Offer
and the limited information presently available, your Board has not reached a
definitive decision with respect to the Western Offer. However, you should be
aware that the Board's preliminary view, based on this limited information, is
that the Western Offer is inadequate.
A [color] proxy card is enclosed for your use. THE BOARD URGES
YOU TO COMPLETE, SIGN, DATE AND RETURN THE [COLOR] PROXY CARD IN THE
ACCOMPANYING ENVELOPE, which is postage paid if mailed in the United States.
Your Board has also made arrangements for shareholders residing outside the
United States to mail their proxies. See "General-Voting Your Proxy" in the
enclosed Proxy Statement.
Your Board urges you not to sign or return any green proxy card
sent to you by Western. If you have previously signed a proxy card sent by
Western, your Board urges you to sign, date and promptly mail the enclosed
[color] proxy card, which will revoke any earlier dated proxy cards solicited
by Western which you may have signed. Remember that it will not help your
Board to abstain from returning a proxy card, nor will it help to return a
Western proxy card voting to "abstain." The best way for you to support your
Board is to vote "AGAINST" the Western Proposals on the [color] proxy card
sent to you by your Board.
On behalf of everyone at ADT, we thank you for your continued
support. We remain committed to acting in the best interests of you, our
fellow shareholders, and our Company. If you have any questions, please feel
free to call our proxy solicitor, D.F. King & Co., Inc., at 1-800-488-8035
(toll free in the United States) or 212-269-5550 (outside the United States).
Sincerely,
MICHAEL A. ASHCROFT STEPHEN J. RUZIKA
Chairman of the Board and Chief Financial Officer and Executive
Chief Executive Officer Vice President
IMPORTANT
Your vote is important. Please sign, date and promptly mail your
[color] proxy card in the postage prepaid envelope provided. Remember, do
not return any proxy card sent to you by Western.
If your shares are registered in the name of a broker, only your
broker can execute a proxy and vote your shares and only after receiving
your specific instructions. Please contact the person responsible for your
account and direct him or her to execute a proxy on your behalf today. If
you have any questions or need further assistance in voting, please contact
the firm assisting us in solicitation of proxies:
D.F. King & Co., Inc.
Call 1-800-488-8035 (toll-free in the United States)
or 212-269-5550 (outside the United States)
The following is the text of the Notice of Special Meeting that was sent to
shareholders of the Company on January 7, 1997:
ADT LIMITED
NOTICE OF SPECIAL MEETING
Notice is hereby given that a Special General Meeting (the "Meeting") of ADT
Limited (the "Company"), will be held on July 8, 1997 at 9:00 a.m., local
time, at Cedar House, 41 Cedar Avenue, Hamilton, Bermuda for the purpose of
considering and voting upon the following resolutions:
RESOLUTIONS
1. RESOLVED, that subject to Resolutions 2 and 3 below being passed all of the
present members of the Board of Directors of the Company (the "Board") and
any other person who may be a director of the Company at the time of the
Meeting be and are hereby removed from the office of director;
2. RESOLVED, FURTHER, that the number of seats on the Board from and after the
date of this resolution shall be two (2);
3. RESOLVED, FINALLY, that the directors of the Company from and after the
date of this resolution until the next annual general meeting of the
Company or until their successors have been duly elected shall be Steven L.
Kitchen and Steven A. Millstein, or if either of them is unable to serve as
a director of the Company due to death, disability or otherwise, any other
person designated as a director nominee by Westar Capital, Inc.
By Order of the Board of Directors,
John D. Campbell, Secretary
41 Cedar Avenue
Hamilton HM12
Bermuda
January 7, 1997
PRELIMINARY PROXY STATEMENT (SUBJECT TO COMPLETION)
ADT LIMITED
PROXY STATEMENT
BY THE BOARD OF DIRECTORS OF ADT LIMITED
IN OPPOSITION TO WESTERN PROPOSALS
This proxy statement is being furnished by the Board of Directors (the
"Board") of ADT Limited ("ADT" or the "Company") to shareholders of the
Company. This proxy statement and the enclosed proxy card are first being
mailed to shareholders of the Company on or about , 1997. In
this proxy statement, the Board opposes Western Resources, Inc.'s (together
with its subsidiaries, "Western") solicitation of proxies (the "Western
Solicitation") relating to a Special General Meeting of Shareholders to be
held on July 8, 1997 at 9:00 a.m., local time, at Cedar House, 41 Cedar
Avenue, Hamilton, Bermuda (the "Special General Meeting") which is being
called pursuant to a requisition by Western, in accordance with Section 74 of
the Companies Act 1981 of Bermuda and ADT Bye-Law 42. The Western Solicitation
is being conducted pursuant to a proxy statement dated , 1997 (the
"Western Proxy Statement").
At the Special General Meeting, shareholders will consider and vote
upon three proposals of Western (the "Western Proposals"): (i) to remove
all of the members of the Board of Directors of the Company, subject to the
adoption of Western's second and third proposals (the "Western Removal
Proposal"), (ii) to reduce the number of seats on the Board of Directors of
the Company to two (the "Western Reduction Proposal") and (iii) to elect
two persons nominated by Western to be directors (the "Western Election
Proposal"). Western has stated that the Western Proposals are in
furtherance of its attempts to take over the Company by means of its offer
to exchange all of ADT's common shares, par value $0.10 per share (the
"Common Shares"), for cash and shares of Western common stock (the "Western
Offer"). If the Western Proposals are successful, Western has announced
its intention to proceed with an amalgamation of ADT into a subsidiary of
Western. At the Special General Meeting, the shareholders may also
consider and vote upon any other business that may properly come before the
Special General Meeting.
Western has left no doubt that its objective in precipitating the
Special General Meeting is to obtain control of the Company and have its
nominees dismantle the Company's shareholder protections so that Western
can attempt to complete its offer for the shares of the Company. Your
Board of Directors unanimously recommends a vote "AGAINST" the Western
Proposals.
Due to the limited time since announcement of the Western Offer and
the limited information presently available, your Board has not reached a
definitive decision with respect to the Western Offer. However, you should be
aware that the Board's preliminary view, based on this limited information, is
that the Western Offer is inadequate.
A [color] proxy card is enclosed for your use. THE BOARD URGES YOU TO
COMPLETE, SIGN, DATE AND RETURN THE [COLOR] PROXY CARD IN THE ACCOMPANYING
ENVELOPE, which is postage paid if mailed in the United States. Your Board
has also made arrangements for shareholders residing outside the United States
to mail their proxies. See "General-Voting Your Proxy" below.
Your Board urges you not to sign or return any green proxy card sent to
you by Western. If you have previously signed a proxy card sent by
Western, your Board urges you to sign, date and promptly mail the enclosed
[color] proxy card, which will revoke any earlier dated proxy cards
solicited by Western which you may have signed. Remember that it will not
help your Board to abstain from returning a proxy card, nor will it help to
return a Western proxy card voting to "abstain." The best way for you to
support your Board is to vote "AGAINST" the Western Proposals on the
[color] proxy card sent to you by your Board.
If you have any questions or need further assistance in voting your
shares, please contact:
D.F. King & Co., Inc.
Call 1-800-488-8035 (toll-free in the United States)
or 212-269-5550 (outside the United States)
Background
According to Amendment No. 9 to Western's Schedule 13D with
respect to ADT filed with the Securities and Exchange Commission ("SEC") on
December 18, 1996 (together with earlier amendments, the "Western Schedule
13D"), Western is currently the beneficial owner of 38,287,111 Common Shares
(including 14,115 shares issuable upon exchange of 500 Liquid Yield Option
Notes). This constitutes approximately 27.1 per cent of the total number of
Common Shares currently issued and outstanding. According to the Western
Schedule 13D, Western acquired 30,800,000 Common Shares from Laidlaw
Transportation, Inc., a subsidiary of Laidlaw, Inc., in transactions which
concluded in March 1996. Statements contained in the Western Schedule 13D
indicate that Western acquired its interests in ADT "for investment purposes."
According to amendments to the Western Schedule 13D, Western has been
acquiring shares since July 1996 in order to obtain "favorable market prices."
Until December 18, 1996, the Western Schedule 13D stated that Western had no
specific plans or proposals that related to or would result in, among other
things, any extraordinary corporate transaction, any changes in ADT's Board or
management, any changes in ADT's Memorandum of Association and Bye-Laws or any
changes in ADT's business or corporate structure.
Direct contacts between ADT and Western have been limited and
have not included discussions of a business combination. Senior
representatives of ADT and Western have met on only one occasion in early
1996. On that occasion, ADT Chairman Michael Ashcroft and one other ADT
director met with representatives of Western to discuss possible joint
marketing opportunities relating to certain energy products. However, before
substantive discussions could commence on the feasibility of a joint marketing
program, it was essential to resolve the issues arising from the fact that
Western is a competitor of ADT in the security marketplace. No substantive
proposals were put forward by Western, and no further discussions on this
topic were held. In May 1996 Western's Chairman made one brief call to Mr.
Ashcroft to attempt to arrange a subsequent meeting. In that call, Western's
Chairman mentioned the possibility of a business combination with ADT.
However, Western never came forward with any proposal regarding any such
business combination and no further meetings were held.
Western notified ADT, by letter dated April 2, 1996, of its
intention to vote its shares in opposition to the proposed amendment to ADT's
1993 Long Term Incentive Plan at ADT's Annual General Meeting on April 11,
1996 (the "Plan Amendment") and urged the ADT Board to consider withdrawing it
from consideration at the Annual Meeting. The ADT Board did not withdraw the
Plan Amendment and ADT's shareholders duly approved it.
On July 1, 1996 Mr. Ashcroft telephoned Western's Chairman to
inform him of a proposed transaction with Republic Industries, Inc.
("Republic") pursuant to which Republic was to enter into an amalgamation with
ADT (the "Republic Merger"). On July 12, the Western Schedule 13D was amended
to indicate that Western might determine to oppose the Republic Merger and
might choose to exercise its appraisal rights under Bermuda law, although no
final decision had yet been taken. On September 13, the Western Schedule 13D
was amended to indicate that Western had determined to oppose the Republic
Merger. Termination of the Republic Merger was announced on September 30,
1996.
On December 18, 1996 Western notified the Company of its
intention to file with the SEC a preliminary prospectus for an offer, by
Western, of $7.50 net in cash and a number of shares of Western common stock
valued at a maximum of $15 (depending on a pricing formula) in exchange for
each of the Common Shares. On December 18, 1996, Western filed a notice on
ADT to requisition a Special General Meeting of the Company's shareholders to
consider the Western Proposals. Western has stated that the purpose of the
Western Proposals is to facilitate consummation of the Western Offer. If it
obtains control of the Board of Directors, Western has stated that its
directors intend to eliminate the protections for shareholders contained in
the Company's Bye-Laws and a Shareholder Rights Plan dated as of November 6,
1996 (the "Rights Plan"). The Board believes Western's attempt to complete
its offer in this manner is not in the best interests of ADT shareholders. On
January 7, 1997 the Company sent the letter to the holders of its Common Shares
that is set forth as Schedule B hereto.
Why You Should Vote Against the Western Proposals
Shareholders Should Maintain a Board That Is Independent from Western
The Board believes that the interests of the Company and all of
its shareholders will be best served by retaining the Company's current
directors (the "Directors"), who will act on behalf of the Company and all of
its shareholders independently of the interests of Western. The Western
Proposals are part of Western's unsolicited attempt to obtain control of your
Company and complete its offer to acquire your Company. If the Directors are
removed and replaced with two of Western's own senior officers, the Board
believes Western's nominees will act in a manner which will serve the
interests of their employer, Western. Your Board believes Western's interests
are to acquire the Company at the lowest possible cost to Western and at the
lowest possible price to the Company's shareholders. This is directly
contrary to your interests as shareholders of the Company. Your Board urges
you to protect the Company and your interests by voting AGAINST the Western
Proposals.
Your Board recognizes its fiduciary obligations with respect to
any potential transaction involving the Company. As demonstrated by the
proposed Republic Merger, your Board is open to a transaction which provides
fair and adequate consideration to the Company's shareholders. In this
regard, the Board will consider all bona fide offers presented to it
(including one by Western) and may recommend a proposal if it reflects the
full and fair value of the Company, including its favorable prospects going
forward.
Western's Effort to Elect Its Senior Officers to Run ADT Is Coercive and
Premature
Your Board believes that Western's effort to have its own
senior officers elected to run ADT is designed to coerce you and your Company
into taking actions that are not in your best interests. Election of
Western's nominees is not contingent on Western completing its offer or any
subsequent amalgamation. If Western's nominees are elected, Western will
still retain all of the rights it currently has to terminate its highly
conditioned offer or to amend its offer in any respect. In effect Western is
asking you to appoint its own representatives to determine whether, and on
what terms, your Company will be sold to Western.
Western's offer is subject to numerous conditions, many of
which are subject to Western's sole discretion and a number of which ADT
believes have a high risk of not being fulfilled. In addition to these
conditions, Western has made no commitment to complete the subsequent
amalgamation but has merely stated its current intention to do so. In light
of these conditions and Western's vague "intention" to complete the subsequent
amalgamation, ADT believes that Western's efforts to replace the existing ADT
Board with Western's nominees is designed to coerce shareholders to accept the
Western Offer rather than risk becoming minority shareholders in a company
controlled by Western.
Your Board's Preliminary View Is That the Western Offer Is Inadequate
Because of the limited time since announcement of the Western
Offer and the limited information presently available, your Board has not
reached a definitive decision with respect to the Western Offer. However, you
should be aware that the Board's preliminary view, based on this limited
information, is that the Western Offer is inadequate.
The reactions of a number of independent commentators support
your Board's preliminary view of the Western Offer. For example, The Wall
Street Journal recently described the Western Offer as providing "a
shockingly low premium to ADT shareholders."(1) In addition, one analyst
stated, "After studying the hostile offer for ADT Ltd. by Western
Resources we conclude that the bid is too dependent on paper--whose
value is ultimately too uncertain--and that that bid is woefully too
low."(2)
Western has filed certain disclosure documents for its offer
with the SEC. In your Board's view, these documents are incomplete and
contain a number of statements which appear to be misleading. Most
importantly, because Western is in the process of several major proposed
acquisitions and dispositions and is seeking to pay most of its offer price
in Western common stock, your Board does not believe that ADT's
shareholders can meaningfully evaluate, on the basis of Western's
disclosure, the value or quality of the stock Western is proposing to
exchange for the Common Shares.
Western Is Not a Strong Strategic Partner for ADT
Western has argued that an amalgamation with ADT will benefit
ADT shareholders by combining "ADT's leading international presence and
quality brand equity in the security business" with Western's "fast-growing
security business, strong core utility business and customer service
expertise."(3)
__________
(1) Quote taken from an article by Steven Lipin in The Wall Street Journal
dated December 31, 1996. No permission has been sought or received to
quote from, or refer to, published materials cited in this proxy
statement.
(2) Quote taken from a Lehman Brothers report by Jeff Kessler dated December
20, 1996.
(3) Quote taken from page 3 of Western's Registration Statement on Form S-4
dated December 18, 1996.
We understand why shareholders of a slow-growth Kansas utility
would benefit by trying to acquire a high-growth, international electronic
security services company such as ADT. ADT believes that Western faces
significant competitive challenges in its core utility business because
utility deregulation may soon allow more efficient utility providers an
opportunity to expand into Western's geographic markets by delivering
lower-cost commodity products. In light of these significant risks to its
core business, it is natural for Western to seek "differentiators" such as
electronic security services to make its existing products more attractive.
Your Board does not accept Western's unsupported assertion that
ADT shareholders would benefit from a merger with Western. Western has
offered no support for the notion that ADT's nationwide customer base would
have any interest in buying electric power from a Kansas utility. While
Western's electronic security business would obviously benefit from a
combination with ADT's much larger and more established security business,
your Board believes that a combination with Western would offer no significant
strategic opportunity to your Company. Even after Western's recent
acquisition of the assets of Westinghouse Security Systems, Inc., Western's
security business is currently less than one-seventh the size of ADT's
security business on the basis of annual recurring revenue from monitoring and
maintenance. ADT certainly does not perceive the industrial logic of
marketing its electronic security services to Western's customers in Kansas.
In fact, if ADT were to look for a strong North American
partner, in ADT's view, Western does not possess the key characteristics which
ADT would consider to be most important in identifying such a partner, namely
regional and market positioning, range of services, favorable cost structure
and prospects for nationwide services coverage.
Western's "Business Opportunities" Argument Is Unsupported
ADT believes that its ability to capitalize on a range of
growth opportunities currently available to ADT would be impaired by an
amalgamation with Western. ADT believes that because of the success of its
sales and marketing efforts since 1988, it is uniquely positioned to benefit
from the range of technological developments that are expanding and
diversifying the types of services that ADT is able to offer. Since 1988, ADT
has enjoyed a compound growth rate in excess of 36 per cent for new
residential unit sales. ADT now provides electronic security and related
services to more than 1 million residential customers across North America and
believes that in 1996, through its various channels of distribution, ADT
installed a number of new residential security systems that is greater than
the entire residential customer base of any of its competitors, including
Westinghouse Security Systems, Inc. While Western points to the "fast growth"
of its security business, ADT believes that Western has achieved that growth
primarily through acquisitions at a cost far in excess of ADT's cost of
developing new customers through internally generated growth.
During the past several years, ADT's business is evolving from
being primarily an intrusion alarm company into a data information company.
ADT believes that its ability to take full advantage of this evolution depends
on ADT's preserving its flexibility to access a whole range of new
technologies. For example, by combining basic security services with other
services, ADT has, in the past few years, been offering energy management
products and services to regulate the temperature and lighting of a customer's
premises. This service has been achieved through use of a communication
protocol which utilizes the premises' existing alternating-current wiring.
Another creative use of new technologies has permitted ADT to launch CarCop
[Registered](4), a revolutionary new concept in personal protection and
vehicle security. CarCop [Registered] uses three significant infrastructures:
cellular communications, the global positioning satellite system and ADT's
24-hour a day monitoring facilities.
__________
(4) [Registered] Registered Trademark
ADT believes that its broad customer base and its unique
national distribution system and highly skilled workforce provide it with a
strong capacity to exploit these new technologies, but only if it can
maintain the freedom to choose the best technology partners for various
possible services. Given the rapid pace of technological change, ADT
anticipates that it will explore partnering opportunities with premier
companies in a variety of industries, which include local and long distance
communications providers, consumer electronics manufacturers, software
developers, newspaper and entertainment companies, insurance underwriters
and property-management service providers. ADT believes that its ability
to negotiate competitive arrangements with such companies--and thereby take
best advantage of its existing customer and service base--would be impaired
if it were owned by a single utility provider such as Western.
Western argues that its "sound utility expertise" will give the
combined entity a competitive advantage. Yet ADT has little to learn from
Western in the way of managing a national distribution system and
highly-skilled workforce. ADT currently operates 231 sales and service
offices which perform more than 7,000 on-site customer service visits and
handle in excess of 105,000 telephone interactions with customers each day.
ADT is the only provider who can supply technical services on multiple types
of electronic security systems and related products in every major
metropolitan statistical area in North America and the United Kingdom. Unlike
utility service providers, ADT's work force has experience in actually
providing services inside the customer's premises.
Western Is a Heavily Regulated Utility
Western is primarily a utility that is heavily regulated by the
Kansas Corporation Commission and the Federal Energy Regulatory Commission.
Western currently has a 47 per cent interest in Wolf Creek Nuclear Operating
Corporation, an operating company for a nuclear power plant, which is
regulated by the Nuclear Regulatory Commission, and if Western completes its
proposed acquisition of Kansas City Power & Light, Western will double its
investment in Wolf Creek to a 94 per cent interest thus doubling its exposure
to nuclear power issues. The Western Offer is conditioned, among other
things, on a determination that Western will not be subject to the Public
Utility Holding Company Act of 1935. Western has not demonstrated that its
heavily regulated business will not adversely affect the unregulated, higher
growth business of ADT.
Western Has Failed to Address How It Will Refinance ADT's Borrowings and
Ongoing Business Growth
ADT, through its subsidiary ADT Operations, Inc., had
outstanding $544 million principal amount of public debt and, as of December
31, 1996, had utilized approximately $164 million under a credit agreement.
In addition, ADT is in the process of finalizing a Pound Sterling90 million
credit agreement for the benefit of its UK group. The holders of ADT's public
debt and the lenders under these credit agreements have the right to
accelerate all of this indebtedness if there is a change of control of ADT.
While Western has acknowledged that either adoption of the Western Proposals
or consummation of the Western Offer would trigger a change of control under
this indebtedness, Western has made no attempt to address how it expects to
refinance this indebtedness.
In addition, ADT believes that the realization of Western's
alleged growth strategy for the combined company would likely require very
significant capital investment. Western has failed to describe how it would
be able to finance the continued growth of the business.
Western Has Not Addressed How It Will Manage ADT's Business
Western is attempting to remove all of the Directors of ADT,
which include its Chief Executive Officer and its Chief Financial Officer and
President of ADT Security Services, Inc., and replace them with two of
Western's nominees. Western has not, however, explained to ADT shareholders
how these nominees will go about performing their wide-ranging duties to manage
ADT's ongoing businesses nor has Western given ADT shareholders any meaningful
information on the experience or qualifications of these nominees to manage
the operations of an international company such as ADT. ADT has a highly
significant and fast-growing residential electronic security services
business. The majority of ADT's revenues, however, are derived from its
long-established commercial business, the characteristics of which are far
more complex than those of the residential security businesses presently
operated by Western.
Certain Litigation Against the Company
On December 18, 1996, Westar Capital, Inc. ("WCI"), a
subsidiary of Western, filed a lawsuit in the U.S. District Court for the
Southern District of Florida (the "Court") against the Company, the
directors of the Company, and Republic. The complaint alleges that the
Company and its directors breached their fiduciary duties to the Company
and its shareholders (i) by issuing a warrant to Republic (the "Republic
Warrant") in connection with the proposed Republic Merger, (ii) by adopting
the Company's Rights Plan, and (iii) by keeping shares of the Company in
one of the Company's subsidiaries with the intention of voting those shares
as needed to entrench existing management. The complaint seeks a court
order (i) declaring the Republic Warrant null and void or preventing the
Company and Republic from exercising their rights under the Republic
Warrant, (ii) directing the Company to redeem the Rights Plan, (iii)
preventing the Company from voting the Common Shares held by its
subsidiary. On December 23, 1996, the Court entered an order dismissing
the complaint without prejudice on the grounds that the complaint contained
inadequate and improper allegations relating to the Court's jurisdiction
over the case.
On December 27, 1996, WCI filed a second complaint with the
Court which contains modified allegations relating to the Court's jurisdiction
and identical substantive allegations as the prior complaint. On January 3,
1997, WCI filed an amended complaint which, in addition to the allegations
made in the prior complaints, alleges that ADT has attempted to interfere with
WCI's voting rights by seeking certain information from WCI pursuant to
procedures established in ADT's Bye-Laws. The amended complaint seeks the
same relief as the prior complaints and also requests that the Court confirm
WCI's voting rights. The Company and the Board believe that Western's amended
complaint is also deficient and intends to seek a final dismissal of Western's
case. The Company and the Board also believe that the allegations in
Western's amended complaint are without merit.
On December 26, 1996, Charles Gachot filed a complaint in the
Circuit Court for the Fifteenth Judicial Circuit in Palm Beach County, Florida
against ADT, certain directors of ADT, Western Resources, Inc. and WCI. The
complaint is brought on behalf of a class of all shareholders of ADT and
alleges that Western Resources, Inc. and WCI have breached their fiduciary
duties to ADT's shareholders by offering an inadequate price for the
outstanding Common Shares. The complaint seeks to enjoin Western Resources,
Inc. and WCI from acquiring the outstanding Common Shares. The complaint also
alleges that ADT and its directors have refused to negotiate with Western
Resources, Inc. and WCI and that the Republic Warrant and the Rights Plan are
improper. The complaint seeks unspecified monetary relief from all
defendants.
Matters to Be Voted upon at the Special General Meeting
The Western Proposals
Western has presented the following resolutions for
consideration at the Special General Meeting:
Proposal 1. The Western Removal Proposal.
1. RESOLVED, that subject to Resolutions 2 and 3 below being
passed all of the present members of the Board of Directors of the Company
(the "Board") and any other person who may be a director of the Company at the
time of the Meeting be and are hereby removed from the office of director.
Proposal 2. The Western Reduction Proposal.
2. RESOLVED, FURTHER, that the number of seats on the Board from
and after the date of this resolution shall be two (2).
Proposal 3. The Western Election Proposal.
3. RESOLVED, FINALLY, that the directors of the Company from and
after the date of this resolution until the next annual general meeting of the
Company or until their successors have been duly elected shall be Steven L.
Kitchen and Steven A. Millstein, or if either is unable to serve as a director
of the Company due to death, disability or otherwise, any other person
designated as a director nominee by Westar Capital, Inc.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "AGAINST"
EACH OF THE WESTERN PROPOSALS.
General
Outstanding Voting Shares
Notice of the Special General Meeting has been sent to all
holders of record of the Common Shares at the close of business on January 3,
1997, which has been fixed as the record date for notice of the Special
General Meeting. Except as provided in the Bye-Laws of the Company, all
holders of record of the Common Shares on the date of the Special General
Meeting will be entitled to attend, and vote at, the Special General Meeting.
Outstanding and entitled to vote, as of December 31, 1996, were 141,382,697
Common Shares, including 3,182,787 Common Shares owned by a subsidiary of the
Company. Except as set forth above, all of such Common Shares are entitled to
vote at the Special General Meeting and, on a poll, each Common Share is
entitled to one vote on each matter.
Vote Required
Common Shares will vote together as a single class with respect
to the Western Proposals. The affirmative vote of the majority of Common
Shares present and voting at the Special General Meeting is required for the
approval of any proposal.
Pursuant to Bermuda law, only votes cast for a matter
constitute affirmative votes. Votes withheld or abstaining from voting are
counted for quorum purposes only. At the Special General Meeting not less
than two holders of Common Shares present in person or by proxy shall form a
quorum for the transaction of business and if a quorum does not assemble
within half an hour after the time appointed for the Special General Meeting,
the Special General Meeting shall be dissolved.
Voting Your Proxy
Your Board is soliciting proxies for the Special General
Meeting AGAINST the Western Proposals.
Shares represented by such properly executed proxies will be
voted as directed therein on any poll that may be called for. In the event of
a poll being called for, and in the absence of direction from a shareholder,
proxies held by Michael A. Ashcroft, Stephen J. Ruzika or [John D. Campbell]
will be voted AGAINST the Western Proposals. You may revoke your proxy by
giving written notice of revocation to the Secretary of the Company at any
time before it is voted, by submitting a later-dated proxy or by attending the
Special General Meeting and voting your shares in person.
A form of proxy is enclosed with this document. You are
requested to complete and return this as soon as possible. In order to be
valid, all forms of proxy for the Special General Meeting must be completed in
accordance with the instructions on them and received by the times and dates
set forth below at any of the offices of the Company's registrars, whose names
and addresses are set out below:
In the United States:
by on July 7, 1997 (Eastern Standard Time) at:
Citibank - WWSS - Investor Services
c/o Citicorp Data Distribution, Inc.
P.O. Box 1429
Paramus, New Jersey 07653-9939, U.S.A.
In the United Kingdom:
by on July 7, 1997 (British Summer Time) at:
Citibank N.A., c/o Independent Registrars Group
Balfour House, High Road
Ilford, Essex IG1 1NQ
United Kingdom
In Bermuda:
by on July 7, 1997 (Bermuda Time) at:
AS&K Services Limited
P.O. Box HM 1179
Hamilton HM EX
Bermuda
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information, with
respect to beneficial ownership (determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934, as amended) of Common Shares (i) as
at December 31, 1996 by any person known by the Company to beneficially own
more than five per cent of the outstanding Common Shares and (ii) as at
December 31, 1996, by (a) all directors of the Company, (b) the named
directors and officers of the Company, including three executive officers of
subsidiaries of the Company and (c) all directors and executive officers of
the Company as a group. An asterisk indicates ownership of less than one per
cent of outstanding Common Shares.
Number of
Name of Beneficial Owner Common Shares Per cent of
or Identity of Group Beneficially Owned(1), (2) Class(3)
- ------------------------ -------------------------- -----------
Westar Capital, Inc. (4) 38,287,111 27.7%
818 Kansas Avenue
Topeka, Kansas 66601
M.A. Ashcroft(5) 11,075,718 7.5%
J.E. Danneberg 102 *
R.A. Gross 2,000 *
A.B. Henderson 621 *
R.G. Lakey 15,000 *
J.S. Pasman, Jr. 2,000 *
M.J. Richardson 282,837 *
S.J. Ruzika 1,157,405 *
W.P. Slusser 2,800 *
W.W. Stinson 3,010 *
R.S. Troubh 2,500 *
All directors and executive
officers as a group, 11 persons 12,543,993 8.4%
__________
(1) Includes Common Shares which may be acquired upon exercise of the
following number of options to purchase Common Shares from the Company
exercisable on or within 60 days of December 31, 1996 held by the
following persons: M.A. Ashcroft, 9,700,000; R.A. Gross, nil; R.G.
Lakey, 15,000; M.J. Richardson, 270,000 and S.J. Ruzika, 1,141,663.
(2) For purposes of this table, a person or group of persons is deemed to
have "beneficial ownership" of any Common Shares which such person has
the right to acquire on or within 60 days after December 31, 1996. For
purposes of computing the percentage of outstanding Common Shares held
by each person or group of persons named above, any security which such
person or persons has or have the right to acquire on or within 60 days
after December 31, 1996 is deemed to be outstanding, but is not deemed
to be outstanding for the purpose of computing the percentage ownership
of any other person.
(3) Based upon Common Shares outstanding on December 31, 1996, but excluding
3,182,787 Common Shares owned by a subsidiary of the Company.
(4) The Company has received an Amendment No. 9 to Schedule 13D dated
December 18, 1996 filed with the SEC by Westar Capital, Inc. a wholly
owned subsidiary of Western Resources, Inc., in respect of ownership of
38,287,111 Common Shares. The Company has not attempted to
independently verify any of the information contained in the Schedule
13D.
(5) The number of Common Shares beneficially owned by Mr. Ashcroft includes
718 Common Shares owned by Mr. Ashcroft's wife.
Directors and Executive Officers
Set forth below are the names, ages, positions and certain
other information concerning the current directors and executive officers of
the Company and three executive officers of subsidiaries of the Company as at
December 31, 1996.
Name Age Position with Company
- ---- --- ---------------------
Michael A. Ashcroft 50 Chairman of the Board; Chief Executive
Officer
John E. Danneberg 50 Director
Raymond A. Gross 47 Senior Vice President of ADT Security
Services, Inc.
Alan B. Henderson 63 Director
Ronnie G. Lakey 42 Director of ADT (UK) Holdings PLC
James S. Pasman, Jr. 66 Director
Michael J. Richardson 60 President and Chief Executive Officer of
ADT Automotive, Inc.
Stephen J. Ruzika 41 Chief Financial Officer; Executive Vice
President; Director
W. Peter Slusser 67 Director
William W. Stinson 63 Director
Raymond S. Troubh 70 Director
- ----------
Mr. Ashcroft has been Chairman and Chief Executive Officer of
the Company since 1984 and is Chairman of the Executive Committee. He was
Chairman and Chief Executive Officer of the Company's predecessor company,
Hawley Group PLC from 1977 to 1984. He is the non-executive Chairman of BHI
Corporation.
Mr. Danneberg has been a director of the Company since December
1991 and was previously a director of the Company from 1984 to June 1991. He
was the President of Foliage Plant Systems, Inc., an interior landscape
contractor, from 1988 to October 1995.
Mr. Gross has been a Senior Vice President of ADT Security
Services, Inc. since March 1, 1996. From August 1993, he was President and
Chief Executive Officer of Alert Centre, Inc. which was acquired by ADT in
December 1995, and prior to that he was President/General Manager of Cellular
One of Ohio from November 1988.
Mr. Henderson has been a director of the Company since 1992 and
is a member of the Audit and Remuneration Committees. He is Chairman of
Ranger Oil (UK) Limited, an oil exploration and production company, and has
been a director of Ranger Oil (UK) Limited since 1972. He is also Chairman of
Abtrust Emerging Economies Investment Trust Plc and Abtrust New Thai Investment
Trust Plc, and is a director of Abtrust New Dawn Investment Trust Plc, Energy
Capital Investment Company PLC and Greenfriar Investment Company PLC.
Mr. Lakey has been a director of ADT (UK) Holdings PLC since
its incorporation in 1996. He has operational responsibility for the
Company's electronic security services operations in Canada and Europe. He
has held various positions with the Company since joining in 1987.
Mr. Pasman has been a director of the Company since 1992 and is
a member of the Audit and Remuneration Committees. He was President and Chief
Operating Officer of National Intergroup, Inc., an industrial holding company,
from 1989 to 1991 and was Chairman and Chief Executive Officer of Kaiser
Aluminum and Chemical Corp., an aluminum and chemical company, from 1987 to
1989. He is a director of BEA Income Fund, Inc., BEA Strategic Income Fund,
Inc. and BT Insurance Funds Trust.
Mr. Richardson has been the President and Chief Executive
Officer of ADT Automotive, Inc., which supervises the United States vehicle
auction services business, since 1982.
Mr. Ruzika has been a director and Executive Vice President of
the Company since 1987, has been Chief Financial Officer since 1989 and
President of ADT Security Services, Inc. since 1996. He is a member of the
Executive Committee. He was previously Chief Financial Officer of the
Company's United States operations. He is also a non-executive director of
BHI Corporation.
Mr. Slusser has been a director of the Company since 1992 and
is a member of the Audit and Remuneration Committees. He has been the
President of Slusser Associates, Inc., a private investment banking firm in
New York City, since 1988 and was previously a managing director and head of
mergers and acquisitions at PaineWebber Incorporated. He is a director of
Ampex Corporation, a leading producer of high performance television and data
storage recording systems.
Mr. Stinson has been a director of the Company since 1991. He
retired as Chairman and Chief Executive Officer of Canadian Pacific Limited in
1996 after serving as Chief Executive Officer for 11 years. He remains a
director of that company. He is also a director of Laidlaw, Inc., Western
Star Trucks Inc., Sun Life Assurance Company of Canada, and a number of other
corporations.
Mr. Troubh has been a director of the Company since 1991 and is
a member of the Audit and Remuneration Committees. He has been an independent
financial consultant since 1974. He is a director of America West Airlines,
Inc., Applied Power Inc., ARIAD Pharmaceuticals, Inc., Becton, Dickinson and
Company, Diamond Offshore Drilling, Inc., Foundation Health Corporation,
General American Investors Company, Inc., Olsten Corporation, Petrie Stores
Corporation, Time Warner Inc., Triarc Companies, Inc. and WHX Corporation.
Each director is currently serving a term which expires at the
next Annual General Meeting. Each such director is eligible for re-election.
Under the Bye-Laws of the Company, no person other than a director retiring at
a General Meeting of the Company shall, unless recommended by the directors,
be eligible for election to the office of director unless, between six and 28
days before the meeting date, the Secretary of the Company has been given, by
a shareholder of the Company (other than the person to be proposed) entitled
to attend and vote at the Annual General Meeting or Special General Meeting,
written notice of his intention to propose such person for election and also
written notice, signed by the person to be proposed, of his willingness to be
elected. A director may hold any other office or position of profit under the
Company (other than the office of Auditor) in conjunction with this office of
director for such period and on such terms as the Company may from time to
time determine in general meeting.
Meetings and Committees of the Board
During 1996, there were eleven meetings of the Board of
Directors. All directors attended at least 75 per cent of the meetings of the
Board and of the committees of which they were members.
The Board has several committees, including an Audit Committee
and a Remuneration Committee. The Audit Committee, formed in 1991, and the
Remuneration Committee, formed in 1992, each consist entirely of independent
directors. During 1996, there were four meetings of the Audit Committee and
four meetings of the Remuneration Committee. The function of the Audit
Committee is to review the services performed by the Company's independent
accountants and to review and act or report to the Board of Directors with
respect to the scope of audit procedures and accounting practices. The
function of the Remuneration Committee is to review and approve compensation
and other employment benefits afforded certain executive officers. The
Company has no standing nominating committee.
Compensation of Directors
Directors who are not employees of the Company are paid an
annual director's fee of $25,000 each and are reimbursed for reasonable and
customary travel and other expenses incurred in performing their duties. In
addition, Messrs. Henderson, Pasman, Slusser and Troubh are each paid an
annual sum of $15,000 for their services on the Audit and Remuneration
Committees.
Executive Compensation
Summary Compensation Table
Shown below is information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal
years ended December 31, 1996, 1995 and 1994, of those persons who were, at
December 31, 1996 (i) the Chief Executive Officer and (ii) the other four most
highly compensated executive officers of the Company, including three
executive officers of a subsidiaries of the Company (the "Named Officers").(*)
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation(1) Awards
Stock Option All Other
Name and principal position Year Salary Bonus Grants Compensation
- --------------------------- ---- ---------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Michael A. Ashcroft(2) 1996 $1,143,844 (2) 5,000,000 (3)
Chairman of the Board; Chief
Executive Officer
1995 $1,089,375 $2,233,219 1,500,000 $1,921,939
1994 $1,037,500 $1,945,313 750,000 $783,403
Raymond A. Gross 1996 $183,353(4) $82,500(5) 100,000 -0-
Senior Vice President of ADT
Security Services, Inc.
1995 -0- -0- -0- -0-
1994 -0- -0- -0- -0-
Ronnie G. Lakey 1996 $248,962 $100,000(6) 100,000 $27,020
Director of ADT (UK) Holdings
PLC
1995 $195,866 $140,000 20,000 $14,822
1994 $188,827 $135,000 25,000 $14,138
Michael J. Richardson(7) 1996 $335,000 $100,847(8) 40,000 $6,461(9)
Chief Executive Officer of ADT
Automotive, Inc.
1995 $314,000 $145,245 50,000 $6,461
1994 $300,000 $115,000 45,000 $6,480
Stephen J. Ruzika(10) 1996 $686,306 $1,100,000(11) 208,333 $40,323(12)
Chief Financial Officer;
Executive Vice President;
Director
1995 $653,625 $250,000 500,000 $37,432
1994 $622,500 $200,000 250,000 $35,639
</TABLE>
- --------------
* Certain information for 1996 in the Summary Compensation Table cannot be
calculated at the date of this proxy statement. Such information will
be disclosed in proxy materials for the next fiscal year in the
appropriate column for the fiscal year in which earned.
(1) While officers enjoy certain perquisites, such perquisites did not
exceed the lesser of $50,000 or 10 per cent of each officer's salary and
bonus. A change in control of the Company does not of itself require
the payment of any moneys to any of the Named Officers. However, such
an event does accelerate the vesting of certain pension rights and the
exercisability of certain stock options.
(2) The salary, bonus and all other compensation shown for each year
represent Mr. Ashcroft's entitlement to those amounts for that year
except that Mr. Ashcroft's bonus and other compensation for 1996 has not
yet been calculated. Mr. Ashcroft utilized $2,500,000 of the
compensation due to him for 1995, being the whole of his bonus
entitlement of $2,233,219 and $266,781 of his other compensation to
subscribe for options, at the rate of $2.50 per option, to subscribe for
Common Shares. Mr. Ashcroft also utilized $2,500,000 of the
compensation due to him for 1994, being the whole of his bonus
entitlement of $1,945,313 and $554,687 of his other compensation
entitlement to subscribe for these options.
(3) The other compensation due to Mr. Ashcroft, which is referred to in note
(2) above, represents the US dollar equivalent of a Pounds sterling
amount payable to Mr. Ashcroft in lieu of providing him with retirement
and death benefits under a defined pension plan. The amount payable
attributable to service in 1996 has not yet been calculated as Mr.
Ashcroft's bonus for 1996 has not yet been established, however the
amounts paid for 1995 and 1994 were Pound Sterling1,217,341 and Pound
Sterling511,126, respectively.
(4) Represents salary since joining ADT Security Services, Inc. in March
1996. Mr. Gross's annualized salary for 1996 was $220,000.
(5) Represents the amount of bonus earned by Mr. Gross in the first three
quarters of 1996. The amount for the fourth quarter of 1996 has not yet
been calculated.
(6) Represents part only of the bonus earned by Mr. Lakey in 1996. The
balance of Mr. Lakey's bonus for 1996 has not yet been calculated.
(7) The salary amount shown for 1996 represents Mr. Richardson's entitlement
to salary in the year. Prior to becoming entitled to receive certain
salary, however, Mr. Richardson elected to receive options at the rate
of $2.50 per option, to subscribe for Common Shares at an exercise price
of $8.625 per share, in lieu of receiving $69,444 in salary
(1995-$83,333).
(8) Represents the amount of bonus earned by Mr. Richardson in the first
three quarters of 1996. The amount for the fourth quarter of 1996 has
not yet been calculated.
(9) Represents $4,500 contributed to a defined contribution 401(k) pension
benefit plan and $1,961 which is the aggregate incremental cost to the
Company of providing Mr. Richardson with enhanced group term life
insurance benefits.
(10) The salary amount shown for 1996 represents Mr. Ruzika's entitlement to
salary in the year. Prior to becoming entitled to receive certain
salary, however, Mr. Ruzika elected to receive options at the rate of
$2.50 per option, to subscribe for Common Shares at an exercise price of
$8.625 per share, in lieu of receiving $80,136 in salary (1995 -
$104,167).
(11) Mr. Ruzika earned a bonus for 1996 of $1,100,000 (1995 - $250,000) under
a bonus arrangement by which payments are related directly to the
performance of the Common Share price.
(12) Represents $37,639 contributed to Mr. Ruzika's retirement income plan in
1996 and $2,684 which is the estimated aggregate incremental cost to the
Company of providing Mr. Ruzika with supplemental term life insurance.
Option Grants in Last Fiscal Year
Shown below are all grants of share options to the Named
Officers during the fiscal year ended December 31, 1996. The following table
shows, along with certain information, hypothetical realizable values of share
options granted for the last fiscal year, at assumed rates of cumulative share
price appreciation over the ten-year life of such options. These assumed
rates of appreciation are set by the rules of the SEC and are not intended to
forecast appreciation of the price of the Common Shares. These hypothetical
values have not been discounted to reflect their present values.
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates
of Share Price Appreciation
Individual Grants for Option Term(2)
--------------------------------------------------------------------------- ---------------------------
% of
Total Options Exercise
Granted Market Price or
Options to Employees on Base Price
Name Granted(1) in Fiscal Year Date of Grant ($/share) Expiration Date 5% 10%
- ---- ---------- -------------- ------------- ---------- --------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael A. 5,000,000 78.3% $14.75 $15.00 Aug 4, 2003 $18,468,000 $62,213,000
Ashcroft(2)
Raymond A. Gross 100,000 1.6% $16.375 $16.50 May 6, 2006 $1,017,000 $2,597,000
Ronnie G. Lakey 100,000 1.6% $16.375 $16.50 May 6, 2006 $1,017,000 $2,597,000
Michael J. Richardson 40,000 0.6% $16.375 $16.50 May 6, 2006 $407,000 $1,039,000
Stephen J. Ruzika(2) 208,333 3.3% $14.75 $15.00 April 29, 2004 $931,000 $3,046,000
</TABLE>
__________
(1) Gains are reported net of the option exercise price but before taxes
associated with exercise. These amounts represent certain assumed rates
of appreciation only. Actual gains, if any, on share option exercises
are dependent on the future price performance of the Common Shares as
well as the option holders' continued employment through the vesting
period. The potential realizable values reflected in this table may not
necessarily be achieved.
(2) Mr. Ashcroft and Mr. Ruzika have paid a subscription price for these
options of $2.50 per option. Accordingly, for the purpose of valuing
these options, $2.50 has been added to the exercise price.
Aggregated Option Exercises in Last Fiscal Year and Year-End Option Values
Shown below is information with respect to aggregate option
exercises by the Named Officers in the fiscal year ended December 31, 1996 and
with respect to unexercised options to purchase Common Shares granted in
fiscal 1996 and prior years to the Named Officers and held by them at December
31, 1996.
<TABLE> Value of Unexercised
<CAPTION> Number of Unexercised In-the-Money Options
Shares Acquired on Value Realized on Options at Fiscal Year End at Fiscal Year End(1)(2)
Exercise of Options Exercise of Options --------------------------- ----------------------------
Name in Fiscal Year in Fiscal Year Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------------- ------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael A. Ashcroft 825,000 $6,626,250 9,700,000 1,550,000 $65,937,190 $17,493,125
Raymond A. Gross -0- -0- -0- 100,000 -0- $637,500
Ronnie G. Lakey 32,000 $256,016 15,000 145,000 $208,125 $1,209,375
Michael J. Richardson 45,000 $318,125 270,000 135,000 $3,496,750 $1,441,875
Stephen J. Ruzika 12,000 $54,900 1,141,663 516,670 $12,430,900 $5,831,080
</TABLE>
__________
(1) Based on the closing price of $22.875 per Common Share on December 31,
1996.
(2) Messrs. Ashcroft, Richardson and Ruzika have been granted certain
options for which they have paid a subscription price of $2.50 per
option. Accordingly, for the purpose of valuing these options, $2.50
has been added to the relevant exercise prices.
Certain Defined Benefit Plans
The Company does not maintain any defined benefit or actuarial
retirement plans ("pension plans"). However, Mr. Lakey, Mr. Richardson and Mr.
Ruzika participate in pension plans that are maintained by indirect, wholly
owned subsidiaries of the Company. Certain information is set forth below
regarding the pension plans in which Mr. Lakey, Mr. Richardson and Mr. Ruzika,
as well as other employees of the Company's subsidiaries, participate.
Mr. Richardson is a participant in the ADT Pension Plan
maintained by ADT Group PLC ("ADT Group"). Mr. Richardson is the only Named
Officer who participates in the ADT Group Plan. The ADT Group Plan provides
Mr. Richardson an annual benefit payable for life beginning at age 60. The
annual benefit is equal to 66.7 per cent of base salary for the three years of
the most recent ten years prior to retirement that produce the highest
average. Mr. Richardson's annual benefit payable at age 60 for life is Pound
Sterling146,095. Since Mr. Richardson has already attained age 60, the benefit
payable to him upon his actual retirement will be adjusted based upon his
actual retirement date. Benefits payable under the ADT Group Plan are not
offset by Social Security benefits or any other amounts.
ADT, Inc. maintains a supplemental executive retirement plan
(the "ADT SERP"). Mr. Lakey and Mr. Ruzika are the only Named Officers who
participate in the ADT SERP. Benefits for Mr. Ruzika under the ADT SERP are
also supplemented under a Supplemental Benefit Agreement between Mr. Ruzika
and ADT Management Services Limited (the "Supplemental Benefit Agreement").
The ADT SERP provides benefits to Mr. Lakey for a total of 20
years, beginning at age 60. This annual benefit is equal to 60 per cent of
Mr. Lakey's base salary for the three consecutive years that produce the
highest average. This benefit is reduced by the value of any benefits derived
from employer contributions under any other retirement plan maintained by ADT,
Inc. or its affiliates. Mr. Lakey's estimated annual benefit payable at age
60 for a total of 20 years, net of the estimated offset attributable to
employer contributions under certain defined contribution plans, is $30,764.
The estimated offset is based on the assumption that Mr. Lakey will have 27
years of service at age 60. Benefits are not offset by Social Security
benefits.
The ADT SERP and Supplemental Benefit Agreement together
provide benefits payable to Mr. Ruzika for a total of 20 years beginning at
age 55. This annual benefit is equal to 65 per cent of base salary and
bonuses for the three consecutive years that produce the highest average.
Effective for benefits accrued after December 31, 1994, the benefit is
calculated using base salary including, for this purpose, the purchase price
of any options to purchase the Company's shares received in lieu of base
salary. This benefit is reduced by the value of any benefits derived from
employer contributions under any other retirement plan maintained by ADT, Inc.
or its affiliates. Mr. Ruzika's estimated annual benefit payable at age 55
for a total of 20 years, net of the estimated offset attributable to employer
contributions under certain defined contribution plans, is $361,802. The
estimated offset is based upon the assumption that Mr. Ruzika will have 28
years of service at age 55. Benefits are not offset by Social Security
benefits.
Compliance with Reporting Requirements
The Company believes that, during 1996, all filing requirements
under Section 16(a) of the Securities Exchange Act 1934 applicable to its
officers, directors and beneficial owners of more than 10 per cent of equity
securities were complied with on a timely basis.
Employment Contracts, Termination of Employment and Change in Control
Arrangements
The Company has entered into a written employment agreement
with Mr. Ashcroft, dated as of May 8, 1993. An Amendment to the agreement was
approved on November 4, 1996, which provides that Mr. Ashcroft shall serve as
Chairman of the Board and Chief Executive Officer until March 31, 2000,
subject to renewal for additional two-year terms thereafter. Mr. Ashcroft's
initial base salary was $1,000,000 per annum subject to annual review and
adjustment by the Board but may only be reduced by a maximum of 15 per cent
during the term of the agreement without Mr. Ashcroft's consent. During 1996,
Mr. Ashcroft's base salary was increased to $1,157,625 per annum. Mr.
Ashcroft is also eligible for annual bonus payments based upon an
earnings-per-share target for the Common Shares set each year, subject to a
maximum bonus of $4,000,000. The maximum bonus is payable upon attaining
117.5 per cent of the targeted earnings per share. As a term of the contract,
Mr. Ashcroft was granted options to purchase 1,000,000 Common Shares under the
ADT 1993 Long Term Incentive Plan, with 50 per cent of such options
exercisable at market value on the date of grant, as defined, 25 per cent
exercisable at 110 per cent of market value, and 25 per cent exercisable at
120 per cent of market value, vesting in equal annual installments over a
three-year period commencing one year from the date of grant and exercisable
over a ten-year period. The Company will make annual payments to Mr. Ashcroft
calculated to provide him with retirement and death benefits no less favorable
than if he were a member of ADT Group Plan. Such annual payments will not be
less than $450,000. The Company may terminate the agreement upon Mr.
Ashcroft's death, when Mr. Ashcroft attains the age of 60, if Mr. Ashcroft is
unable to perform his duties for 180 days due to ill heath, accident or
otherwise, if Mr. Ashcroft fails to discharge his duties or engages in conduct
that is materially injurious to the Company, or if Mr. Ashcroft willfully and
continually commits a material breach of the agreement. Mr. Ashcroft may
terminate the agreement upon, among other reasons, a breach by the Company
which breach (except for a material breach) is not cured within 30 days, if he
is removed from his position as Chairman of the Board or his position as Chief
Executive Officer, or if the scope of his duties and responsibilities becomes
inconsistent with his position as an officer of the Company.
Mr. Ashcroft may also terminate the agreement without cause at
any time upon 90 days notice. In the event the agreement is terminated
pursuant to its terms by the Company or without cause by Mr. Ashcroft upon 90
days notice, Mr. Ashcroft will be entitled to the pro rata portion of his base
salary, bonus payment, pension payment and other benefits but will not be
entitled to any additional payments. If the agreement is terminated due to a
disability, Mr. Ashcroft will be entitled to an additional payment equal to
two times his highest base salary. In the event the agreement is terminated
by the Company without cause or by Mr. Ashcroft with cause, Mr. Ashcroft will
be entitled to a severance payment equal to two times his highest base salary
and average bonus payment, annual pension payments for the year of termination
and the following two years, and one year of any other benefits previously
provided.
Under the ADT SERP (and, in the case of Mr. Ruzika, the
Supplemental Benefit Agreement), Mr. Ruzika and Mr. Lakey become fully vested
in the accrued benefits thereunder upon a Change of Control (as defined below)
of the Company or ADT, Inc. Mr. Ruzika also becomes fully vested upon a Change
in Control (as defined below) of ADT Management Services Limited. If Mr.
Ruzika or Mr. Lakey's employment is terminated within one year from the date
of a Change of Control, the terminated executive will receive, in lieu of all
other amounts due to him under the ADT SERP (and, in Mr. Ruzika's case, the
Supplemental Benefit Agreement), a lump-sum distribution equal to the present
value of his accrued benefit and an additional amount calculated under a
formula intended to put him in the same after-tax position that he would have
been in if he had received a lump-sum distribution of his accrued benefit on
his normal retirement date. Under this formula Mr. Ruzika would currently
receive an additional amount of approximately $653,295 and Mr. Lakey would
currently receive an additional amount of approximately $54,253.
A "Change of Control" is deemed to have occurred under the ADT
SERP if : (1) any person (other than Laidlaw or its affiliates, collectively
the "Laidlaw Group") acquires more than 40 per cent of the Company's voting
stock (the triggering percentage has been reduced from 40 per cent to 35 per
cent because the Laidlaw Group's beneficial ownership of the Company's voting
stock is less than 20 per cent); (2) the Laidlaw Group becomes the beneficial
owner of more than 45 per cent of the Company's outstanding voting stock; (3)
there is a change of 50 per cent or more in the composition of the Company's
directors during any 3-year period (unless the change in directors was
approved by two thirds of the directors in office at the beginning of such
3-year period or directors who had previously been elected with the requisite
two thirds approval); (4) a person acquires the legal right to direct the
management and policies of the Company (other than by virtue of membership on
the board of directors or a committee of the board); (5) the Company ceases to
own, directly or indirectly through subsidiaries, at least 80 per cent of the
voting stock of ADT, Inc. or (6) the shareholders of either the Company or
ADT, Inc. approve a merger, consolidation or a sale or disposition of all, or
substantially all, of the assets of the Company or ADT, Inc. as the case may
be, with the relevant company not surviving. In the case of Mr. Ruzika, the
provisions of (4), (5), and (6) above include a change in the ownership of ADT
Management Services Limited (as well as the Company or ADT, Inc.).
Mr. Richardson entered into an employment agreement with ADT
Automotive Holdings, Inc., the corporate parent of ADT Automotive, Inc., as of
November 30, 1993. The agreement provides that Mr. Richardson will serve as
Chief Executive Officer of ADT Automotive Holdings, Inc. and its subsidiaries
from December 1, 1993 until July 31, 1996, subject to renewal for additional
one-year terms thereafter. The agreement was renewed on a year-to-year basis
as of July 31, 1996. Mr. Richardson's initial annual base salary will be
$300,000 and will be subject to annual review for possible increases. Mr.
Richardson will also be eligible for annual bonus payments at the discretion
of the Company. The termination provisions of this agreement include a term
to the effect that, in the event that agreement is terminated by ADT
Automotive Holdings, Inc. without cause or by Mr. Richardson with cause, Mr.
Richardson will be entitled to receive his base salary and certain fringe
benefits for two years or the remaining term of the agreement, whichever is
longer.
In 1996, the Remuneration Committee of the Board resolved to
increase the subscription price and size of certain share options held by Mr.
Ashcroft and Mr. Ruzika. In 1993, Mr. Ashcroft and Mr. Ruzika were granted
options to subscribe for 3,000,000 and 125,000 Common Shares respectively at
an exercise price of $8.625 per share for which each was required to pay $2.50
per option, representing a total payment of $7,500,000 and $312,500
respectively, as a condition of vesting. In 1996, the exercise price of these
options was increased to $15 and the number of related shares was increased to
8,000,000 and 333,333 respectively. All the other terms and conditions
remained unchanged. These changes were approved by the shareholders of the
Company. At the time that the Remuneration Committee approved these changes,
the closing price of the Common Shares was $14.75. In November 1996, the
Remuneration Committee resolved that the options of Mr. Ashcroft be
transferable and, at the same time, in return, Mr. Ashcroft agreed to extend
the termination date of his employment agreement from March 31, 1998 to March
31, 2000.
In November 1996, the Remuneration Committee also approved a
bonus plan under which Mr. Ruzika is to receive a bonus of $200,000 when the
Common Share price exceeds $21.00 for a continuous period of 30 trading days
and $200,000 each time the Common Share price exceeds by $1.00 for a
continuous period of 30 trading days the share price level at which a bonus
payment was previously made. The plan is due to expire in 2001 or such
earlier date as the Common Share price exceeds $30.00 for a continuous period
of 30 trading days. Should the share price exceed $30.00 within two and one
half years, Mr. Ruzika will receive an additional payment of $1,000,000.
Other Business
The Company's management does not know of any other matter to
be presented for action at the Special General Meeting.
Miscellaneous
Solicitation of Proxies
The costs of this solicitation of proxies will be borne by the
Company. While no precise estimate of this cost can be made at the present
time, the Company currently estimates that it will spend a total of
approximately $ for its solicitation of proxies, including expenditures
for attorneys, solicitors, and public relations advisors and advertising,
pricing, transportation, litigation and related expenses, but excluding the
salaries and wages for regular employees and officers and the normal expenses
of an uncontested proxy solicitation for the election of directors. As of
January , 1997 the Company has incurred proxy solicitation expenses of
approximately $ excluding costs normally expended for a solicitation
for an election of directors in the absence of a contest and excluding costs
represented by salaries and wages of regular employees and officers.
In addition to the use of the mails, certain directors,
officers or employees of the Company may solicit proxies by telephone,
telecopy or personal contact. The Company will pay for the cost of these
solicitations, but these individuals will receive no additional compensation
for these solicitation services. The Company has retained D.F. King & Co.,
Inc. at estimated fees of not more than $ in the aggregate, plus
reasonable out-of-pocket expenses, to participate in the solicitation of
proxies and revocations. The Company also has agreed to indemnify D.F. King &
Co., Inc. against certain liabilities and expenses. The Company estimates
that approximately employees of D.F. King & Co., Inc. will be involved
in the solicitation of proxies on behalf of the Company. The Company will
also reimburse brokers, fiduciaries, custodians and other nominees, as well as
persons holding stock for others who have the right to give voting
instructions, for reasonable out-of-pocket expenses incurred in forwarding
this proxy statement and related materials to, and obtaining instructions or
authorizations relating to such materials from, beneficial owners of the
Company's capital stock.
Shareholder Proposals for 1997 Annual General Meeting
Shareholder proposals intended to be considered for action at
the 1997 Annual General Meeting were required to have been received by the
Secretary of the Company on or before November 16, 1996 for review and
consideration for inclusion in the proxy statement and form of proxy relating
to such meeting.
Absence of Appraisal Rights
ADT Shareholders do not have appraisal rights with respect to
the matters to be voted on at the Special General Meeting.
If the proposed amalgamation with Western (the "Amalgamation")
were proposed and submitted to a vote by ADT shareholders, pursuant to Section
106(6) of the Companies Act, a registered holder of Common Shares who does not
vote in favor of the Amalgamation, and who is not satisfied that he or she has
been offered fair value for his or her Common Shares, may, within one month of
the giving of the notice of the general meeting of ADT shareholders, apply to
the Supreme Court of Bermuda (the "Supreme Court") to have the fair value of
such Common Shares appraised by the Supreme Court.
Western has stated that it intends to condition the
Amalgamation upon, among other things, holders of not more than 5 per cent of
the outstanding Common Shares having perfected appraisal rights with respect
to the Amalgamation.
Registered and Principal Executive Offices
The registered and principal executive offices of the Company
are located at Cedar House, 41 Cedar Avenue, Hamilton HM 12, Bermuda. The
telephone number there is 441-295-2244. The executive offices of the
subsidiary which supervises the Company's North American activities are
located in the United States at One Boca Place, 2255 Glades Road, Suite 421A,
Boca Raton, Florida 33431. The telephone number there is 561-997-8406.
Bermuda, , 1997
JOHN D. CAMPBELL, Secretary
SCHEDULE A
Because of the nature of the proposals which are to be brought
before the Special General Meeting, the rules of the Securities and Exchange
Commission (the "SEC") require the Company to make available to its
shareholders certain additional information with respect to "participants" (as
such term is defined in Rule 14a-11(b) promulgated under the Exchange Act) in
the Board's solicitation. Pursuant to the rules of the SEC, the persons named
below together with the Directors set forth in this proxy statement under the
heading "Directors and Executive Officers" may be deemed to be participants
(each, a "Participant" and collectively, the "Participants") in the
solicitation by the Board of Directors in opposition to the proposals by
Western to be made at the Special General Meeting and in opposition to the
nominees proposed by Western at the Special General Meeting. As such, set
forth below is certain information required pursuant to the rules of the SEC
with respect to Participants in such solicitation.
[TO COME]
SCHEDULE B
January 7, 1997 ADT LOGO
To the Common Shareholders
Dear Shareholders
Special General Meeting and Offer by Western Resources, Inc.
On December 18, 1996, Western Resources, Inc. ("Western") announced that
it proposed to make an unsolicited offer to attempt to acquire all the
shares in ADT Limited (the "Company") not already owned by Western and its
affiliates. The proposed offer (the "Western Offer") would be on terms
that shareholders would receive, in a taxable and highly conditioned
transaction, US$7.50 in cash and Western common stock valued at a maximum
of US$15.00 (depending on the value of Western common stock at the time of
the Western Offer) in exchange for each common share in the Company.
The text of a press release issued by the Company on December 18, 1996 is
set out below for your information.
Due to the limited time since the announcement of the Western Offer and the
limited information presently available, your Board has not reached a
definitive decision with respect to the Western Offer. However, you should
be aware that the Board's preliminary view, based on this limited
information, is that the Western Offer is inadequate.
Simultaneously with announcing the Western Offer, a subsidiary of Western
(holding more than 10 per cent of all the issued common shares of the
Company) requisitioned a Special General Meeting of the Company for the
purpose of considering resolutions to remove the entire board of directors,
including all of the independent directors, and replace them with two of
their own nominees (being employees or officers of Western). Western has
left no doubt that its objective in precipitating the Special General
Meeting is to obtain control of the Company and have its nominees dismantle
the Company's shareholder protections so that Western can complete its
offer for the shares of the Company.
Under the Companies Act 1981 of Bermuda and the Bye-Laws of the Company,
your Board is obliged to convene a meeting to consider Western's proposals
B-1
and accordingly you will find set out at the back of this letter a notice
convening a Special General Meeting for July 8, 1997.
While it is apparent to your Board that sufficient information is not
presently available to the Board or shareholders generally for them to
reach a definitive decision as to the merits of the Western Offer, the
Board recommends a vote AGAINST the proposals to be considered at the
Special General Meeting based upon the information available at this time.
Your Board expects that Western will in due course publish definitive
documents relating to the Western Offer and to Western and I (on behalf of
your Board) will then write to you explaining your Board's views and the
action which we recommend you to take on the Western Offer.
Your Board has convened the Special General Meeting for July 8, 1997 in the
expectation that this should allow sufficient time for all relevant
information to become available and be circulated to you to enable you to
decide whether or not you wish to accept the Western Offer and how you wish
to vote at the Special General Meeting. If it becomes apparent that all
relevant information is available so as to allow the proposals to be
properly considered at a significantly earlier date, your Board intends to
convene a Separate General Meeting for an earlier date.
Forms of proxy will be sent to shareholders well in advance of the Special
General Meeting.
Shareholders need not take any action in relation to the Western Offer
until we are able to write to you again, which we will do in good time.
Your Board recommends that you do not sign or return any proxy card sent to
you by Western Resources.
Yours sincerely,
/s/ Michael A. Ashcroft
----------------------------------------
Michael A. Ashcroft
Chairman and Chief Executive Officer
CERTAIN ADDITIONAL INFORMATION: ADT Limited (the "Company") will be
soliciting proxies against the proposals of Western Resources, Inc.
(together with its subsidiaries, "Western") and revocations of proxies
previously given to Western for such proposals. The following individuals
may be deemed to be participants in the solicitation of proxies and
revocations of proxies by the Company: ADT Limited, Michael A. Ashcroft,
John E. Danneberg, Alan B. Henderson, James S. Pasman, Jr., Stephen J.
Ruzika, W. Peter Slusser, William W. Stinson, Raymond S. Troubh and Angela
E. Entwistle. As of January 7, 1997, Mr. Ashcroft is the beneficial owner
of 11,075,718 of the Company's common shares, Mr. Danneberg is the
beneficial owner of 102 of the Company's common shares, Mr. Henderson is
the beneficial owner of 621 of the Company's common shares, Mr. Pasman is
the beneficial owner of 2,000 of the Company's common shares, Mr. Ruzika is
the beneficial owner of 1,157,405 of the Company's common shares, Mr.
Slusser is the beneficial owner of 2,800 of the Company's common shares,
Mr. Stinson is the beneficial owner of 3,010 of the Company's common shares,
Mr. Troubh is the beneficial owner of 2,500 of the Company's common shares
and Ms. Entwistle is the beneficial owner of none of the Company's common
shares.
The following is the text of a press release issued by the Company on
December 18, 1996:
ADT ADVISES SHAREHOLDERS TO AWAIT BOARD'S RECOMMENDATION
BEFORE TAKING ACTION ON WESTERN'S UNSOLICITED PROPOSAL
ADT Limited (NYSE: ADT) announced today, in response to Western Resources,
Inc.'s (NYSE: WR) unsolicited proposal, that the Company's Board of
Directors will review the proposal in due course.
ADT stated that shareholders need not take any action at this time with
respect to Western's proposal, and requested that shareholders await the
recommendation of the ADT Board.
ADT is the largest provider of electronic security services in North
America and the United Kingdom, providing continuous monitoring of
commercial and residential security systems to over 1.7 million customers.
ADT is also the second largest provider of vehicle auction services in the
United States, operating a network of 27 vehicle auction centers providing
a comprehensive range of vehicle remarketing services to vehicle dealers
and owners and operators of vehicle fleets.
B-2
ADT LIMITED
NOTICE OF SPECIAL MEETING
Notice is hereby given that a Special General Meeting (the "Meeting") of
ADT Limited (the "Company"), will be held on July 8, 1997 at 9.00 a.m.,
local time, at Cedar House, 41 Cedar Avenue, Hamilton, Bermuda for the
purpose of considering and voting upon the following resolutions:
RESOLUTIONS
1. RESOLVED, that subject to Resolutions 2 and 3 below being passed all of
the present members of the Board of Directors of the Company (the "Board")
and any other person who may be a director of the Company at the time of
the Meeting be and are hereby removed from the office of director;
2. RESOLVED, FURTHER, that the number of seats on the Board from and after
the date of this resolution shall be two (2);
3. RESOLVED, FINALLY, that the directors of the Company from and after the
date of this resolution until the next annual general meeting of the
Company or until their successors have been duly elected shall be Steven L.
Kitchen and Steven A. Millstein, or if either of them is unable to serve
as a director of the Company due to death, disability or otherwise, any
other person designated as a director nominee by Westar Capital, Inc.
By Order of the Board of Directors,
John D. Campbell, Secretary
41 Cedar Avenue
Hamilton HM12
Bermuda
January 7, 1997
B-3
[Front of Proxy Card]
This proxy must be received, at the appropriate address indicated below,
by Citibank N.A., prior to either , (Eastern Standard Time) on July 7, 1997
or (British Summer Time) on July 7, 1997,
or by AS&K Services Limited, prior to (Bermuda time) on July 7, 1997.
Proxy Solicited by ADT Limited, a company organised under the laws of Bermuda,
for the Special General Meeting of Shareholders to be held on July 8, 1997 at
9:00 a.m., Cedar House, 41 Cedar Avenue, Hamilton, Bermuda.
The undersigned, being a holder of common shares, par value $0.10 per share,
of ADT Limited ("ADT"), hereby appoints Michael A. Ashcroft or failing him
Stephen J. Ruzika or failing him John D. Campbell as his proxy at the Special
General Meeting to be held on July 8, 1997 (and any adjournment thereof) and
to vote on behalf of the undersigned (or abstain from voting) as indicated on
the reverse of this card or, to the extent that no such indication is given,
as the proxy determines in his discretion. The Special General Meeting has
been convened to consider proposals (the "Western Proposals") to: (i) remove
all of the present members of the Board of Directors of ADT (the "ADT Board")
and any person or persons elected or designated by any of such directors to
fill any vacancy or newly created directorship, (ii) reduce the number of
seats on the ADT Board to two, and (iii) elect Steven L. Kitchen and Steven A.
Millstein as the directors of ADT or, if either is unable to serve as a
director of ADT due to death, disability or otherwise, any other person
designated as a nominee by Westar Capital, Inc. (the "Western Nominees"). In
their discretion the proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournments thereof. The
undersigned hereby revokes any previous proxies with respect to the Special
General Meeting.
______________________________________________________________________________
Please indicate on the reverse of this card how your shares are to be voted.
The ADT Board recommends a vote AGAINST each of the Western Proposals. If
this card is returned signed but not marked with any indication as to how to
vote (or to abstain from voting), the undersigned will be deemed to have
directed the proxy to vote AGAINST each of the Western Proposals.
______________________________________________________________________________
Completed proxy cards should be returned to: Citibank-WWSS-Investor Services,
c/o Citicorp Data Distribution, Inc., P.O. Box 1429, Paramus, NJ 07653,
Citibank N.A., c/o Independent Registrars Group, Balfour House, High Road,
Ilford, Essex 1G1 1NQ, United Kingdom,
or AS&K Services Limited, P.O. Box 1179, Hamilton HM EX, Bermuda.
[Reverse of Proxy Card]
THE BOARD OF DIRECTORS OF ADT LIMITED RECOMMENDS A VOTE AGAINST EACH OF THE
WESTERN PROPOSALS.
1. PROPOSAL TO REMOVE ALL PRESENT
MEMBERS OF ADT BOARD. [ ] FOR [ ] AGAINST [ ] ABSTAIN
2. PROPOSAL TO REDUCE NUMBER OF
SEATS ON ADT BOARD TO TWO. [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO ELECT WESTERN
NOMINEES STEVEN L. KITCHEN
AND STEVEN A. MILLSTEIN OR
ANY OTHER WESTERN NOMINEE AS
DIRECTORS. [ ] FOR [ ] AGAINST [ ] ABSTAIN
To withhold authority to vote for any Western Nominee, write his
name below:
______________________________________.
Date:___________________________________, 1997
______________________________________________
Signature (and Title, if any)
Please sign your name below exactly as it
appears hereon. When signing as attorney,
executor, administrator, trustee or other
representative capacity, please give full
title as such. If a corporation, please
sign in full corporate name by a duly
authorized director or other officer or
execute under the corporation's common
seal. In the case of joint holders, any
one may sign but the first-named in
the share register may exclude the voting
rights of the other joint holder(s) by
voting in person or by proxy.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE,
PLEASE CONTACT D.F. KING & CO., INC.
at 1-800-488-8035 (toll-free in the United States)
or 212-269-5550 (outside the United States).
