SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D**
Under the Securities Exchange Act of 1934
(Amendment No. 10)*
Matlack Systems, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
576901102
(Cusip Number)
J. Taylor Crandall
201 Main Street, Suite 3100
Fort Worth, Texas 76102
(817) 390-8500
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 25, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
**The total number of shares reported herein is 1,742,750 shares, which
constitutes approximately 19.8% of the total number of shares outstanding.
All ownership percentages set forth herein assume that there are 8,787,162
shares outstanding.
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1. Name of Reporting Person:
Alpine Capital, L.P.
2. Check the Appropriate Box if a Member of a Group:
(a) / /
(b) / X /
3. SEC Use Only
4. Source of Funds: WC
5. Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):
/ /
6. Citizenship or Place of Organization: Texas
7. Sole Voting Power: 1,573,794 (1)
Number of
Shares
Beneficially 8. Shared Voting Power: -0-
Owned By
Each
Reporting 9. Sole Dispositive Power: 1,573,794 (1)
Person
With
10. Shared Dispositive Power: -0-
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
1,573,794
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
/ /
13. Percent of Class Represented by Amount in Row (11): 17.9%
14. Type of Reporting Person: PN
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(1) Power is exercised through its two general partners, Robert W. Bruce III
and Algenpar, Inc.
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1. Name of Reporting Person:
Robert W. Bruce III
2. Check the Appropriate Box if a Member of a Group:
(a) / /
(b) / X /
3. SEC Use Only
4. Source of Funds: Not Applicable
5. Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):
/ /
6. Citizenship or Place of Organization: USA
7. Sole Voting Power: -0-
Number of
Shares
Beneficially 8. Shared Voting Power: 1,742,750 (1)
Owned By
Each
Reporting 9. Sole Dispositive Power: -0-
Person
With
10. Shared Dispositive Power: 1,742,750 (1)
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
1,742,750 (1)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
/ /
13. Percent of Class Represented by Amount in Row (11): 19.8%
14. Type of Reporting Person: IN
- -------------
(1) Solely in his capacity as one of two general partners of Alpine Capital,
L.P., with respect to 1,573,794 shares, and in his capacity as a
principal of The Robert Bruce Management Co., Inc., which has shared
investment discretion over shares owned by The Anne T. and Robert M. Bass
Foundation, with respect to 168,956 shares.
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1. Name of Reporting Person:
Algenpar, Inc.
2. Check the Appropriate Box if a Member of a Group:
(a) / /
(b) / X /
3. SEC Use Only
4. Source of Funds: Not Applicable
5. Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):
/ /
6. Citizenship or Place of Organization: Texas
7. Sole Voting Power: -0-
Number of
Shares
Beneficially 8. Shared Voting Power: 1,573,794 (1)(2)
Owned By
Each
Reporting 9. Sole Dispositive Power: -0-
Person
With
10. Shared Dispositive Power: 1,573,794 (1)(2)
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
1,573,794 (2)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
/ /
13. Percent of Class Represented by Amount in Row (11): 17.9%
14. Type of Reporting Person: CO
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(1) Power is exercised through its President, J. Taylor Crandall.
(2) Solely in its capacity as one of two general partners of Alpine Capital,
L.P.
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1. Name of Reporting Person:
J. Taylor Crandall
2. Check the Appropriate Box if a Member of a Group:
(a) / /
(b) / X /
3. SEC Use Only
4. Source of Funds: Not Applicable
5. Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):
/ /
6. Citizenship or Place of Organization: USA
7. Sole Voting Power: -0-
Number of
Shares
Beneficially 8. Shared Voting Power: 1,742,750 (1)
Owned By
Each
Reporting 9. Sole Dispositive Power: -0-
Person
With
10. Shared Dispositive Power: 1,742,750 (1)
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
1,742,750 (1)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
/ /
13. Percent of Class Represented by Amount in Row (11): 19.8%
14. Type of Reporting Person: IN
- ------------
(1) Solely in his capacity as President and sole stockholder of Algenpar,
Inc., which is one of two general partners of Alpine Capital, L.P., with
respect to 1,573,794 shares, and in his capacity as a director of The
Anne T. and Robert M. Bass Foundation, with respect to 168,956 shares.
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1. Name of Reporting Person:
The Anne T. and Robert M. Bass Foundation
2. Check the Appropriate Box if a Member of a Group:
(a) / /
(b) / X /
3. SEC Use Only
4. Source of Funds: Working Capital
5. Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):
/ /
6. Citizenship or Place of Organization: Texas
7. Sole Voting Power: 168,956 (1)
Number of
Shares
Beneficially 8. Shared Voting Power: -0-
Owned By
Each
Reporting 9. Sole Dispositive Power: 168,956 (1)
Person
With
10. Shared Dispositive Power: -0-
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
168,956
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
/ /
13. Percent of Class Represented by Amount in Row (11): 1.9%
14. Type of Reporting Person: CO
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(1) Power is exercised through its three directors, Anne T. Bass, Robert M.
Bass and J. Taylor Crandall and through Robert W. Bruce III in his
capacity as a principal of The Robert Bruce Management Co., Inc., which
has shared investment discretion over shares owned by The Anne T. and
Robert M. Bass Foundation.
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1. Name of Reporting Person:
Anne T. Bass
2. Check the Appropriate Box if a Member of a Group:
(a) / /
(b) / X /
3. SEC Use Only
4. Source of Funds: Not Applicable
5. Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):
/ /
6. Citizenship or Place of Organization: USA
7. Sole Voting Power: -0-
Number of
Shares
Beneficially 8. Shared Voting Power: 168,956 (1)
Owned By
Each
Reporting 9. Sole Dispositive Power: -0-
Person
With
10. Shared Dispositive Power: 168,956 (1)
11.Aggregate Amount Beneficially Owned by Each Reporting Person:
168,956 (1)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
/ /
13. Percent of Class Represented by Amount in Row (11): 1.9%
14. Type of Reporting Person: IN
- ------------
(1) Solely in her capacity as a director of The Anne T. and Robert M. Bass
Foundation.
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1. Name of Reporting Person:
Robert M. Bass
2. Check the Appropriate Box if a Member of a Group:
(a) / /
(b) / X /
3. SEC Use Only
4. Source of Funds: Not Applicable
5. Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):
/ /
6. Citizenship or Place of Organization: USA
7. Sole Voting Power: -0-
Number of
Shares
Beneficially 8. Shared Voting Power: 168,956 (1)
Owned By
Each
Reporting 9. Sole Dispositive Power: -0-
Person
With
10. Shared Dispositive Power: 168,956 (1)
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
168,956 (1)
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
/ /
13. Percent of Class Represented by Amount in Row (11): 1.9%
14. Type of Reporting Person: IN
- ------------
(1) Solely in his capacity as a director of The Anne T. and Robert M. Bass
Foundation.
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Pursuant to Rule 13d-2(a) of Regulation 13D-G of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Act"),
the undersigned hereby amend their Schedule 13D Statement dated September 10,
1993, as amended by Amendment No. 1 dated November 3, 1993, Amendment No. 2
dated January 21, 1994, Amendment No. 3 dated March 4, 1994, Amendment No. 4
dated April 6, 1994, Amendment No. 5 dated August 26, 1994, Amendment No. 6,
dated March 6, 1995, Amendment No. 7 dated March 30, 1995, Amendment No. 8
dated June 13, 1995 and Amendment No. 9 dated August 21, 1995 (the "Schedule
13D"), relating to the Common Stock, par value $1.00 of Matlack Systems, Inc.
Item 1. SECURITY AND ISSUER.
No material change.
Item 2. IDENTITY AND BACKGROUND.
No material change.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 is hereby amended in its entirety to read as follows:
The source and amount of the funds used by the Reporting Persons to
purchase shares of the Stock are as follows:
REPORTING PERSON SOURCE OF FUNDS AMOUNT OF FUNDS
Alpine Working Capital(1) $14,809,717.63
Bruce Not Applicable Not Applicable
Algenpar Not Applicable Not Applicable
Crandall Not Applicable Not Applicable
Foundation Working Capital(1) $ 1,475,050.65
A. Bass Not Applicable Not Applicable
R. Bass Not Applicable Not Applicable
(1) As used herein, the term "Working Capital" includes income from the
business operations of the entity plus sums borrowed from banks and brokerage
firm margin accounts to operate such business in general. None of the funds
reported herein as "Working Capital" were borrowed or otherwise obtained for
the specific purpose of acquiring, handling, trading or voting the Stock.
Item 4. PURPOSE OF TRANSACTION.
The last paragraph of Item 4 is hereby amended in its entirety to read as
follows:
Except as set forth in Item 6 hereof, the Reporting Persons have no plans
or proposals which relate to or would result in any of the actions set forth
in paragraphs (a)-(j) of Item 4 of Schedule 13D.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is hereby amended in its entirety to read as follows:
(a)
ALPINE
The aggregate number of shares of the Stock that Alpine owns
beneficially, pursuant to Rule 13d-3(d)(1)(i) of the Act, is 1,573,794, which
constitutes approximately 17.9% of the outstanding shares of the Stock.
BRUCE
Because of his position as one of two general partners of Alpine and as
principal of Bruce Management (which has shared investment discretion over the
shares of Stock owned by the Foundation), Bruce may, pursuant to Rule 13d-3 of
the Act, be deemed to be the beneficial owner of 1,742,750 shares of the
Stock, which constitutes approximately 19.8% of the outstanding shares of the
Stock.
ALGENPAR
Because of its position as one of two general partners of Alpine,
Algenpar may, pursuant to Rule 13d-3 of the Act, be deemed to be the
beneficial owner of 1,573,794 shares of the Stock, which constitutes
approximately 17.9% of the outstanding shares of the Stock.
CRANDALL
Because of his positions as President and sole stockholder of Algenpar,
one of two general partners of Alpine, and a director of Foundation, Crandall
may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner
of 1,742,750 shares of the Stock, which constitutes approximately 19.8% of the
outstanding shares of the Stock.
FOUNDATION
The aggregate number of shares of the Stock that Foundation owns
beneficially, pursuant to Rule 13d-3(d)(1)(i) of the Act, is 168,956, which
constitutes approximately 1.9% of the outstanding shares of the Stock.
A. BASS
Because of her position as a director of Foundation, A. Bass may,
pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of
168,956 shares of the Stock, which constitutes approximately 1.9% of the
outstanding shares of the Stock.
R. BASS
Because of his position as a director of Foundation, R. Bass may,
pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of
168,956 shares of the Stock, which constitutes approximately 1.9% of the
outstanding shares of the Stock.
To the best of the knowledge of each of the Reporting Persons, other than
as set forth above, none of the persons named in Item 2 herein is the
beneficial owner of any shares of the Stock.
(b)
ALPINE
Acting through its two general partners, Alpine has the sole power to
vote or to direct the vote and to dispose or to direct the disposition of
1,573,794 shares of the Stock.
BRUCE
As one of two general partners of Alpine, Bruce has shared power to vote
or to direct the vote and to dispose or to direct the disposition of 1,573,794
shares of the Stock. As principal of Bruce Management (which exercises shared
investment discretion over the shares of the Stock owned by the Foundation),
Bruce has shared power to vote or to direct the vote and to dispose or to
direct the disposition of 168,956 shares of the Stock.
ALGENPAR
As one of two general partners of Alpine, Algenpar has shared power to
vote or to direct the vote and to dispose or to direct the disposition of
1,573,794 shares of the Stock.
CRANDALL
As the President and sole stockholder of Algenpar, which is one of two
general partners of Alpine, Crandall has shared power to vote or to direct the
vote and to dispose or to direct the disposition of 1,573,794 shares of the
Stock. As one of three directors of Foundation, Crandall has shared power to
vote or to direct the vote and to dispose or to direct the disposition of
168,956 shares of the Stock.
FOUNDATION
Acting through its three directors and Bruce (as principal of Bruce
Management which exercises shared investment discretion over the shares of the
Stock owned by the Foundation), Foundation has the sole power to vote or to
direct the vote and to dispose or to direct the disposition of 168,956 shares
of the Stock.
A. BASS
As one of three directors of Foundation, A. Bass has shared power to vote
or to direct the vote and to dispose or to direct the disposition of 168,956
shares of the Stock.
R. BASS
As one of three directors of Foundation, R. Bass has shared power to vote
or to direct the vote and to dispose or to direct the disposition of 168,956
shares of the Stock.
(c) None.
(d) Each of the Reporting Persons affirms that no person other than such
Reporting Person has the right to receive or the power to direct the receipt
of dividends from, or the proceeds from the sale of, the Stock owned by such
Reporting Person.
(e) Not applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Item 6 hereby partially is amended to add at the end thereof, the
following:
As of February 25, 1998, Alpine and Foundation entered into a Support
Agreement with Apollo Management, L.P. ("Apollo"), Palestra Acquisition Corp.
("Merger Co.") and certain other stockholders of the Issuer (the "Support
Agreement"). The following summary of the Support Agreement does not purport
to be complete. Reference hereby is made to the complete text of the Support
Agreement attached as Exhibit 99.2 hereto.
Pursuant to the Support Agreement, each of Alpine and Foundation agreed
to sell all shares of the Stock held by each of them to Merger Co. for $12.00
per share, upon notice from Merger Co. following the occurrence of one of the
following: (i) a third party having made an Alternative Proposal (as defined
in the letter of intent dated as of February 25, 1998, among Apollo, Merger
Co. and the Issuer (the "Letter of Intent")); (ii) the Issuer having
materially breached its obligations under the Letter of Intent or the merger
agreement contemplated by the Letter of Intent (the "Merger Agreement"); or
(iii) the Issuer's stockholders having failed to approve the merger
contemplated by the Merger Agreement (the "Merger"). In addition, in the
event Merger Co. has purchased shares of the Stock and either sells same
within one year pursuant to an Alternative Proposal as to which a definitive
agreement is entered into within 120 days of the effective date of the Support
Agreement or in the event the Merger is consummated at a price in excess of
$12.00 per share, Merger Co. is obligated to pay Alpine and Foundation 50% of
any Excess Consideration (as defined in the Support Agreement).
Alternatively, Merger Co. may elect, in lieu of purchasing shares from Alpine
and Foundation, to receive from Alpine and Foundation 50% of any Excess
Consideration in the event of the consummation within one year of an
Alternative Proposal as to which a definitive agreement is entered into within
120 days of the effective date of the Support Agreement or in the event the
Merger is consummated at a price in excess of $12.00 per share.
The Support Agreement also requires that Alpine and Foundation vote in
favor of the Merger and, as requested by Merger Co., against Alternative
Transactions and Frustrating Transactions (as each are defined in the Support
Agreement). In addition Alpine and Foundation granted an irrevocable proxy
respecting the foregoing to representatives of Merger Co.
Except as set forth above, the Support Agreement expires 120 days from
its effective date.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 99.1 Agreement pursuant to Rule 13d-1(f)(1)(iii), filed herewith.
Exhibit 99.2 Support Agreement, dated as of February 25, 1998, among
Alpine, Foundation, Apollo Management, L.P., Palestra
Acquisition Corp. and the other parties named therein, filed
herewith.
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After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
DATED: February 27, 1998
ALPINE CAPITAL, L.P.
By: /s/ Robert W. Bruce III
Robert W. Bruce III,
Manager
/s/ Robert W. Bruce
ROBERT W. BRUCE III
ALGENPAR, INC.
By: /s/ J. Taylor Crandall
J. Taylor Crandall,
President
/s/ J. Taylor Crandall
J. TAYLOR CRANDALL
/s/ W. R. Cotham
W. R. Cotham,
Attorney-in-Fact for:
THE ANNE T. AND ROBERT M.
BASS FOUNDATION (1)
ANNE T. BASS (2)
ROBERT M. BASS (3)
(1) A Power of Attorney authorizing W. R. Cotham, et al., to act
on behalf of The Anne T. and Robert M. Bass Foundation
previously has been filed with the Securities and Exchange
Commission.
(2) A Power of Attorney authorizing W. R. Cotham, et al., to act
on behalf of Anne T. Bass previously has been filed with the
Securities and Exchange Commission.
(3) A Power of Attorney authorizing W. R. Cotham, et al., to act
on behalf of Robert M. Bass previously has been filed with
the Securities and Exchange Commission.
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
99.1 Agreement pursuant to Rule 13d-1(f)(1)(iii), filed herewith.
99.2 Support Agreement, dated as of February 25, 1998, among Alpine,
Foundation, Apollo Management, L.P., Palestra Acquisition
Corp., and the other parties named therein, filed herewith.
EXHIBIT 99.1
Pursuant to Rule 13d-1(f)(1)(iii) of Regulation 13D-G of the General
Rules and Regulations of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended, the undersigned agrees that the
statement to which this Exhibit is attached is filed on behalf of each of
them in the capacities set forth below.
ALPINE CAPITAL, L.P.
By: /s/ Robert W. Bruce III
Robert W. Bruce III,
Manager
/s/ Robert W. Bruce III
ROBERT W. BRUCE III
ALGENPAR, INC.
By: /s/ J. Taylor Crandall
J. Taylor Crandall,
President
/s/ J. Taylor Crandall
J. TAYLOR CRANDALL
/s/ W. R. Cotham
W. R. Cotham,
Attorney-in-Fact for:
THE ANNE T. AND ROBERT M.
BASS FOUNDATION (1)
ANNE T. BASS (2)
ROBERT M. BASS (3)
(1) A Power of Attorney authorizing W. R. Cotham, et al., to act on behalf of
The Anne T. and Robert M. Bass Foundation previously has been filed with
the Securities and Exchange Commission.
(2) A Power of Attorney authorizing W. R. Cotham, et al., to act on behalf of
Anne T. Bass previously has been filed with the Securities and Exchange
Commission.
(3) A Power of Attorney authorizing W. R. Cotham, et al., to act on behalf of
Robert M. Bass previously has been filed with the Securities and Exchange
Commission.
EXHIBIT 99.2
SUPPORT AGREEMENT #2
SUPPORT AGREEMENT #2, dated as of February 25, 1998, among Apollo
Management, L.P. ("Apollo"), Merger Co. (as defined below) and the persons
listed on Schedule A hereto (each a "Stockholder", and, collectively, the
"Stockholders").
WHEREAS, Apollo and Matlack Systems, Inc., a Delaware corporation (the
"Company") have, on the date hereof, entered into a letter of intent (the
"LOI") with respect to the acquisition of the Company by Palestra Acquisition
Corp., a Delaware corporation formed by Apollo ("Merger Co.");
WHEREAS, subject to the terms and conditions of the LOI, Apollo, Merger
Co. and the Company, propose to enter into an Agreement and Plan of Merger (as
the same may be amended or supplemented, the "Merger Agreement") providing for
the merger of Merger Co. with the Company (the "Merger");
WHEREAS, each Stockholder is the record and beneficial owner of the
number of shares of Common Stock, par value $1.00 per share, of the Company
(the "Company Common Stock") set forth opposite such Stockholder's name on
Schedule A hereto; such shares of the Company Common Stock, as such shares may
be adjusted by stock dividend, stock split, recapitalization, combination or
exchange of shares, merger, consolidation, reorganization or other change or
transaction of or by the Company, together with shares of the Company Common
Stock that may be acquired after the date hereof by such Stockholder,
including shares of the Company Common Stock issuable upon the exercise of
options to purchase the Company Common Stock (as the same may be adjusted as
aforesaid), being collectively referred to herein as the "Shares"; and
WHEREAS, as a condition to their willingness to enter into the LOI and
the Merger Agreement, Apollo and Merger Co. have requested that the
Stockholders enter into this Agreement;
NOW, THEREFORE, to induce Apollo and Merger Co. to enter into, and in
consideration of it entering into, the LOI and the Merger Agreement (as
applicable), and in consideration of the premises and the representations,
warranties and agreements contained herein, the parties agree as follows:
1. Purchase and Sale of Shares.
(a) Sale. Each Stockholder hereby severally and not jointly agrees to
sell to Merger Co., upon written notice from Merger Co. (the Notice ), all
such Stockholder's Shares at a price per Share equal to $12.00 provided, that
(i) one of the following shall have occurred: (A) a third party shall have
made an Alternative Proposal (as defined in the LOI), (B) the Company
materially breaches its obligations under the LOI or the Merger Agreement or
(C) the approval of the Merger by the Company s Stockholders shall not have
been obtained at a meeting duly convened therefor or at any adjournment
thereof and (ii) any applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the HSR Act ) shall have expired or been
terminated.
(b) Closing. Subject to Section 1(a) hereof, the closing of the
purchase and sale of the Stockholder s Shares shall take place at the place,
time and date for the closing of the purchase by Merger Co. specified in the
Notice. At the closing, each Stockholder shall deliver certificates
representing such Stockholder s Shares, in proper form for transfer,
accompanied by stock powers duly executed in blank against delivery of $12.00
per Share. Such delivery shall vest in Merger Co., and each Stockholder will
take any additional actions reasonably requested by Merger Co. to perfect in
Merger Co., good title to the Shares, free and clear of any lien, encumbrance
or voting agreement of any kind, other than as may be created by this
Agreement.
(c) Excess Consideration. (i) Following an Alternative Proposal or in
the event the transactions contemplated by the Merger Agreement are
consummated and the consideration per Share paid by Merger Co. is increased to
in excess of $12.00 per Share (a "Merger Co. Increase"), Merger Co. may elect,
by notice to the Stockholders, in lieu of purchasing such Stockholder's
Shares, to receive from such Stockholder, and each Stockholder hereby agrees
to pay to Merger Co. on demand, an amount equal to one-half of all Excess
Consideration (determined in accordance with Section 1(c)(ii) below) of such
Stockholder from the consummation of any Alternative Proposal for which a
definitive agreement is entered into within the time periods contemplated by
Section 8 below or pursuant to a Merger Co. Increase.
(ii) For purposes of this Section 1(c), the "Excess Consideration"
of any Stockholder from any Alternative Proposal or a Merger Co. Increase
shall equal the sum of (A)(1) the aggregate consideration received by such
Stockholder pursuant to (x) such Alternative Proposal or (y) such Merger Co.
Increase, valuing any non-cash consideration (including any residual interest
in the Company) at its fair market value on the date of such consummation plus
(2) the fair market value (which shall not be less than the purchase price per
share of Company Common Stock set forth in the Alternative Proposal or a
Merger Co. Increase) of all Shares of such Stockholder disposed of after the
termination of the LOI or the Merger Agreement and prior to the date of such
consummation, less (B) the product of (x) the number of Shares held by such
Stockholder on the date of termination of the LOI or the Merger Agreement and
(y) $12.00. An equivalent calculation shall be made with respect to any
options sold and included as part of the calculation of Excess Consideration.
(iii) For purposes of this Section 1(c), the fair market value of any
non-cash consideration consisting of:
(A) securities listed on a national securities exchange or traded
on the New York Stock Exchange shall be equal to the average closing price per
share of such security as reported on such exchange or New York Stock Exchange
for the five trading days after the date of determination; and
(B) consideration which is other than securities of the form
specified in clause (A) of this Section 1(c)(iii) shall be determined by a
nationally recognized independent investment banking firm mutually agreed upon
by the parties within 10 business days of the event requiring selection of
such banking firm; provided, however, that if the parties are unable to agree
within 10 business days after the date of such event as to the investment
banking firm, then the parties shall each select one firm, and those firms
shall select a third investment banking firm, which third firm shall make such
determination; provided further, that the fees and expenses of such investment
banking firm shall be borne equally by Merger Co., on the one hand, and the
Stockholders, on the other hand. The determination of the investment banking
firm shall be binding upon the parties.
(iv) Any payment of Excess Consideration under this Section 1(c)
shall be paid by wire transfer of same day funds to an account designated by
Merger Co. ("Wire Transfer ). If all or a portion of the consideration
received for the Shares by the Stockholder is in the form of non-cash
consideration, the Stockholder shall pay to Merger Co. the Excess
Consideration on such portion by either, at the Stockholder s election, (i)
transferring to Merger Co. Merger Co.'s pro rata share of such non-cash
consideration (which transfer shall be made immediately following the
determination of the value of such non-cash consideration) or (ii) selling
such non-cash consideration (which sale shall be effected as soon as
practicable and the allocable portion of the proceeds of which shall be paid
to Merger Co. immediately following the settlement of such sale) and remitting
the cash proceeds to Merger Co. by Wire Transfer.
(v) In the event Merger Co. purchases the Stockholder's Shares as
contemplated by Section 1(b) above and consummates the sale of such Shares
pursuant to an Alternative Proposal or a Merger Co. Increase, then Merger Co.
shall pay to the Stockholders pro rata, on demand, an amount equal to one half
the Excess Consideration of Merger Co. from the consummation of the
Alternative Proposal for which a definitive agreement is entered into within
the time periods contemplated by Section 8 below or pursuant to a Merger Co.
Increase shall be calculated and payment shall be made in the same manner
(appropriately adjusted) as provided in paragraphs (ii), (iii) and (iv)
immediately preceding (it being understood the election set forth in paragraph
(iv) preceding shall be at Merger Co. s election).
(d) Dividends and Split-Ups. In event of any change in the number of
issued and outstanding Shares by reason of any stock dividend, split-up,
recapitalization, merger, combination, conversion, exchange of shares, rights
plan or other change in the corporate or capital structure of the Company
which would have the effect of diluting the rights of Merger Co. hereunder or
of reducing the aggregate Purchase Price (as defined in the LOI) payable with
respect to the Shares hereunder, the number and kind of Shares subject to this
Agreement and the Purchase Price shall be appropriately adjusted.
2. Representations and Warranties of the Stockholders. Each
Stockholder hereby, severally and not jointly, represents and warrants to
Merger Co. as follows:
(a) Authority. The Stockholder has all requisite power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by the Stockholder. This Agreement has been duly executed and
delivered by the Stockholder and, assuming this Agreement constitutes a valid
and binding obligation of Merger Co., constitutes a valid and binding
obligation of the Stockholder enforceable against the Stockholder in
accordance with its terms. Except for the expiration or termination of the
waiting periods under the HSR Act and informational filings with the
Securities and Exchange Commission, neither the execution, delivery or
performance of this Agreement by the Stockholder nor the consummation by the
Stockholder of the transactions contemplated hereby will (i) require any
filing with, or permit, authorization, consent or approval of, any federal,
state, local, municipal or foreign or other government or subdivision, branch,
department or agency thereof or any governmental or quasi-governmental
authority of any nature, including any court or other tribunal, (a
"Governmental Entity"), (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default under, or give
rise to any right of termination, amendment, cancellation or acceleration
under, or result in the creation of any Lien upon any of the properties or
assets of the Stockholder under, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, lease, license, permit, concession,
franchise, contract, agreement or other instrument or obligation (a
"Contract") to which the Stockholder is a party or by which the Stockholder or
any of the Stockholder's properties or assets, including the Stockholder's
Shares, may be bound or (iii) violate any judgment, order, writ, preliminary
or permanent injunction or decree (an "Order") or any statute, law, ordinance,
rule or regulation of any Governmental Entity (a "Law") applicable to the
Stockholder or any of the Stockholder's properties or assets, including the
Stockholder's Shares.
(b) The Shares. The Stockholder's Shares and the certificates
representing such Shares are now, and at all times during the term hereof will
be, held by such Stockholder, or by a nominee or custodian for the benefit of
such Stockholder, and the Stockholder has good title to such Shares, free and
clear of any Liens, proxies, voting trusts or agreements, understandings or
arrangements, except for any such Liens or proxies arising hereunder. Except
as set forth on Schedule B, the Stockholder owns of record or beneficially no
shares of the Company Common Stock other than such Stockholder's Shares and
shares of the Company Common Stock issuable upon the exercise of Company stock
options, as set forth on Schedule A hereto.
(c) Brokers. No broker, investment banker, financial advisor or other
person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of such
Stockholder.
(d) Merger Agreement. The Stockholder understands and acknowledges that
Merger Co. is entering into the LOI and the Merger Agreement in reliance upon
the Stockholder's execution and delivery of this Agreement.
3. Representations and Warranties of Merger Co. Merger Co. hereby
represents and warrants to the Stockholders as follows:
(a) Authority. Merger Co. has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Merger Co. and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of Merger Co. This Agreement has been duly executed and
delivered by Merger Co. and, assuming this Agreement constitutes a valid and
binding obligation of the Stockholders, constitutes a valid and binding
obligation of Merger Co. enforceable in accordance with its terms.
(b) Securities Act. The Shares will be acquired in compliance with, and
Merger Co. will not offer to sell or otherwise dispose of any Shares so
acquired by it in violation of the registration requirements of the Securities
Act of 1933, as amended.
(c) Financing. Merger Co. has, or will have at the time that any
payment is required to be made to any Stockholder hereunder, the funds
necessary to make such payment to such Stockholder.
4. Covenants of the Stockholders. Each Stockholder, severally and not
jointly, agrees as follows:
(a) The Stockholder shall not, except as contemplated by the terms
of this Agreement, (i) sell, transfer, pledge, assign or otherwise dispose of,
or enter into any Contract, option or other arrangement (including any profit
sharing arrangement) or understanding with respect to the sale, transfer,
pledge, assignment or other disposition of the Shares to any person other than
Merger Co. or Merger Co.'s designee, (ii) enter into any voting arrangement,
whether by proxy, voting agreement, voting trust, power-of-attorney or
otherwise, with respect to the Shares or (iii) take any other action that
would in any way restrict, limit or interfere with the performance of its
obligations hereunder or the transactions contemplated hereby.
(b) At any meeting of Stockholders of the Company called to vote
upon the Merger and the Merger Agreement or at any adjournment thereof or in
any other circumstances upon which a vote, consent or other approval
(including by written consent) with respect to the Merger and the Merger
Agreement is sought, each Stockholder shall as requested by Merger Co.
(including, without limitation, by cooperating with Merger Co. with respect to
the irrevocable proxy granted to Merger Co. pursuant to Section 5 below), vote
(or cause to be voted) such Stockholder's Shares in favor of the Merger, the
adoption by the Company of the Merger Agreement and the approval of the other
transactions contemplated by the Merger Agreement. At any meeting of
Stockholders of the Company or at any adjournment thereof or in any other
circumstances upon which the Stockholder's vote, consent or other approval is
sought, such Stockholder shall as requested by Merger Co. as provided above
vote (or cause to be voted) such Stockholder's Shares against (i) any merger
agreement or merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by the Company
or any other Alternative Proposal (collectively, "Alternative Transactions")
or (ii) any amendment of the Company's Articles of Incorporation or by-laws or
other proposal or transaction involving the Company or any of its
subsidiaries, which amendment or other proposal or transaction would in any
manner impede, frustrate, prevent or nullify, the Merger, the Merger Agreement
or any of the other transactions contemplated by the Merger Agreement
(collectively, "Frustrating Transactions").
5. Grant of Irrevocable Proxy Coupled with an Interest; Appointment of
Proxy.
(a) Each Stockholder hereby irrevocably grants to, and appoints, Joshua
Harris, and any other individual who shall hereafter be designated by Merger
Co., such Stockholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of such Stockholder, to
vote such Stockholder's Shares, or grant a consent or approval in respect of
such Shares, at any meeting of Stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which their vote,
consent or other approval is sought, (i) in favor of the Merger, the adoption
by the Company of the Merger Agreement and the approval of the other
transactions contemplated by the Merger Agreement and (ii) against any
Alternative Transaction or Frustrating Transaction.
(b) Each Stockholder represents that any proxies heretofore given in
respect of such Stockholder's Shares are not irrevocable, and that any such
proxies are hereby revoked.
(c) Each Stockholder hereby affirms that the proxy set forth in this
Section 6 is coupled with an interest and is irrevocable until such time as
this Agreement terminates in accordance with its terms. Such Stockholder
hereby further affirms that the irrevocable proxy is given in connection with
the execution of the Merger Agreement, and that such irrevocable proxy is
given to secure the performance of the duties of such Stockholder under this
Agreement. Such Stockholder hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue hereof. Such
irrevocable proxy is executed and intended to be irrevocable in accordance
with the provisions of Section 212 of the Delaware General Corporation Law.
Such irrevocable proxy shall be valid until the termination of this Agreement
pursuant to Section 8.
6. Further Assurances. Each Stockholder will, from time to time,
execute and deliver, or cause to be executed and delivered, such additional or
further transfers, assignments, endorsements, consents and other instruments
as Merger Co. may reasonably request for the purpose of effectively carrying
out the transactions contemplated by this Agreement and to vest the power to
vote such Stockholder's Shares as contemplated by Section 5. Merger Co.
agrees to use reasonable efforts to take, or cause to be taken, all actions
necessary to comply promptly with all legal requirements that may be imposed
with respect to the transactions contemplated by this Agreement (including
legal requirements of the HSR Act).
7. Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable
by, the parties hereto and their respective successors and assigns.
Notwithstanding the foregoing, each of Apollo and Merger Co. shall have the
right to assign its rights, interests and obligations hereunder to Apollo
Investment Fund III, Apollo Investment Fund IV (or any funds under direct or
indirect common control) or MTL Inc. and any of their respective affiliates at
its sole option and without the prior written consent of the other parties
hereto; provided that no such assignment shall relieve Apollo of its
obligations hereunder. Notwithstanding anything contained in this Agreement
to the contrary, nothing in this Agreement, expressed or implied, is intended
to confer on any person other than the parties hereto or their respective
heirs, successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
8. Termination. This Agreement, and all rights and obligations of the
parties hereunder, shall terminate 120 days from the date hereof except with
respect to an Alternative Proposal as to which a definitive agreement is
entered into during such period, in which case the rights and the obligations
of the Stockholders and Merger Co. shall expire one year from the termination
of the LOI or the Merger Agreement. Nothing in this Section 8 shall relieve
any party from liability for willful breach of this Agreement.
Notwithstanding the foregoing, if Merger Co. shall purchases Shares pursuant
to Section 1 hereof, Sections 2,3 and 7-11 shall survive any termination of
this Agreement.
9. General Provisions.
(a Payments. All payments required to be made to any party to this
Agreement shall be made by Wire Transfer to an account designated by such
party at least one trading day prior to such payment.
(b) Expenses. Subject to the terms of the Merger Agreement, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expense.
(c) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(d) Notice. All notices and other communications hereunder shall be in
writing and shall be deemed given upon receipt to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(i) if to Merger Co., to:
Joshua Harris
c/o Apollo Management, L.P.
1301 Avenue of the Americas
New York, New York 10019
Facsimile: (212) 261-4102
with a copy to:
Morton A. Pierce, Esq.
Douglas L. Getter, Esq.
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, New York 10019
Facsimile: (212) 259-6333
and
(ii) if to a Stockholder, to the address set forth under the name of such
Stockholder on Schedule A hereto
with a copy to:
Kevin G. Levy, Esq.
201 Main Street, Suite 3100
Ft. Worth, TX 76107
Facsimile: (817) 878-9285
(e) Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Wherever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
(f) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each
of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
(g) Entire Agreement; No Third-Party Beneficiaries. This Agreement
(including the documents and instruments referred to herein) (i) constitutes
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof and (ii) is not intended to confer upon any person other than the
parties hereto any rights or remedies hereunder.
(h) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware without regard to any
applicable conflicts of law.
(i) Publicity. Except as otherwise required by law, including, without
limitation, informational filings pursuant to the Securities and Exchange Act
of 1934, as amended, court process or the rules of a national securities
exchange or the Nasdaq National Market or as contemplated or provided in the
Merger Agreement, for so long as this Agreement is in effect, neither any
Stockholder nor Merger Co. shall issue or cause the publication of any press
release or other public announcement with respect to the transactions
contemplated by this Agreement or the Merger Agreement without the consent of
the other parties, which consent shall not be unreasonably withheld.
10. Stockholder Capacity. No person executing this Agreement who is or
becomes during the term hereof a director or officer of the Company makes any
agreement or understanding herein in his or her capacity as such director or
officer. Each Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of, or the trustee of a trust whose beneficiaries
are the beneficial owners of, such Stockholder's Shares and nothing herein
shall limit or affect any actions taken by a Stockholder in its capacity as an
officer or director of the Company to the extent specifically permitted by the
Merger Agreement.
11. Enforcement. The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed
in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in a court of the United States.
This being in addition to any other remedy to which they are entitled at law
or in equity. In addition, each of the parties hereto waives any right to
trial by jury with respect to any claim or proceeding related to or arising
out of this Agreement or any of the transactions contemplated hereby.
12. Apollo Agreements.
(a) Further Action. Apollo, on behalf of Merger Co., covenants and
agrees for the benefit of the Stockholders that, in the event the Merger
Agreement is executed, it shall use reasonable efforts, subject to the
fulfillment of each of the conditions of performance set forth therein, to
perform such acts and execute such documents as may be reasonably required to
effect the Merger. Further in the event the Merger Agreement is consummated,
the parties acknowledge that the Shareholders will be entitled to the
consideration payable thereunder.
(b) Guarantee. Apollo, on behalf of certain investment funds under
management, hereby guaranties the obligations created by the covenants of
Merger Co. set forth in Sections 1(c)(v) and 3(c) above, it being understood
that any such guaranties and related obligations shall be non-recourse to the
partners, whether past, present or future, of Apollo and/or its investment
funds under management.
IN WITNESS WHEREOF, each of Apollo and Merger Co. has caused this
Agreement to be signed by its officer thereunto duly authorized and each
Stockholder (or the appropriate officer of a Stockholder) has signed this
Agreement, all as of the date first written above.
APOLLO MANAGEMENT, L.P.
By: /s/Joshua Harris
Joshua Harris
Title:
PALESTRA ACQUISITION CORP.
By: /s/Joshua Harris
Joshua Harris
President
ALPINE CAPITAL, L.P.
By: Algenpar, Inc.,
General Partner
By:/s/J. Taylor Crandall
J. Taylor Crandall
President
THE ANNE T. AND ROBERT M.
BASS FOUNDATION
By:/s/ Robert M. Bass
Robert M. Bass
Vice President
<PAGE>
SCHEDULE A
Number of Shares Number of Options to
Stockholder and of the Company Purchase the Company
Address Common Stock Common Stock
Alpine Capital, L.P. 1,573,794 -0-
201 Main Street
Suite 3100
Fort Worth, TX 76102
The Anne T. and Robert M. 168,956 -0-
Bass Foundation
201 Main Street
Suite 3100
Fort Worth, Texas 76102
