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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
HORSEHEAD RESOURCE DEVELOPMENT COMPANY, INC.
(Name of Issuer and Person Filing Statement)
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
440699-10-6
(CUSIP Number of Class of Securities)
William M. Quirk, President
Horsehead Resource Development Company, Inc.
110 East 59th Street
New York, New York 10022
(212) 527-3003
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person Filing Statement)
Copy to:
Morris Orens, Esq.
Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, New York 10022
(212) 758-9500
This statement is filed in connection with (check the appropriate box):
a. [ ] The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C, or rule 13e-3(c) under the
Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act of
1933.
c. [x] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: [ ].
CALCULATION OF FILING FEE
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Transaction Valuation* Amount of Filing Fee
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$10,071,700 $2,014.34
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*Based upon purchase of 1,751,600 shares at $5.75 per share.
[x] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount previously paid: $2,014.34
Form or registration no.: SC13E4
Filing party: Horsehead Resource Development Company, Inc.
Date filed: May 16, 1996
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<PAGE>
SCHEDULE 13E-3
INTRODUCTION
This Rule 13e-3 Transaction Statement (this "Statement") relates to the
offer by Horsehead Resource Development Company, Inc., a Delaware corporation
(the "Company"), to purchase up to 1,751,600 shares of its common stock, par
value $.01 per share (the "Shares"), for $5.75 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated May 16, 1996 (the "Offer to Purchase"), and in the related
Letter of Transmittal, dated May 16, 1996 (which together constitute the
"Offer"), copies of which are attached hereto as Exhibits (d)(1) and (d)(2),
respectively.
The cross reference sheet below is being supplied pursuant to General
Instruction F to Schedule 13E-3 and shows the location in the Issuer Tender
Offer Statement on Schedule 13E-4 (the "Schedule 13E-4") filed by the Company
with the Securities and Exchange Commission on the date hereof of the
information required to be included in response to the items of this Statement.
The information set forth in the Schedule 13E-4, which is attached hereto as
Exhibit (g), including all exhibits thereto, is expressly incorporated by
reference and responses to each item herein are qualified in their entirety by
the provisions of the Schedule 13E-4.
CROSS REFERENCE SHEET
ITEM IN WHERE LOCATED
SCHEDULE 13E-3 IN SCHEDULE 13E-4
Item 1(a) . . . . . . . . . . . . . . . . . . . Item 1(a)
Item 1(b) . . . . . . . . . . . . . . . . . . . Item 1(b)
Item 1(c) . . . . . . . . . . . . . . . . . . . Item 1(c)
Item 1(d) . . . . . . . . . . . . . . . . . . . *
Item 1(e) . . . . . . . . . . . . . . . . . . . *
Item 1(f) . . . . . . . . . . . . . . . . . . . Item 4
Item 2(a) . . . . . . . . . . . . . . . . . . . *
Item 2(b) . . . . . . . . . . . . . . . . . . . *
Item 2(c) . . . . . . . . . . . . . . . . . . . *
Item 2(d) . . . . . . . . . . . . . . . . . . . *
Item 2(e) . . . . . . . . . . . . . . . . . . . *
Item 2(f) . . . . . . . . . . . . . . . . . . . *
Item 2(g) . . . . . . . . . . . . . . . . . . . *
Item 3(a) . . . . . . . . . . . . . . . . . . . *
Item 3(b) . . . . . . . . . . . . . . . . . . . *
Item 4(a) . . . . . . . . . . . . . . . . . . . *
Item 4(b) . . . . . . . . . . . . . . . . . . . *
Item 5(a) - (g) . . . . . . . . . . . . . . . . . . . Item 3(a) - (j)
Item 6(a) . . . . . . . . . . . . . . . . . . . Item 2(a)
Item 6(b) . . . . . . . . . . . . . . . . . . . *
Item 6(c) . . . . . . . . . . . . . . . . . . . *
Item 6(d) . . . . . . . . . . . . . . . . . . . *
2
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Item 7(a) . . . . . . . . . . . . . . . . . . . Item 3
Item 7(b) . . . . . . . . . . . . . . . . . . . *
Item 7(c) . . . . . . . . . . . . . . . . . . . *
Item 7(d) . . . . . . . . . . . . . . . . . . . *
Item 8(a) . . . . . . . . . . . . . . . . . . . *
Item 8(b) . . . . . . . . . . . . . . . . . . . *
Item 8(c) . . . . . . . . . . . . . . . . . . . *
Item 8(d) . . . . . . . . . . . . . . . . . . . *
Item 8(e) . . . . . . . . . . . . . . . . . . . *
Item 8(f) . . . . . . . . . . . . . . . . . . . *
Item 9(a) - (c) . . . . . . . . . . . . . . . . . . . *
Item 10(a) . . . . . . . . . . . . . . . . . . . Item 1(b)
Item 10(b) . . . . . . . . . . . . . . . . . . . Item 4
Item 11 . . . . . . . . . . . . . . . . . . . Item 5
Item 12(a) . . . . . . . . . . . . . . . . . . . Item 1(b)
Item 12(b) . . . . . . . . . . . . . . . . . . . *
Item 13(a) . . . . . . . . . . . . . . . . . . . *
Item 13(b) . . . . . . . . . . . . . . . . . . . *
Item 13(c) . . . . . . . . . . . . . . . . . . . *
Item 14 . . . . . . . . . . . . . . . . . . . Item 7
Item 15(a) . . . . . . . . . . . . . . . . . . . *
Item 15(b) . . . . . . . . . . . . . . . . . . . Item 6
Item 16 . . . . . . . . . . . . . . . . . . . Item 8(e)
Item 17(a) . . . . . . . . . . . . . . . . . . . *
Item 17(b) . . . . . . . . . . . . . . . . . . . *
Item 17(c) . . . . . . . . . . . . . . . . . . . Item 9(c)
Item 17(d) . . . . . . . . . . . . . . . . . . . Item 9(a)
Item 17(e) . . . . . . . . . . . . . . . . . . . *
Item 17(f) . . . . . . . . . . . . . . . . . . . Item 9(f)
Item 17(g) . . . . . . . . . . . . . . . . . . . *
__________________________________
* The Item is inapplicable or the answer thereto is in the negative.
3
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SCHEDULE 13E-3
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) The name of the issuer is Horsehead Resource Development Company,
Inc., which has its principal executive offices at 110 East 59th Street, New
York, New York 10022.
(b) This Statement relates to the offer by the Company to purchase
the Shares at a price of $5.75 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase.
Reference is hereby made to the "Introduction," "Special Factors - Certain
Effects of the Offer," "The Offer - 1. Number of Shares; Extension of the
Offer" and "The Offer - 13. Effects of the Offer on the Market for Shares;
Registration Under the Exchange Act" of the Offer to Purchase, each of which is
herein incorporated by reference.
(c) Reference is hereby made to the "Introduction" and "The Offer -
6. Price Range of Shares; Dividends" of the Offer to Purchase, each of which is
herein incorporated by reference.
(d) Reference is hereby made to "The Offer - 6. Price Range of
Shares; Dividends" of the Offer to Purchase, which is herein incorporated by
reference.
(e) Not applicable.
(f) Reference is hereby made to the "Special Factors - Relationship
Between Major Stockholders" and "The Offer - 6. Price Range of Shares;
Dividends" of the Offer to Purchase, each of which is herein incorporated by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed by the Company, which is the issuer of the
class of equity securities which is the subject of the Rule 13e-3 transaction.
(a)-(d) and (g). Reference is hereby made to "Schedule I.
Directors and Executive Officers of the Company" and "Schedule II. Directors
and Executive Officers of HII" of the Offer to Purchase, each of which is herein
incorporated by reference.
(e)-(f). During the last five years, neither the Company nor
Horsehead Industries, Inc. nor, to their knowledge, any of the directors or
executive officers thereof has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which any such person was or is subject to a judgment, decree or final
order enjoining further violations of, or prohibiting activities subject to,
federal or state securities laws or finding any violation of those laws.
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ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a) Not applicable.
(b) Reference is hereby made to the "Special Factors - Relationship
Between Major Stockholders" and "The Offer - 11. Transactions and Arrangements
Concerning the Shares" of the Offer to Purchase, each of which is herein
incorporated by reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) Reference is hereby made to the "Introduction," "Special Factors -
Certain Effects of the Offer," "The Offer - 1. Number of Shares; Extension of
the Offer," "The Offer - 2. Procedure for Tendering Shares," "The Offer - 3.
Withdrawal Rights," "The Offer - 4. Acceptance for Payment of Shares and
Payment of Purchase Price," "The Offer - 5. Certain Conditions of the Offer,"
"The Offer - 12. Certain Legal Matters; Regulatory Approvals; No Appraisal
Rights," "The Offer - 14. Extension of Tender Period; Termination; Amendments"
and "The Offer - 16. Miscellaneous" of the Offer to Purchase, each of which is
herein incorporated by reference.
(b) None.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a)-(g) Reference is hereby made to the "Introduction," "Special Factors
- - Certain Effects of the Offer" and "The Offer - 13. Effects of the Offer on
the Market for Shares; Registration under the Exchange Act" of the Offer to
Purchase, each of which is herein incorporated by reference.
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) Reference is hereby made to "The Offer - 9. Source and Amount of
Funds" of the Offer to Purchase, which Section is herein incorporated by
reference.
(b) Reference is hereby made to "The Offer - 15. Fees and Expenses" of
the Offer to Purchase, which Section is herein incorporated by reference.
(c) Not applicable.
(d) Not applicable.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a) Reference is hereby made to the "Introduction," "Special Factors -
Purpose of the Offer" and "The Offer - 7. Background and Purpose of the Offer
and the Purchase" of the Offer to Purchase, each of which is herein incorporated
by reference.
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(b) Reference is hereby made to "Special Factors - Relationship Between
Major Stockholders" of the Offer to Purchase, which is herein incorporated by
reference.
(c) Reference is hereby made to the "Introduction," "Special Factors -
Purpose of the Offer" and "The Offer - 7. Background and Purpose of the Offer
and the Purchase" of the Offer to Purchase, each of which is herein incorporated
by reference.
(d) Reference is hereby made to the "Introduction," "Special Factors -
Certain Effects of the Offer," "The Offer - 7. Background and Purpose of the
Offer and the Purchase," "The Offer - 9. Source and Amount of Funds," "The
Offer - 10. Certain Federal Income Tax Considerations," "The Offer - 11.
Transactions and Arrangements Concerning the Shares" and "The Offer - 13.
Effects of the Offer on the Market for Shares; Registration under the Exchange
Act" of the Offer to Purchase, each of which is herein incorporated by
reference.
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a) Reference is hereby made to the "Special Factors - Potential Conflicts
of Interest" and "Special Factors - Position of the Board of Directors" of the
Offer to Purchase, each of which is herein incorporated by reference.
(b) Reference is hereby made to the "Introduction," "Special Factors -
Position of the Board of Directors," "Special Factors - Opinion of Financial
Advisor" and "Annex A. Opinion of Bear Stearns & Co., Inc." of the Offer to
Purchase, each of which is herein incorporated by reference.
(c) Reference is hereby made to "The Offer - 12. Certain Legal Matters;
Regulatory Approvals; No Appraisal Rights" of the Offer to Purchase, which is
herein incorporated by reference.
(d) Reference is hereby made to the "Introduction," "Special Factors -
Background of the Offer" and "Special Factors - Position of the Board of
Directors" of the Offer to Purchase, each of which is herein incorporated by
reference.
(e) Reference is hereby made to the "Introduction," "Special Factors -
Background of the Offer" and "Annex A. Opinion of Bear Stearns & Co., Inc." of
the Offer to Purchase, each of which is herein incorporated by reference.
(f) Not applicable.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a)-(c) Reference is hereby made to the "Introduction," "Special Factors
- - Background of the Offer," "Special Factors - Position of the Board of
Directors," "Special Factors - Opinion of Financial Advisor," "The Offer - 15.
Fees and Expenses" and "Annex A. Opinion of Bear Stearns & Co., Inc." of the
Offer to Purchase, each of which is herein incorporated by reference.
6
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ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a) Reference is hereby made to the "Introduction," "Special Factors -
Relationship Between Major Stockholders," and "The Offer - 7. Background and
Purpose of the Offer and the Purchase" of the Offer to Purchase, each of which
is herein incorporated by reference.
(b) Reference is hereby made to "The Offer - 11. Transactions and
Arrangements Concerning the Shares" of the Offer to Purchase, which is herein
incorporated by reference.
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES.
Reference is hereby made to the "Introduction," "Special Factors -
Relationship Between Major Stockholders," "The Offer - 7. Background and
Purpose of the Offer and the Purchase" and "The Offer - 11. Transactions and
Arrangements Concerning the Shares" of the Offer to Purchase, each of which is
herein incorporated by reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION.
(a) Reference is hereby made to the "Introduction," "Special Factors -
Potential Conflicts of Interest," "The Offer - 7. Background and Purpose of the
Offer and the Purchase" and "The Offer - 11. Transactions and Arrangements
Concerning the Shares" of the Offer to Purchase, each of which is herein
incorporated by reference.
(b) Reference is hereby made to "Special Factors - Background of the
Offer" of the Offer to Purchase, which is herein incorporated by reference.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) Reference is hereby made to "The Offer - 12. Certain Legal Matters;
Regulatory Approvals; No Appraisal Rights" of the Offer to Purchase, which is
herein incorporated by reference.
(b) None
(c) Not applicable
ITEM 14. FINANCIAL INFORMATION.
(a)-(b) Reference is hereby made to "The Offer - 8. Certain Information
Concerning the Company" of the Offer to Purchase, which Section is herein
incorporated by reference. The audited financial statements of the Company set
forth in the Company's Report on Form 10-K for the year ended December 31, 1995
are incorporated herein by reference. The unaudited financial statements of the
Company set forth in the Company's Report on Form 10-Q for the quarterly period
ended March 31, 1996 are incorporated herein by reference.
7
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ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) Not applicable.
(b) Reference is hereby made to the "Introduction" and "The Offer - 15.
Fees and Expenses" of the Offer to Purchase, each of which is herein
incorporated by reference.
ITEM 16. ADDITIONAL INFORMATION.
Reference is hereby made to the Offer to Purchase and the related Letter of
Transmittal, copies of which are attached hereto as Exhibits (d)(1) and (d)(2),
respectively, and are herein incorporated by reference in their entirety.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
(a) Not applicable.
(b) Opinion of Bear Stearns & Co., Inc.
(c)(1) Shareholders Agreement, dated as of July 26, 1988, among the
Company, HII and B.U.S. Environmental Services, Inc.
(c)(2) Amendment to Shareholders Agreement, dated July 24, 1990 among
B.U.S. Environmental Services, Inc., HII, Horsehead Investment
Management Corporation and the Company.
(d)(1) Offer to Purchase, dated May 16, 1996.
(d)(2) Letter of Transmittal, dated May 16, 1996.
(d)(3) Notice of Guaranteed Delivery, dated May 16, 1996.
(d)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees, dated May 16, 1996.
(d)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees, dated May 16, 1996.
(d)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(d)(7) Letter to the Company's Stockholders from the President and Chief
Executive Officer of the Company.
(d)(8) Press Release, dated May 16, 1996.
(e) Not applicable.
(f) None, except those materials referred to in (d)(1), (d)(2),
(d)(3), (d)(4), (d)(5) and (d)(6).
(g) Issuer Tender Offer Statement on Schedule 13E-4.
8
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
HORSEHEAD RESOURCE DEVELOPMENT
COMPANY, INC.
By: /s/ William M. Quirk
---------------------------------------------
William M. Quirk
President
Date: May 16, 1996
9
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Exhibit No. Description Page No.
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(b) Opinion of Bear Stearns & Co., Inc.
(c)(1) Shareholders Agreement, dated as of July
26, 1988, among the Company, HII and
B.U.S. Environmental Services, Inc.*
(c)(2) Amendment to Shareholders Agreement, dated
July 24, 1990 among B.U.S. Environmental
Services, Inc., HII, Horsehead Investment
Management Corporation and the Company.**
(d)(1) Offer to Purchase, dated May 16, 1996.
(d)(2) Letter of Transmittal, dated May 16, 1996.
(d)(3) Notice of Guaranteed Delivery, dated May
16, 1996.
(d)(4) Letter to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees,
dated May 16, 1996.
(d)(5) Letter to Clients for use by Brokers,
Dealers, Commercial Banks, Trust Companies
and Other Nominees, dated May 16, 1996.
(d)(6) Guidelines for Certification of Taxpayer
Identification Number on Substitute Form
W-9.
(d)(7) Letter to the Company's Stockholders from
the President and Chief Executive Officer
of the Company, dated May 16, 1996.
(d)(8) Press Release, dated May 16, 1996.
(g) Issuer Tender Offer Statement on Schedule
13E-4.
___________
* Filed as an Exhibit to Horsehead Resource Development Company, Inc.
Registration Statement on Form S-1 (File No. 33-34808) as filed with
the Securities and Exchange Commission.
** Filed as an Exhibit to Horsehead Resource Development Company, Inc.
Annual Report of the Company on Form 10-K for the fiscal year ended
December 31, 1990 as filed with the Securities and Exchange
Commission.
10
EXHIBIT (B)
OPINION OF BEAR STEARNS & CO., INC.
<PAGE>
[BEAR STEARNS LETTERHEAD]
May 16, 1996
Board of Directors
Horsehead Resource Development Company, Inc.
110 East 59th Street
New York, NY 10022
Dear Sirs:
We understand that Horsehead Resource Development Company, Inc. ("HRD") intends
to purchase all of the 1,751,600 shares of outstanding HRD common stock
currently held by holders other than Horsehead Industries, Inc. and B.U.S.
Environmental Services, Inc. and their respective affiliates (the "Public
Shareholders") at a price of $5.75 per share through a cash tender offer (the
"Transaction"). You have provided us with a draft offer to purchase (the
"Offer").
You have asked us to render our opinion as to whether the Transaction is fair,
from a financial point of view, to the Public Shareholders of HRD.
In the course of our analyses for rendering this opinion, we have:
1. reviewed the Offer;
2. reviewed HRD's Annual Reports to Shareholders and Annual
Reports on Form 10-K for the fiscal years ended December 31,
1990 through 1995, and its Quarterly Reports on Form 10-Q for
the 1993 through 1995 periods;
3. reviewed certain operating and financial information,
including estimates of future financial results, provided to us
by management relating to HRD's business and prospects;
4. met with certain members of HRD's senior management to discuss
its operations, historical financial statements and future
prospects;
5. reviewed the historical prices and trading volumes of the common
shares of HRD;
1
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6. reviewed publicly available financial data and stock market
performance data of companies which we deemed generally comparable
HRD;
7. reviewed the terms of recent acquisitions of companies which we
deemed generally comparable to HRD; and
8. conducted such other studies, analyses, inquiries and
investigations as we deemed appropriate.
In the course of our review, we have relied upon and assumed the accuracy and
completeness of the financial and other information provided to us by HRD. With
respect to HRD's estimated future financial results, we have assumed that they
have been reasonably prepared on bases reflecting the best currently available
estimates and judgments of the management of HRD as to the estimated future
performance of HRD. We have not assumed any responsibility for the information
or estimates of future financial results provided to us and we have further
relied upon the assurances of the management of HRD that it is unaware of any
facts that would make the information or estimates provided to us incomplete or
misleading in any material respect. In arriving at our opinion, we have not
performed or obtained any independent appraisal of the assets of HRD. Our
opinion is necessarily based on economic, market and other conditions, and the
information made available to us, as of the date hereof.
Based on the foregoing, it is our opinion that the Transaction is fair, from a
financial point of view, to the Public Shareholders of HRD.
We have acted as financial advisor to HRD in connection with the Transaction and
will receive a fee for such services.
Very truly yours,
BEAR, STEARNS & CO. INC.
By: _________________
Managing Director
2
EXHIBIT (D)(1)
OFFER TO PURCHASE
<PAGE>
OFFER TO PURCHASE FOR CASH
BY
HORSEHEAD RESOURCE DEVELOPMENT COMPANY, INC.
UP TO
1,751,600 SHARES OF ITS COMMON STOCK
AT $5.75 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JUNE 14, 1996, UNLESS THE OFFER IS EXTENDED.
Horsehead Resource Development Company, Inc., a Delaware corporation (the
"Company"), is offering to purchase up to 1,751,600 shares of its common stock,
par value $.01 per share ("Shares"), for $5.75 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which together constitute the
"Offer"). The Company reserves the right, in its sole discretion, to purchase
more than 1,751,600 Shares pursuant to the Offer. See Section 14.
-------------------------
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED.
THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 5.
-------------------------
The Shares are traded on the Nasdaq Stock Market's National Market (the
"NNM"). On May 6, 1996, the last reported sale before the announcement of the
terms of the Offer on the NNM was $4.125 per Share. On May 15, 1996, the last
full trading day before the commencement of the Offer, the closing bid price of
the Shares on the NNM was $6.00 per Share. Stockholders are urged to obtain a
current market quotation for the Shares.
UPON TERMINATION OF THE OFFER, THE SHARES WILL CEASE TO BE LISTED ON THE
NNM AND THE COMPANY WILL CEASE TO BE A REPORTING COMPANY UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED ("EXCHANGE ACT"). ACCORDINGLY, NO PUBLIC
MARKET FOR THE SHARES WILL EXIST AFTER THE OFFER. SEE SECTION 13.
-------------------------
THE BOARD OF DIRECTORS OF THE COMPANY BY MAJORITY VOTE HAS DETERMINED THAT
BASED UPON THE OPINION OF THE FINANCIAL ADVISOR OF THE COMPANY THE OFFER
DESCRIBED HEREIN IS FAIR TO, AND IN THE BEST INTERESTS OF, THE PUBLIC
STOCKHOLDERS OF THE COMPANY, AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES IN THE OFFER. SEE "SPECIAL FACTORS - BACKGROUND OF THE
OFFER."
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC") NOR HAS THE SEC PASSED UPON THE FAIRNESS OR
MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION
CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
--------------------------
The Information Agent for the Offer is:
Morrow & Co., Inc.
May 16, 1996
<PAGE>
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) complete and sign the Letter of Transmittal or a
facsimile copy thereof in accordance with the instructions in the Letter of
Transmittal, mail or deliver it and any other documents required by the Letter
of Transmittal to Chemical Mellon Shareholder Services, L.L.C., the depositary
for the Offer (the "Depositary"), and either mail or deliver the certificates
for such Shares to the Depositary along with the Letter of Transmittal or follow
the procedure for book-entry transfer set forth in Section 2, or (2) request
such stockholder's broker, dealer, commercial bank, trust company or other
nominee to effect the transaction for such stockholder. A stockholder having
Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such broker, dealer, commercial bank,
trust company or other nominee if such stockholder desires to tender such
Shares.
A stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available (or who cannot follow the procedure for
book-entry transfer on a timely basis) or who cannot transmit the Letter of
Transmittal and all other required documents to the Depositary before the
Expiration Date (as defined in Section 1) should tender such Shares by following
the procedure for guaranteed delivery set forth in Section 2.
---------------------------
Any questions or requests for assistance may be directed to the Information
Agent (as defined herein) at its address and telephone number set forth on the
back cover of this Offer to Purchase and requests for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent. Stockholders may also
contact their broker, dealer, commercial bank, trust company or other nominee
for assistance concerning the Offer.
---------------------------
NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER STOCKHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING
SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL.
IF MADE OR GIVEN, SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
<PAGE>
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SPECIAL FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
RELATIONSHIP BETWEEN MAJOR STOCKHOLDERS . . . . . . . . . . . . . . . . 3
BACKGROUND OF THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . 5
PURPOSE OF THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . 6
CERTAIN EFFECTS OF THE OFFER . . . . . . . . . . . . . . . . . . . . . . 6
POTENTIAL CONFLICTS OF INTEREST . . . . . . . . . . . . . . . . . . . . 8
POSITION OF THE BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . 9
OPINION OF FINANCIAL ADVISOR . . . . . . . . . . . . . . . . . . . . . . 10
THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
1. NUMBER OF SHARES; EXTENSION OF THE OFFER . . . . . . . . . . . . . 14
2. PROCEDURE FOR TENDERING SHARES . . . . . . . . . . . . . . . . . . 15
3. WITHDRAWAL RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . 17
4. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE . . 18
5. CERTAIN CONDITIONS OF THE OFFER . . . . . . . . . . . . . . . . . . 19
6. PRICE RANGE OF SHARES; DIVIDENDS . . . . . . . . . . . . . . . . . 20
7. BACKGROUND AND PURPOSE OF THE OFFER AND
THE PURCHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8. CERTAIN INFORMATION CONCERNING THE COMPANY . . . . . . . . . . . . 22
9. SOURCE AND AMOUNT OF FUNDS . . . . . . . . . . . . . . . . . . . . 24
10. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS . . . . . . . . . . . . . 24
11. TRANSACTIONS AND ARRANGEMENTS CONCERNING
THE SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS; NO APPRAISAL RIGHTS . 28
13. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
14. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS . . . . . . . . 30
15. FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . 31
16. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Schedule I Directors and Executive Officers of the Company
Schedule II Directors and Executive Officers of HII
Annex A Opinion of Bear, Stearns & Co. Inc.
<PAGE>
To the holders of common stock of Horsehead Resource Development Company, Inc.:
INTRODUCTION
Horsehead Resource Development Company, Inc., a Delaware corporation (the
"Company"), is offering to purchase up to 1,751,600 shares of its common stock,
par value $.01 per share ("Shares"), at the price of $5.75 per Share (the
"Purchase Price"), net to the seller in cash, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together constitute the "Offer").
Upon termination of the Offer, the Company intends to delist the Shares
from the Nasdaq Stock Market National Market (the "NNM") and to cease to be a
reporting company under the Securities Exchange Act of 1934, as amended
("Exchange Act"). Accordingly, no public market for the Shares will exist after
the Offer. See Section 13.
A special committee of independent directors ("Special Committee") of the
Company retained Bear, Stearns & Co. Inc. ("Bear Stearns") to determine the fair
price to be paid to the Company's public stockholders. Based upon the opinion
of Bear Stearns, the Special Committee reported to the full Board of Directors
that $5.75 per Share was fair to the Company's public stockholders.
The Board of Directors of the Company, after review of the opinion of Bear
Stearns, determined that the Company should make the Offer and that the $5.75
per Share price was fair to the Company's public stockholders.
THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
SECTION 5.
As of May 15, 1996, there were 36,237,500 Shares outstanding and 337,500
Shares were reserved for issuance in connection with outstanding stock options
under the Company's stock option plan. As of May 15, 1996, the Company's
directors and executive officers as a group beneficially own 34,607,600 Shares,
or 95.2% of the Shares outstanding, which includes 100,000 Shares issuable upon
exercise of stock options. The 1,751,600 Shares that the Company is offering to
purchase in the Offer represent approximately 4.8% of the fully-diluted Shares
outstanding as of May 15, 1996.
The Board of Directors has determined that it is no longer in the Company's
best interest that it remain a public company subject to the reporting
requirements of the Exchange Act. The Offer is intended to afford the Company's
public stockholders the opportunity to sell their Shares at a price which the
Company believes is fair to its public stockholders.
The Company has been informed by Horsehead Industries, Inc. ("HII"), which
owns 50.3% of the outstanding Shares, that HII does not intend to tender any
of its Shares. B.U.S. Environmental Services, Inc. ("BES"), a wholly owned
subsidiary of B.U.S. Berzelius Umwelt-Service AG ("BUS AG," and together with
BES, "BUS"), which owns 44.9% of the outstanding
<PAGE>
Shares, has declined to inform the Company of its intention with respect to its
Shares. See "SPECIAL FACTORS - Relationship Between Major Stockholders,"
"Background of the Offer" and "Potential Conflicts of Interest." After giving
effect to the repurchase of Shares by the Company pursuant to the Offer
(assuming 1,751,600 Shares are tendered by public stockholders and purchased
pursuant to the Offer), HII and BUS will own beneficially approximately 53% and
47% of the outstanding Shares, respectively.
Tendering stockholders will not be obligated to pay brokerage commissions,
solicitation fees or, subject to Instruction 6 of the Letter of Transmittal,
stock transfer taxes on the purchase of Shares by the Company. The Company will
pay all fees and expenses of Morrow & Co., Inc. (the "Information Agent") and
Chemical Mellon Shareholder Services, L.L.C. (the "Depositary"), in connection
with the Offer. See Section 15.
The Shares are traded on the NNM. On May 6, 1996, the last reported sale
before the announcement of the terms of the Offer on the NNM was $4.125 per
Share. On May 15, 1996, the last full trading day before the commencement of
the Offer, the closing bid price of the Shares on the NNM was $6.00 per Share.
See Section 6. Stockholders are urged to obtain a current market quotation for
the Shares.
2
<PAGE>
SPECIAL FACTORS
RELATIONSHIP BETWEEN MAJOR STOCKHOLDERS
Prior to its initial public offering, the Company was privately held by HII
and BUS. These major stockholders caused the Company to go public in 1990.
Since going public in 1990, the Company has not raised additional capital
through the public market.
It had been the intention of HII and BUS that the Company would exploit
BUS' technology in the United States and that BUS would exploit the Company's
technology in Europe. In 1994, the Company terminated its efforts to
commercialize in the United States certain technology of BUS and also asserted
claims against BUS that it had not offered technology controlled by BUS to the
Company and such technology is currently being marketed by a competitor of the
Company.
In an amendment to its Schedule 13D dated July 8, 1994, BUS disclosed its
intention to nominate a nine-member Board of Directors at the Company's Annual
Meeting originally called for June 30, 1994. BUS' proposal was for the Board to
consist of four designees of HII, two designees of BUS and three "independent"
directors selected by BUS. The Company was aware that BUS had contacted certain
of its public shareholders for the purpose of soliciting their votes for the BUS
slate. In order to avoid a potentially costly and divisive proxy contest, at
the Board of Directors meeting held on August 12, 1994, the Board of Directors
unanimously nominated a slate of nominees which both HII and BUS voted for at
the Annual Meeting held on September 7, 1994.
Until July 1995, the Company was 44.9% owned by HII and BUS, respectively.
Pursuant to a Standstill Agreement and a Shareholders Agreement, HII and BUS had
agreed not to acquire additional Shares or take certain other actions without
the consent or vote of the other major stockholder. In July 1995, after the
expiration of the Standstill Agreement, HII purchased 1,985,900 Shares at prices
of $8.00 to $10.25 per Share and, as a result, HII now beneficially owns 50.3%
of the outstanding Shares. Management believes that BUS currently owns 44.9% of
the outstanding Shares.
In August 1995, the Company filed suit (Horsehead Resource Development
------------------------------
Company, Inc. v. B.U.S. Environmental Services, Inc., et al., Docket No. 95 Civ.
- ------------------------------------------------------------
5802) in the U.S. District Court for the Southern District of New York against
BES, BUS AG and Lobbert Holding GmbH ("Lobbert") and certain of their officials
for violation of securities laws in failing to make adequate disclosures in
Schedule 13D filings with the Securities and Exchange Commission ("SEC") of the
nature and extent of Lobbert's interest in shares of the Company and of
information regarding environmental and criminal violations required by law to
be disclosed concerning Lobbert and its affiliates. Since this lawsuit was
commenced Lobbert and BUS have amended their Schedule 13D filings twice in
response to information identified by the Company. On February 20, 1996, the
Court ruled that Lobbert and its affiliates are required to disclose in
3
<PAGE>
their Schedule 13D filings all pending criminal proceedings against them
relating to environmental matters.
The Company currently sells most of its recovered zinc to Zinc Corporation
of America ("ZCA"), a division of HII, under a long-term sales agreement (the
"Zinc Sales Agreement"). ZCA has notified the Company that the pricing terms of
the Zinc Sales Agreement no longer reflect market terms and that pursuant to the
Zinc Sales Agreement, ZCA intends to negotiate new lower pricing terms. In
addition, the Company and ZCA each hold an equal ownership interest in Equidae
Partners, a partnership formed in 1990 to process, at a facility in
Bartlesville, Oklahoma, metal-bearing feedstocks to produce products for sale.
The facility is owned by the partnership and situated on land leased from ZCA.
ZCA has informed the Company that it does not want to continue the partnership
in its current form. The Company is considering several responses to ZCA,
including possibly offering to purchase ZCA's interest in the partnership.
The Company's management has expressed to the Board concerns regarding the
disadvantages which the Company encounters by virtue of being a single business
public company. Among those disadvantages are the availability of information
regarding the Company's business that the Company believes has been used to its
disadvantage by its competitors, the dependence of the Company on a single line
of business and customer for its zinc products and the small equity float
limiting the likelihood of equity appreciation. Management has considered a
number of alternatives to addressing these concerns, including "going private"
to eliminate the requirement that the Company file reports with the SEC and
diversifying the Company's business through a business combination. In this
connection, management has considered the possibility of seeking to combine with
ZCA on a non-leveraged basis. Management has reached the conclusion, however,
that the need to obtain a super majority shareholder vote (which would require
the affirmative vote of BUS) to issue the equity necessary for such a
combination together with HII's reluctance to sell ZCA to a public company for
illiquid securities made this alternative impractical as a near term solution
for the problems faced by the Company.
On March 7, 1996, HII by written consent as majority stockholder of the
Company removed Seymour Preston, Jr. as a director. Mr. Preston had been
designated by BUS for election at the 1994 Annual Meeting.
4
<PAGE>
BACKGROUND OF THE OFFER
In February 1994, because of the uncertainty of its prospects in the
industry, the competitive disadvantages to the Company of providing public
disclosure of its business operations, the relatively small public float and the
relative illiquidity of its publicly held shares, the Company considered
becoming a privately held corporation pursuant to a transaction in which the
common stock held by the public would have been purchased by the Company for
$5.75 per share in cash (the "Prior Proposal"). The Company engaged Bear
Stearns as a financial advisor to assist in its consideration of the Prior
Proposal. In April 1994, the Company received an opinion of Bear Stearns
stating that, based upon the matters described therein, the Prior Proposal was
fair to the public stockholders of the Company. However, because the directors
of the Company representing the interests of BUS stated that BUS would vote
against the Prior Proposal, the Company did not pursue the Prior Proposal at
that time.
In February 1996, the Board of Directors began consideration of purchasing
1,751,600 Shares (representing 4.8% of the outstanding Shares) held by the
public and established the Special Committee to consider and report to the full
Board of Directors a fair price for the repurchase of the Shares held by the
public stockholders. The Special Committee consists of Mark G. Solow and James
H. Dowling. (Messrs. Solow and Dowling currently are not, and have not been in
the past, officers or employees of either HII or BUS or any of their affiliates.
Mr. Dowling was elected by shareholders at the annual meeting on September 7,
1994, and Mr. Solow was appointed by unanimous vote of the directors on August
7, 1995.) The Special Committee retained Bear Stearns and based upon the report
of Bear Stearns, reported to the full Board of Directors that a price of $5.75
per Share for the Shares held by the Company's public stockholders would be
fair.
On April 30, 1996, the Board of Directors received the report of the
Special Committee, a review by Bear Stearns of the procedures and basis for its
opinion and the opinion of Bear Stearns that, as of the date of such opinion,
based upon and subject to the considerations set forth therein, the Offer at
$5.75 per Share was fair, from a financial point of view, to the public
stockholders of the Company. A majority of the Company's Board of Directors
(including both members of the Special Committee) approved the making of the
Offer. None of the Company's directors are employed by the Company. Gunter
Okon and Rolf Kola, the two designees of BUS on the Company's Board of
Directors, voted against the Offer. Messrs. Okon and Kola, who had elected not
to attend the meeting in person and participated by teleconference, explained
the reason for their dissent, noting that they were not physically present at
the meeting and could not participate in person (but only by telephone) in the
review by Bear Stearns of the basis for its opinion. See "SPECIAL FACTORS --
Potential Conflicts of Interest."
5
<PAGE>
PURPOSE OF THE OFFER
The purpose of the Offer is to enable public stockholders of the Company to
sell their Shares at a fair price and without the usual transaction costs
associated with market sales, before the Company's Shares are delisted from the
NNM and deregistered under the Exchange Act. Management believes that, even as
a public stock, there is a very limited market for the Shares, especially for
the sale of large blocks of Shares, and that the Company's public stockholders
derive little benefit from the Company's status as a publicly-held corporation.
The limited supply of Shares traded in the public market and the predominant
ownership by HII and BUS provides little opportunity for a public stockholder to
realize the value of his investment in the Company after payment of commissions
and other market transaction costs. To management's knowledge, no analysts
follow the Company or provide any research with regard to the Company. The
Offer is intended to afford public stockholders the opportunity to sell their
Shares in light of the current relative illiquidity and lack of public float of
the Shares. In addition, since going public in 1990, the Company has paid a
total of $0.18 per share in dividends and does not expect to pay further
dividends in the foreseeable future. Moreover, the Offer will allow public
stockholders of the Company to dispose of an investment in a company which is
owned by two large stockholders which are unable to agree on the proper course
of business for the Company's future. Following consummation of the Offer, the
Company will delist the Shares from the NNM and terminate registration of the
Shares under the Exchange Act as soon as possible.
Since 1994, management of the Company has recommended to the Board of
Directors that the Company repurchase the Shares held by the public and thereby
cease to be a public company. Since the Company has not diversified, management
believes that as a public company with essentially one product (i.e., the
processing of EAF dust), the Company suffers a severe competitive disadvantage.
In particular, competitors of the Company can easily analyze the Company's
operations which puts the Company at a competitive disadvantage in the
marketplace. In addition, the Company incurs costs related to its status as a
public reporting corporation under the federal securities laws including
indirect costs as a result of, among other things, the executive time expended
to prepare and review various filings, furnish information to stockholders and
attend to other stockholder matters. Termination of registration as a public
company eliminates the costs and expenses of various federal securities filings
incurred with respect to regulatory and reporting requirements of the Company
and reduces the amount of time devoted by management in connection therewith.
CERTAIN EFFECTS OF THE OFFER
The trading of the Shares is currently reported on the NNM. Following the
Offer, the Company intends to delist the Shares from the NNM and deregister
under the Exchange Act. As of March 11, 1996, there were 1,751,600 Shares
publicly held and 190 shareholders of record of the outstanding Shares. Due to
the foregoing number of record holders, the Shares no longer meet the
requirements for continued quotation on the NNM. Pursuant to the NNM's
published guidelines, shares of common stock are not eligible to be included for
listing if, among other things, the number of shares publicly held falls below
200,000, the number of holders of shares
6
<PAGE>
falls below 400 or the aggregate market value of such publicly held shares does
not exceed $1,000,000. If these standards are not met, quotations might
continue to be published in the NASDAQ SmallCap Market, Inc., but if the number
of holders of the shares falls below 300, or if the number of publicly held
shares falls below 100,000, or there is not at least one market maker for the
shares, NASD rules provide that the securities would no longer be "authorized"
for NASDAQ reporting and NASDAQ would cease to provide any quotations. Shares
held directly or indirectly by an officer or director of the issuer or by any
beneficial owner of more than 10% of the shares of the issuer will ordinarily
not be considered as being publicly held for this purpose. In the event the
Shares were no longer quoted on NASDAQ, quotations might still be available from
other sources. The extent of the public market for the Shares and availability
of such quotations would, however, depend upon the number of holders of Shares
remaining at such time, the interest in maintaining a market in the Shares on
the part of securities firms, the termination of registration under the Exchange
Act as described below and other factors.
The Shares are currently "margin securities" under the rules of the Board
of Governors of the Federal Reserve System (the "Federal Reserve Board"). Among
other things, this has the effect of allowing brokers to extend credit on the
collateral of such Shares. Depending upon factors similar to those described
above regarding listing and market quotations, it is likely that, following the
purchase of the Shares pursuant to the Offer the Shares will no longer
constitute "margin securities" for purposes of the Federal Reserve Board's
margin regulations. In such event, Shares could no longer be used as collateral
for margin loans made by brokers.
The Shares are currently registered under the Exchange Act which requires,
among other things, that the Company furnish certain information to its
stockholders and to the SEC and comply with the SEC's proxy rules in connection
with meetings of the Company's stockholders. Registration of the Shares under
the Exchange Act is planned to be terminated upon application by the Company to
the SEC promptly following the termination of the Offer.
The termination of the registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its stockholders and to the SEC and would render inapplicable certain
provisions of the Exchange Act, including requirements that the Company file
periodic reports (including financial statements), the requirements of Rule 13e-
3 under the Exchange Act with respect to "going private" transactions,
requirements that the Company's officers, directors and ten-percent shareholders
file certain reports concerning ownership of the Company's equity securities and
provisions that any profit by such officers, directors and shareholders through
purchases and sales of the Company's equity securities within any six-month
period may be recaptured by the Company. In addition, the ability of
"affiliates" of the Company and other persons to dispose of Shares which are
"restricted securities" under Rule 144 under the Securities Act of 1933, as
amended, may be impaired or eliminated. If registration of the Shares under the
Exchange Act were terminated, the Shares would no longer be "margin securities"
or eligible for NNM reporting.
Except as disclosed in this section and elsewhere in this Offer to
Purchase, the Company has no other present plans or proposals that relate to or
would result in (i) the acquisition by any person of additional securities of
the Company,
7
<PAGE>
or the disposition of securities of the Company, (ii) an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation or sale or transfer of a material amount of assets, involving the
Company, (iii) any change in the present Board of Directors of the Company or
management of the Company, including, but not limited to, a plan or proposal to
change the number or term of the directors, to fill any existing vacancy on the
Board of Directors or to change any material term of the employment contract of
any executive officer, (iv) any material change in the present dividend rate or
policy or indebtedness or capitalization of the Company, (v) any other material
change in the Company's corporate structure or business or (vi) any change in
the Company's charter, by-laws or instruments corresponding thereto or any other
actions which may impede the acquisition of control of the Company by any
person.
Following the Offer and deregistration of the Shares under the Exchange
Act, the Company may take certain action to eliminate any interests in the
Shares held by remaining minority public stockholders of the Company including,
but not limited to, merging out any remaining minority public stockholders of
the Company on such terms and conditions as the Company may determine.
POTENTIAL CONFLICTS OF INTEREST
Stockholders should be aware that members of the Board of Directors of the
Company, other than the members of the Special Committee, have certain interests
which may present them with actual or potential conflicts of interest in
connection with the Offer. William E. Flaherty, David W. Judelson, David O.
Carpenter and Tinkham Veale II are members of the Board of Directors of the
Company and are also stockholders and members of the board of directors of HII.
William M. Quirk is President and Chief Executive Officer of the Company and
Senior Vice President of HII. Peter W. Nelson is Senior Vice President of the
Company and Vice President of HII. Robert P. Marshall is Vice President,
General Counsel and Secretary of the Company and Vice President and General
Counsel of HII. Gunter Okon is a member of the Board of Directors of the
Company and is also Chairman of the Board of Directors, President and Treasurer
of BES and Speaker of the Executive Board of BUS AG. Rolf Kola is a member of
the Board of Directors of the Company and is also a Director and Vice President
of BES and a member of the Executive Board of BUS AG. Gunter Okon and Rolf
Kola, designees of BUS, were the only directors of the Company who voted against
the Offer. The Company has been informed that BUS has publicly disclosed that
it may be seeking to sell its Shares of the Company. BUS has not approached HII
or the Company concerning the purchase of such Shares.
8
<PAGE>
POSITION OF THE BOARD OF DIRECTORS
The Board of Directors, based on the recommendation of its advisors and
after considering the purposes and effects of the Offer and other factors, has
concluded that the Offer is fair to, and in the best interest of, the public
stockholders of the Company and has approved the making of the Offer. The Board
of Directors considered that the Offer is being made available to all public
stockholders on the same basis and each such stockholder may choose whether or
not to tender any Shares pursuant to the Offer. In approving making the Offer
and determining that the Offer is fair to, and in the best interest of, the
public stockholders of the Company, the Board of Directors consulted with its
legal and financial advisors as well as the Company's management and considered
numerous factors, including but not limited to (i) the business, operations,
capital structure, earnings, properties and prospects of the Company, as well as
the risks associated therewith, (ii) the fact that the Offer will provide public
stockholders with an opportunity to receive a fair price for their tendered
Shares prior to the Company's delisting and deregistering, (iii) recent market
prices for the Shares as well as market prices for the past several years, (iv)
the opinion of Bear Stearns, a nationally recognized investment banking firm,
that, based upon the matters described therein, as of the date of such opinion,
the Offer is fair from a financial point of view, to the public stockholders of
the Company and (v) the relatively small number of Shares (4.8% of the
outstanding shares) held by public stockholders. In light of the number and
variety of factors that the Board of Directors considered in connection with its
evaluation of the Offer, it did not find it practicable to, and did not,
quantify or otherwise assign relative weights to these factors.
The resolution of the Board of Directors approving the Offer authorizes the
Company to repurchase 1,751,600 Shares from its public stockholders. BUS has
declined to disclose whether it intends to tender any of its Shares. In the
event BUS tenders any of its Shares, the Board of Directors will determine
whether to increase the number of Shares to be repurchased pursuant to BUS. See
Section 5.
THE BOARD OF DIRECTORS OF THE COMPANY BY MAJORITY VOTE HAS DETERMINED THAT
BASED UPON THE OPINION OF THE FINANCIAL ADVISOR OF THE COMPANY THE OFFER
DESCRIBED HEREIN IS FAIR TO, AND IN THE BEST INTERESTS OF, THE PUBLIC
STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES IN THE OFFER.
9
<PAGE>
OPINION OF FINANCIAL ADVISOR
The Special Committee of the Board of Directors of the Company retained
Bear Stearns by letter agreement dated March 13, 1996 to act as its financial
advisor and to render its opinion to the Company's Board of Directors as to the
fairness of the Offer, from a financial point of view, to the public
stockholders of the Company.
Bear Stearns delivered its oral opinion on April 30, 1996 to the Board of
Directors of the Company to the effect that, as of such date, the Offer was
fair, from a financial point of view, to the Company's public stockholders.
Bear Stearns also has delivered an updated written opinion, dated the date of
this Offer to Purchase to the Company's Board of Directors to the effect that,
as of such date, the Offer was fair, from a financial point of view, to the
public stockholders of the Company. No restrictions were imposed by the
Company's Board of Directors upon Bear Stearns with respect to the
investigations made or procedures followed by Bear Stearns in rendering its
opinions.
The full text of Bear Stearns' fairness opinion, dated the date of this
Offer to Purchase, which sets forth certain assumptions made, certain procedures
followed and certain matters considered by Bear Stearns, is attached as Annex A
to this Offer to Purchase. As set forth therein, Bear Stearns relied upon and
assumed the accuracy and completeness of the financial and other information
provided to it by the Company. With respect to the Company's estimated future
financial results, Bear Stearns assumed that such estimates were reasonably
prepared on bases reflecting the best currently available estimates and
judgments of the management of the Company as to the estimated future
performance of the Company. Bear Stearns did not perform any independent
verification of the information or estimates provided to it and Bear Stearns
relied upon the assurances of the management of the Company that they are
unaware of any facts that would make the information or estimates provided to
Bear Stearns incomplete or misleading in any material respect. In arriving at
its opinion, Bear Stearns did not perform or obtain any independent appraisal of
the assets and liabilities of the Company, nor was it furnished with any such
appraisals. Bear Stearns' opinion is necessarily based on economic, market and
other conditions, and the information made available to it as of the date of its
opinion. Bear Stearns' opinion addresses only the fairness of the Offer from a
financial point of view, and does not constitute a recommendation to any
stockholder of the Company as to if such stockholder should tender in the Offer.
The summary of the opinion of Bear Stearns set forth in this Offer to
Purchase is qualified in its entirety by reference to the full text of such
opinion. The Company's stockholders are urged to, and should, read this opinion
carefully in its entirety in conjunction with this Offer to Purchase for
assumptions made, matters considered and limits of the review by Bear Stearns.
In rendering its updated fairness opinion, Bear Stearns, among other
things: (i) reviewed the Offer to purchase in substantially final form, (ii)
reviewed the Company's Annual Report to Stockholders and its Annual Report on
Form 10-K for the fiscal years ended December 31, 1990 through 1995, (iii)
reviewed certain operating and financial information, including projections,
10
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provided to Bear Stearns by the management of the Company, (iv) met with certain
members of the Company's senior management to discuss the Company's operations,
historical financial statements and future prospects, (v) reviewed the
historical stock prices, trading activity and valuation parameters of the
Company's common stock, (vi) reviewed publicly available financial data and
stock market performance data of companies which Bear Stearns deemed generally
comparable to the Company, (vii) reviewed the terms of recent acquisitions of
companies which Bear Stearns deemed generally comparable to the Company and
(viii) conducted such other studies, analyses, inquiries and investigations as
Bear Stearns deemed appropriate.
The following is a brief summary of the financial, valuation and
comparative analyses used by Bear Stearns in connection with providing its
opinion to the Board of Directors of the Company.
Comparative Company Analysis. Using publicly available data, Bear Stearns
compared selected historical and estimated future financial and operating data,
and selected stock market data, of the Company to the corresponding data of
EnviroSource, Inc. ("EnviroSource"); IMCO Recycling, Inc. ("IMCO"); and Rollins
Environmental Services, Inc. ("Rollins") (collectively, the "Peer Group").
In comparing the Company's recent operating performance to the recent
operating performance of EnviroSource, IMCO and Rollins, Bear Stearns noted,
among other things, that (i) the Company's growth rate in revenues for the three
year and one year periods ended December 31, 1995 were 0.2% and 3.1%, compared
with average growth rates for the Peer Group during the same periods of 18.7%
and 20.5%; (ii) the Company's growth rate in earnings before interest and taxes
("EBIT") for the three year and one year periods ended December 31, 1995 were
3.1% and (10.9%) compared to average growth rates for the Peer Group of 21.8%
and 14.8% (excluding Rollins which reported losses in the most recent period and
for whom growth rates were not meaningful); (iii) for the year ended December
31, 1996 the Company estimated a decline in earnings per share ("EPS") ranging
from 44.4% to 6.7% compared to an average growth rate of 24.4% for the Peer
Group (excluding Rollins for which data was not meaningful); (iv) the Company's
earnings before interest, taxes, depreciation and amortization ("EBITDA") as a
percent of sales for the latest twelve months ("LTM") ended December 31, 1995
was 36.1% compared to 28.7% and 21.4% for EnviroSource and IMCO, respectively
(Rollins reported EBITDA losses) and (v) the Company's latest twelve month
return on equity as 13.2% compared to 26.9% and 15.0% for EnviroSource and IMCO,
respectively (Rollins reported a negative return on equity of 14.7%).
Bear Stearns performed an analysis of the Company's financial performance
and stock market trading data by comparing the stock price to latest twelve
months earnings per share (LTM EPS), stock price to estimated 1996 earnings per
share (1996 EPS), market equity value plus debt minus cash ("Enterprise Value")
to LTM EBITDA and EBIT, and Enterprise Value to estimated 1996 EBITDA and EBIT
of the Company to the Peer Group. Bear Stearns performed such analysis using
closing stock prices on April 12, 1996. In connection with such analysis, Bear
Stearns noted, among other things, that (i) the multiple of stock price to LTM
EPS was 12.7x for the Company compared to 16.7x for EnviroSource and 20.4x for
IMCO; (ii) the
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multiple of stock price to estimated 1996 EPS ranged from 23.0x to 13.7x for the
Company compared to 12.9x for EnviroSource and 16.8x for IMCO; (iii) the
multiple of Enterprise Value to LTM revenues was 1.9x for the Company compared
to 1.7x for EnviroSource and 1.9x for IMCO; (iv) the multiples of Enterprise
Value to LTM EBITDA and estimated 1996 EBITDA were 5.2x and a range of 7.8x to
5.5x for the Company compared to 6.0x and 5.8x for EnviroSource and 8.9x and
7.0x for IMCO; and (v) the multiples of Enterprise Value to LTM EBIT and
estimated 1996 EBIT were 7.4x and a range of 13.6x to 8.0x for the Company
compared to 10.7x and 9.9x for EnviroSource and 12.9x and 9.2x for IMCO.
Valuation multiples for Rollins were deemed not meaningful as a result of
Rollins' reported losses.
Precedent Transaction Analysis. Bear Stearns reviewed and analyzed
publicly available information for six transactions in the metals reclamation
and hazardous waste industries. The transactions considered included the
acquisitions of Allwaste Inc. by Equus II Inc.; Rust Environment Services, Inc.
by OHM Group; Aptus, Inc. by Rollins Environmental Services, Inc.; Chemical
Waste Management by WMX Technologies Inc.; HazWaste Industries, Inc. by Earth
Technology Corporation, USA; and Burlington Environmental, Inc. by Philip
Environmental, Inc. Although these various merger and acquisition transactions
were used for comparison purposes, none of such transactions is directly
comparable to the Company or the Offer. Accordingly, an analysis of the results
described below is not mathematical; rather it involves complex considerations
and judgments concerning differences in financial and operating characteristics
and other factors that would necessarily affect the value of the Company versus
the acquisition values of the companies to which it was being compared.
For the selected transactions, Bear Stearns reviewed the financial terms
and prices paid in such transactions in terms of the equity purchase price plus
assumed debt and preferred stock net of cash ("Total Transaction Value") of such
transactions as a multiple of sales, EBITDA and EBIT for the LTM period prior to
the announcement of such transactions. The average ratio of the Total
Transaction Value to LTM sales, EBITDA and EBIT was 0.7x, 7.0x and 11.9x,
respectively, for the six transactions selected. These ratios compare to 1.9x
LTM sales, 5.2x LTM EBITDA and 7.4x LTM EBIT for the Company pursuant to the
terms of the Offer. Bear Stearns noted that the transaction multiples were
calculated using LTM earnings and, that with respect to the Company, do not
reflect management's assessment of the impact on future earnings of changing
industry conditions and a more competitive operating environment. Bear Stearns
also noted that in the context of evaluating comparable acquisitions, many of
the transactions selected involved a sale of a majority of the outstanding
common stock of the acquired company and, therefore, the resulting valuation
multiples reflected a change of control premium which, with respect to the
Offer, would not be applicable.
Discounted Cash Flow Analysis. Bear Stearns performed a discounted cash
flow analysis upon the estimate of future financial results of the Company. In
conducting such analysis, Bear Stearns relied on certain assumptions, future
financial estimates and other information provided by the management of the
Company. Using discount rates ranging from 11% to 15% per annum reflecting Bear
Stearns' estimate of the Company's weighted average after-tax cost of capital,
Bear Stearns calculated the present value of the estimated future Free Cash
Flows (as defined below) for each of the twelve-month periods ending December
31, 1996 through 1999 and the
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present value of the terminal value (the "Terminal Value") of the Company at
December 31, 1999. As used in Bear Stearns' analysis, "Free Cash Flow" means,
for each fiscal year, earnings before interest, taxes, depreciation and
amortization, less estimated taxes, less capital expenditures and less
incremental working capital requirements. The Terminal Value was computed by
applying multiples of between 5.0 times and 7.0 times the forecasted EBITDA of
the Company for the twelve-month period ended December 31, 1999. The range of
multiples and discount rates used in the analysis described above were chosen to
reflect the growth prospects and relative risk of the Company's operations and
were selected by Bear Stearns based on its review (including discussions with
the management of the Company) of the results and prospects of the Company and
Bear Stearns' expertise in securities valuation generally. To calculate the
aggregate net present value of the equity of the Company, Bear Stearns
subtracted net debt (total debt less cash and cash equivalents) of the Company
from the sum of the present value of the estimated future Free Cash Flows and
the present value of the Terminal Value. Based on this analysis and the
assumptions set forth above, Bear Stearns determined that the proposed Offer
price of $5.75 per Share was in excess of the per share values calculated
pursuant to this analysis.
Historical Trading Analysis. Bear Stearns reviewed the weekly trading
prices of the Company's common stock from January 1, 1993 to April 12, 1996.
Bear Stearns also compared the weekly trading prices of the Company's common
stock versus the Peer Group, the Dow Jones Pollution Control Index (which
includes Browning-Ferris Industries, Dames & Moore, Inc., Donaldson Company,
Ogden Corporation, Rollins Environmental Services, Inc. and WMX Technologies)
and the S&P 500. Bear Stearns noted that the price of the Company's common
stock traded in a range of $23/4 to $73/4 per share during 1993, $21/2 to $61/8
per share during 1994, $33/8 to $71/4 per share during 1995 and $37/8 to $6 per
share from January 1, 1996 to April 12, 1996. Bear Stearns also noted that the
proposed Offer of $5.75 per Share represented a premium of 10.6% and 28.8% to
the average closing stock price for the one month and three month periods,
respectively, prior to April 12, 1996.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary set forth above, without considering
the analysis as a whole, could create an incomplete view of the processes
underlying Bear Stearns' opinion. In arriving at its opinion, Bear Stearns
considered the results of all such analyses. In its analysis, Bear Stearns made
numerous assumptions with respect to business, industry performance, economic
conditions and other factors, many of which are beyond the control of Bear
Stearns or the Company. No company or transaction used in the above analysis
for comparison is identical to the Company or the proposed Offer. Accordingly,
an analysis of the results of the foregoing involves complex considerations and
judgments concerning differences in financial and operating characteristics and
other factors that could affect the public trading value of the companies being
compared. Analyses based upon forecasts of future results are not necessarily
indicative of actual future results, which may be significantly more or less
favorable than suggested by such analyses. The analyses were prepared by Bear
Stearns solely for purposes of providing its opinion as to the fairness of the
Offer, from a financial point of view, to the public stockholders of the
Company. As described above, Bear Stearns' opinion and presentation to the
Company's Board of Directors
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was one of many factors taken into consideration by the Board of Directors in
making its determination to approve the Offer. The foregoing summary does not
purport to be a complete description of the analysis performed by Bear Stearns.
In the ordinary course of its business, Bear Stearns may actively trade the
equity securities of the Company for its own account and for the accounts of
customers and, accordingly, may, at any time, hold a long or short position in
such securities.
Pursuant to a letter agreement, dated as of March 13, 1996, the Company
agreed to pay Bear Stearns a fee of $400,000 for rendering its opinion in
connection with the Offer. The Company has also agreed to reimburse Bear
Stearns for its reasonable out-of-pocket expenses, including the reasonable fees
and disbursements of counsel, and to indemnify Bear Stearns and certain related
persons against certain liabilities in connection with the engagement of Bear
Stearns, including certain liabilities under the federal securities laws.
THE OFFER
1. NUMBER OF SHARES; EXTENSION OF THE OFFER
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment (and will thereby purchase) up to 1,751,600 Shares or such
lesser number of Shares as are properly tendered (and not withdrawn in
accordance with Section 3) before the Expiration Date at the Purchase Price.
The term "Expiration Date" means 12:00 Midnight, New York City time, on Friday,
June 14, 1996, unless and until the Company shall have extended the period of
time for which the Offer is open, in which event the term "Expiration Date"
shall refer to the latest time and date at which the Offer, as so extended by
the Company, shall expire. For a description of the Company's rights to extend
the period of time during which the Offer is open and to delay, terminate or
amend the Offer, see Section 14. See also Section 5.
The Company reserves the right, in its sole discretion, at any time or from
time to time, to extend the period of time during which the Offer is open by
giving oral or written notice of such extension to the Depositary and making a
public announcement thereof. See Section 14. There can be no assurance,
however, that the Company will exercise its right to extend the Offer.
The Offer is not conditioned upon any minimum number of Shares being
tendered. The Offer is, however, subject to certain other conditions. See
Section 5.
All Shares purchased pursuant to the Offer will be purchased at the
Purchase Price, net to the seller in cash. The Company reserves the right, in
its sole discretion, to purchase more than 1,751,600 Shares pursuant to the
Offer. If (a) the Company (i) increases or decreases the price to be paid for
Shares or (ii) decreases the number of Shares being sought, and (b) the Offer is
scheduled to expire at any time earlier than the expiration of a period ending
on the tenth business day from and including the date that notice of such
increase or decrease is first published, sent or given in the manner specified
in Section 15, the Offer will be extended until the expiration of such ten
business day period. For the purposes of the Offer, a "business day"
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means any day other than a Saturday, Sunday or federal holiday and consists of
the time period from 12:01 A.M. through 12:00 Midnight, New York City time.
All Shares not purchased pursuant to the Offer will be returned to the
tendering stockholders at the Company's expense as promptly as practicable
following the Expiration Date. The Company, upon the terms and subject to the
conditions of the Offer, will purchase at the Purchase Price all Shares tendered
and not withdrawn.
2. PROCEDURE FOR TENDERING SHARES
Proper Tender of Shares. For Shares to be properly tendered pursuant to
the Offer:
(a) the certificates for such Shares (or confirmation of receipt of
such Shares pursuant to the procedure for book-entry transfer set forth
below), together with a properly completed and duly executed Letter of
Transmittal (or a facsimile copy thereof) with any required signature
guarantees, and any other documents required by the Letter of Transmittal,
must be received before the Expiration Date by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase; or
(b) the tendering stockholder must comply with the guaranteed
delivery procedure set forth below.
Signature Guarantees and Methods of Delivery. No signature guarantee is
required on the Letter of Transmittal if the Letter of Transmittal is signed by
the registered owner of the Shares (which term, for purposes of this Section 2,
includes any participant in The Depository Trust Company or the Philadelphia
Depository Trust Company (collectively, the "Book-Entry Transfer Facilities")
whose name appears on a security position listing as the owner of the Shares)
tendered therewith, and payment and delivery are to be made directly to such
registered owner at such owner's address shown on the records of the Company, or
if Shares are tendered for the account of a financial institution (including
most banks, savings and loan associations, and brokerage houses) that is a
participant in the Securities Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Program or the Stock Exchange Medallion
Program (each such entity being hereinafter referred to as an "Eligible
Institution"). In all other cases , all signatures on the Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instruction 1 of the Letter
of Transmittal. If a certificate representing Shares is registered in the name
of a person other than the person signing a Letter of Transmittal, or if payment
is to be made, or certificates for Shares not purchased or tendered are to be
issued, to a person other than the registered owner, the certificate must be
endorsed or accompanied by an appropriate stock power, in either case signed
exactly as the name of the registered owner appears on the certificate, with the
signature on the certificate or stock power guaranteed by an Eligible
Institution. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of certificates for such Shares (or a timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at one of the Book-Entry
Transfer Facilities), a properly completed and duly executed Letter of
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Transmittal (or a facsimile thereof) and any other documents required by the
Letter of Transmittal.
The method of delivery of all documents, including stock certificates, the
Letter of Transmittal and any other required documents, is at the election and
risk of the tendering stockholder. If delivery is by mail, registered mail with
return receipt requested, properly insured, is recommended.
Federal Backup Withholding. Absent an exemption applying under the
applicable law concerning "backup withholding" of federal income tax, the
Depositary will be required to withhold, and will withhold, 31% of the gross
proceeds otherwise payable to a stockholder (or other payee) pursuant to the
Offer unless the stockholder (or other payee) provides such person's tax
identification number (social security number or employer identification
number), certifies that such number is correct and certifies that such person is
not subject to backup federal income tax withholding. Each tendering
stockholder, other than a non-corporate foreign stockholder, should complete and
sign the main signature form and the Substitute Form W-9 included as part of the
Letter of Transmittal so as to provide the information and certifications
necessary to avoid backup withholding, unless an applicable exemption exists and
is proved in a manner satisfactory to the Company and the Depositary. Non-
corporate foreign stockholders generally should complete and sign a Form W-8,
Certificate of Foreign Status, a copy of which may be obtained from the
Depositary, in order to avoid backup withholding. Backup withholding is not an
additional tax, and any taxes so withheld may be claimed as a credit against
such stockholder's federal income tax liability.
For a discussion of certain other federal income tax consequences of the
Offer, see Section 10.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares at each of the Book-Entry Transfer Facilities for purposes of the
Offer within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in a Book-Entry Transfer Facility's
system may make book-entry delivery of the Shares by causing such facility to
transfer such Shares into the Depositary's account in accordance with such
facility's procedure for such transfer. Even though delivery of Shares may be
effected through book-entry transfer into the Depositary's account at one of the
Book-Entry Transfer Facilities, a properly completed and duly executed Letter
of Transmittal (or a facsimile thereof), with any required signature guarantees
and other required documents, must, in any case, be transmitted to and received
by the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase before the Expiration Date, or the guaranteed delivery
procedure set forth below must be followed. Delivery of the Letter of
Transmittal and any other required documents to one of the Book-Entry Transfer
Facilities does not constitute delivery to the Depositary.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's stock certificates are not immediately
available (or the procedure for book-entry transfer cannot be followed on a
timely basis) or time will not permit the Letter of
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Transmittal and all other required documents to reach the Depositary before the
Expiration Date, such Shares may nevertheless be tendered provided that all the
foregoing conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
(b) the Depositary receives (by hand, mail or facsimile transmission)
before the Expiration Date, a properly completed and duly executed Notice
of Guaranteed Delivery substantially in the form the Company has provided
with this Offer to Purchase; and
(c) the certificates for all tendered Shares in proper form for
transfer (or confirmation of book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities),
together with a properly completed and duly executed Letter of Transmittal
(or a facsimile thereof) and other documents required by the Letter of
Transmittal, are received by the Depositary within three NNM trading days
after the date of execution of such Notice of Guaranteed Delivery.
Validity of Delivery; Rejection of Shares; Waiver of Defects; No Obligation
To Give Notice of Defects. All questions as to the number of Shares to be
accepted and the validity, form, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares will be determined by the
Company, in its sole discretion, which determination shall be final and binding
on all parties. The Company reserves the absolute right to reject any or all
tenders determined by it not to be in proper form or the acceptance for payment
of which may, in the opinion of the Company's counsel, be unlawful. The Company
also reserves the absolute right to waive any of the conditions of the Offer
(except as otherwise provided in Section 5) and any defect or irregularity in
the tender of any particular Shares. No tender of Shares will be deemed
properly made until all defects or irregularities have been cured or waived.
None of the Company, the Information Agent, the Depositary or any other person
is or will be obligated to give notice of any defects or irregularities in
tenders, and none of them will incur any liability for failure to give any such
notice.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, a tender of Shares pursuant
to the Offer is irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time before the Expiration Date and, unless theretofore
accepted for payment by the Company, after 12:00 Midnight, New York City time,
on July 16, 1996.
For a withdrawal to be effective, the Depositary must timely receive (at
one of its addresses set forth on the back cover of this Offer to Purchase) a
written or facsimile transmission notice of withdrawal. Any notice of
withdrawal must specify the name of the person having tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and, if different from the name
of the person who tendered the Shares, the name of the registered owner of such
Shares. If the certificates have been delivered or otherwise identified to the
Depositary, then, prior to the release of such certificates, the tendering
stockholder must also submit the
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serial numbers shown on the particular certificates evidencing such Shares and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution (except in the case of Shares tendered by an Eligible Institution).
If Shares have been delivered pursuant to the procedure for book-entry transfer
set forth in Section 2, the notice of withdrawal must specify the name and the
number of the account at the applicable Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with the procedures of
such facility.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Company, in its sole discretion,
which determination shall be final and binding on all parties. None of the
Company, the Information Agent, the Depositary or any other person is or will
be obligated to give any notice of any defects or irregularities in any notice
of withdrawal, and none of them will incur any liability for failure to give any
such notice. A withdrawal of a tender of Shares may not be rescinded and Shares
properly withdrawn shall thereafter be deemed not to be validly tendered for
purposes of the Offer. Withdrawn Shares, however, may be retendered before the
Expiration Date by again following one of the procedures described in Section 2.
4. ACCEPTANCE FOR PAYMENT OF SHARES AND PAYMENT OF PURCHASE PRICE
Upon the terms and subject to the conditions of the Offer, as soon as
practicable after the Expiration Date, the Company will purchase and pay the
Purchase Price for 1,751,600 Shares (subject to increase or decrease as provided
in Sections 1 and 14) or such lesser number of Shares as are properly tendered
and not withdrawn as permitted in Section 3. For purposes of the Offer, the
Company will be deemed to have accepted for payment (and thereby purchased)
Shares which are tendered and not withdrawn when, as and if the Company gives
oral or written notice to the Depositary of the Company's acceptance of such
Shares for payment pursuant to the Offer.
Certificates for all Shares not purchased pursuant to the Offer will be
returned to the tendering stockholders (or, in the case of Shares delivered by
book-entry transfer, such Shares will be credited to the account maintained with
one of the Book-Entry Transfer Facilities by the participant therein who so
delivered such Shares) at the Company's expense as promptly as practicable.
Payment for Shares purchased pursuant to the Offer will be made by the
Company by depositing the Purchase Price therefor with the Depositary, which
will act as agent for tendering stockholders for the purpose of receiving
payment from the Company and transmitting payment to the tendering stockholders.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of certificates for such Shares (or a timely
confirmation by a Book-Entry Transfer Facility of book-entry transfer of such
Shares to the Depositary), a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) with any required signature guarantees and
any other required documents. Under no circumstance will interest be paid on
the Purchase Price of the Shares to be paid by the Company, regardless of any
delay in making such payment.
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The Company will pay any stock transfer taxes with respect to the transfer
and sale of Shares to it or its order pursuant to the Offer. If, however,
payment is to be made to, or certificates for Shares not purchased or tendered
are to be registered in the name of, any person other than the registered
holder, or if tendered certificates are registered in the name of any person
other than the person(s) signing the Letter of Transmittal, the amount of any
stock transfer taxes (whether imposed on the registered holder or such other
person) payable on account of the transfer to such person will be deducted from
the Purchase Price unless evidence satisfactory to the Company of the payment of
such taxes or an exemption therefrom is submitted. See Instruction 6 of the
Letter of Transmittal.
ANY TENDERING STOCKHOLDER OR OTHER PAYEE WHO FAILS TO COMPLETE FULLY AND
SIGN THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL (OR, IN THE
CASE OF A NONCORPORATE FOREIGN STOCKHOLDER, A FORM W-8, WHICH IS OBTAINABLE FROM
THE DEPOSITARY) MAY BE SUBJECT TO A FEDERAL BACKUP WITHHOLDING TAX OF 31% OF THE
GROSS PROCEEDS TO BE PAID TO SUCH STOCKHOLDER OR OTHER PAYEE PURSUANT TO THE
OFFER. SEE SECTIONS 2 AND 10.
5. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer, and in addition to (and
not in limitation of) the Company's right to extend, amend or terminate the
Offer at any time in its sole discretion, the Company shall not be required to
accept for payment or pay for any Shares tendered, and may extend, amend or
terminate the Offer if, before acceptance for payment of or payment for any
Shares, any of the following shall have occurred (or shall have been determined
by the Company to have occurred):
(a) there shall have been threatened, instituted or pending any
action or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal, domestic or foreign, or by
any person, domestic or foreign, before any court or governmental authority
or regulatory or administrative agency, domestic or foreign which
challenges the making of the Offer or the acquisition of Shares pursuant to
the Offer, or otherwise, directly or indirectly, relates in any manner to
or affecting the Offer; or
(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction proposed, sought, promulgated, enacted, entered, amended,
enforced or deemed to be applicable to the Offer or the Company, by any
court or any government or governmental, regulatory or administrative
authority, agency or tribunal, domestic or foreign, which, in the Company's
sole judgment, would or might directly or indirectly (i) make the
acceptance for payment of, or payment for, some or all the Shares illegal
or otherwise restrict or prohibit consummation of the Offer, or (ii) delay
or restrict the ability of the Company, or render the Company unable, to
accept for payment, or pay for, some or all of the Shares; or
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(c) HII or BUS shall have tendered any of their Shares; or
(d) there shall have been any material adverse change in the business,
condition (financial or other), assets, operations or prospects of the
Company;
which, in the reasonable good-faith judgment of the Company, in any such case
and regardless of the circumstances (including any action or inaction by the
Company) giving rise to such condition, makes it inadvisable to proceed with the
Offer or with such acceptance for payment or payment.
On May 8, 1996, an action was filed (Brickell Partners v. William E.
-------------------------------
Flaherty, et al., Civ. Action No. 14986) in the Delaware Court of Chancery by a
- -----------------
stockholder of the Company against the Company and certain members of its Board
of Directors (the "Action"). The Action alleges that the Offer is at an unfair
and inadequate price; that the Company's directors had breached their fiduciary
duties and that the Offer was wrongful, unfair and harmful to the Company's
public stockholders. The Action seeks to enjoin the Offer (however plaintiff
has not moved for any injunctive relief) or require its rescission; and
compensatory damages. The Company believes the Action to be without merit and
intends to vigorously defend this action. The Company does not currently intend
to terminate the Offer by reason of the Action.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition, and, except as set
forth in the next sentence, any such condition may be waived by the Company, in
whole or in part, at any time from time to time in its sole discretion. The
Exchange Act requires that all conditions to the Offer must be satisfied or
waived before the final Expiration Date. In certain cases, waiver of a
condition to the Offer would require an extension of the Offer. See Section 14.
The Company's failure at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right; the waiver of any such right
with respect to particular facts and circumstances shall not be deemed a waiver
with respect to any other facts or circumstances; and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
Any determination by the Company concerning the events described above and any
related judgment by the Company regarding the inadvisability of proceeding with
the acceptance for payment or payment for any tendered Shares will be final and
binding on all parties.
6. PRICE RANGE OF SHARES; DIVIDENDS
The Shares are traded on the NNM under the symbol "HHRD." The table below
sets forth, for the periods indicated, the high and low closing bid prices per
Share on the NNM and the dividends declared per Share.
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Per Share
High Low Dividend
---- --- ---------
FISCAL YEAR ENDED
December 31, 1993
First Quarter $7 3/4 $5 1/4 --
Second Quarter 5 3/4 4 --
Third Quarter 5 1/2 3 3/4 --
Fourth Quarter 4 1/2 2 3/4 $0.11
FISCAL YEAR ENDED
December 31, 1994
First Quarter 5 3/4 3 1/2 --
Second Quarter 4 1/2 2 1/2 --
Third Quarter 4 7/8 3 --
Fourth Quarter 6 1/8 4 --
FISCAL YEAR ENDED
December 31, 1995
First Quarter 7 1/4 4 1/2 --
Second Quarter 5 7/8 3 7/8 --
Third Quarter 7 1/4 3 5/8 --
Fourth Quarter 5 23/32 4 1/4 --
The Board of Directors expects that the Company's earnings, if any, will
generally be retained to invest in the operations of the business. On December
17, 1993, the Board declared a cash dividend of 11 cents per share which was
paid on January 3, 1994 to stockholders of record on December 28, 1993. The
Board has not adopted a policy of paying regular dividends. Any future
determination as to the payment of dividends will depend upon the Company's
financial condition, results of operations, capital requirements and such
other factors as the Board of Directors deems relevant. The Company's
revolving credit agreement restricts the Company's ability to pay dividends
under certain circumstances.
On May 6, 1996, the last reported sale before the announcement of the Offer
on the NNM was $4.125 per Share. On May 15, 1996, the last full trading day
before the commencement of the Offer, the closing bid price of the Shares on the
NNM was $6.00 per Share. Stockholders are urged to obtain a current market
quotation for the Shares.
7. BACKGROUND AND PURPOSE OF THE OFFER AND THE PURCHASE
The Offer is designed to enable stockholders of the Company to sell their
Shares without the usual transaction costs associated with market sales before
the Company is deregistered. However, proceeds of sales pursuant to the Offer
may be treated as a dividend taxable as ordinary income to a stockholder rather
than capital gain. See Section 10.
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Shares acquired by the Company pursuant to the Offer will be held in the
Company's treasury and will be available for the Company to issue without
further stockholder action (except as required by applicable law or the rules of
the NNM on which the Shares are traded).
The Company has been informed by its directors and executive officers that
they or members of their families intend to tender approximately 21,700 Shares
owned by them in their individual capacity pursuant to the Offer. HII has
informed the Company that none of the Shares beneficially owned by it will be
tendered to the Company pursuant to the Offer. BUS has declined to inform the
Company whether or not it will tender any of the Shares beneficially owned by
it. After giving effect to the repurchase of Shares by the Company pursuant to
the Offer (assuming 1,751,600 Shares are tendered by the public stockholders and
purchased pursuant to the Offer), HII and BUS will beneficially own
approximately 53% and 47% of the outstanding Shares, respectively.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is an environmental services company engaged in inorganic
hazardous waste resource recovery. The Company's primary business consists of
processing electric arc furnace dust ("EAF dust"), a listed hazardous waste
under the Resource Conservation and Recovery Act. The Company also processes
zinc-bearing wastes other than EAF dust, which include sludges from metal
platers and filtercakes from wastewater treatment.
The Company converts hazardous wastes into four useful products: zinc
calcine, crude zinc oxide, iron rich material ("IRM") and lead concentrate. The
Company accepts wastes for a fee charged to the generator and processes the
material utilizing high temperature metals recovery technologies. The Company
sells most of the recovered zinc to ZCA pursuant to long-term sales agreements,
and the balance to other zinc refineries around the world. The Company's IRM is
sold for a number of applications including as an aggregate for use in hot-mix
asphalt, as an iron additive in the manufacture of cement, as aggregate for
construction and road maintenance, and as a feedstock in the production of
steel. The Company's lead concentrate product is further processed into
additional products.
The Company's principal executive office is located at 110 East 59th
Street, New York, New York 10022, and its telephone number is (212) 527-3003.
Summary Historical Financial Information. The summary financial
information for the years ended December 31, 1995 and 1994 set forth below has
been derived from, and should be read in conjunction with, the audited financial
statements (including the related notes thereto) included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995 (the "Form 10-
K"), which is being provided to the Company's public stockholders simultaneously
with the delivery of this Offer to Purchase. The summary financial information
for the three month periods ended March 31, 1996 and 1995, has been derived
from, and should be read in conjunction with, the unaudited financial statements
for such periods included in the Company's Quarterly Report on Form 10-Q for the
period ended March 31, 1996 (the "Form
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<PAGE>
10-Q"). Such summary financial information is qualified in its entirety by
reference to such reports and all financial statements and related notes
contained therein. The Form 10-K and the Form 10-Q should be available for
examination, and copies should be obtainable, in the manner set forth below
under "Additional Information."
The financial information for the three month periods ended March 31, 1996
and 1995 has not been audited, and in the opinion of management reflects all
adjustments (consisting of normal recurring adjustments) which are necessary for
a fair presentation of such information. Results for the three month periods
are not necessarily indicative of results for the full year.
Horsehead Resource Development Company, Inc.
Summary Historical Financial Information
(Dollars In Thousands, Except Per Share And Ratio Amounts)
Quarter Ended Year Ended
March 31, December 31,
---------------- ----------------
1996 1995 1995 1994
---- ---- ---- ----
Income Statement:
Net sales . . . . . . . . . $24,938 $27,337 $101,500 $103,336
Operating profit . . . . . 3,962 6,921 26,120 23,716
Income before income
taxes . . . . . . . . . . 4,203 6,864 26,162 22,441
Income before extraordinary
items. . . . . . . . . . . 2,730 4,203 16,395 11,154
Net income . . . . . . . . 2,730 4,203 16,395 11,154
Balance Sheet (at end of
period):
Working capital . . . . . . 74,559 52,222 70,823 45,484
Total assets . . . . . . . 208,295 196,505 205,479 192,453
Total long-term
indebtedness . . . . . . 34,100 34,100 34,100 34,100
Shareholder's equity . . . 127,163 112,241 124,433 108,038
Per Share(a)
Net income per common share $0.08 $0.12 $0.45 $0.31
Net income per common share
(and common share
equivalents) . . . . . . $0.08 $0.12 $0.45 $0.31
Net income per share on a
fully diluted basis . . . $0.08 $0.12 $0.45 $0.31
Ratio of earnings to fixed
charges . . . . . . . . . 8.3x 13.6x 13.0x 15.1x
Book value per share . . . $3.51 $3.10 $3.43 $2.98
- --------------
(a) Average number of shares of common stock outstanding for all periods was
36,237,500.
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<PAGE>
Additional Information. The Company is subject to the informational
reporting requirements of the Exchange Act and in accordance therewith the
Company files reports, proxy statements and other information with the SEC
relating to its business, financial condition and other matters. The Company is
required to disclose in such proxy statements and reports certain information,
as of particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal owners of the
Company's securities and any material interest of such persons in transactions
with the Company. Additionally, information concerning the Company is set forth
in the Form 10-K. The Company has also filed a Transaction Statement on
Schedule 13E-3 and an Issuer Tender Offer Statement on Schedule 13E-4 with the
SEC which includes certain additional information relating to the Offer. The
reports, proxy statements and other information filed by the Company with the
SEC can be inspected and copied at the public reference facilities maintained by
the SEC at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and (except for the Schedule 13E-3 and Schedule 13E-4) at the regional
offices of the SEC at Seven World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago,
Illinois 60661. Copies of such material also can be obtained at prescribed
rates from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549.
9. SOURCE AND AMOUNT OF FUNDS
If the Company were to purchase 1,751,600 Shares pursuant to the Offer at a
Purchase Price of $5.75 per Share, the maximum aggregate cost of the Offer would
be $10,071,700, which would be paid from cash and cash equivalents of the
Company. The fees and expenses associated with the Offer are estimated by the
Company to be $655,000.
10. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary under currently applicable law of
certain federal income tax considerations generally applicable to the Offer.
The discussion set forth below is for general information only and the tax
treatment described herein may vary depending upon each stockholder's particular
circumstances and tax position. Certain stockholders (including insurance
companies, tax-exempt organizations, financial institutions or broker-dealers,
regulated investment companies, foreign corporations, persons who are not
citizens or residents of the United States, stockholders who do not hold their
Shares as capital assets, stockholders who hold their Shares as part of a
straddle hedging transaction or conversion transaction, and stockholders who
have acquired their Shares upon the exercise of options or otherwise as
compensation) may be subject to special rules not discussed below. No ruling
from the Internal Revenue Service ("IRS") will be applied for with respect to
the federal income tax consequences discussed herein and, accordingly, there can
be no assurance that the IRS will agree with the conclusions stated. The
discussion does not consider the effect of any applicable foreign, state, local
or other tax laws. EACH STOCKHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR
AS TO THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE OFFER, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY FOREIGN, STATE, LOCAL OR OTHER TAX LAWS, ANY
RECENT CHANGES IN APPLICABLE TAX LAWS AND ANY PROPOSED LEGISLATION.
24
<PAGE>
IN GENERAL. A stockholder's exchange of Shares for cash pursuant to the
Offer will be a taxable transaction for federal income tax purposes, and may
also be a taxable transaction under applicable state, local, foreign or other
tax laws. The federal income tax consequences to a stockholder may vary
depending upon the stockholder's particular facts and circumstances.
TREATMENT AS A SALE OR EXCHANGE. Under Section 302 of the Code, a transfer
of Shares to the Company pursuant to the Offer will, as a general rule, be
treated as a sale or exchange of the Shares if the receipt of cash upon the sale
(a) is "substantially disproportionate" with respect to the stockholder, (b)
results in a "complete redemption" of the stockholder's interest in the Company
or (c) is "not essentially equivalent to a dividend" with respect to the
stockholder. These tests (the "Section 302 tests") are explained more fully
below.
If any of the Section 302 tests is satisfied, a tendering stockholder will
recognize gain or loss equal to the difference between the amount of cash
received by the stockholder pursuant to the Offer (less any portion thereof
attributable to accrued but unpaid dividends which is taxable as a dividend) and
the stockholder's basis in the Shares sold pursuant to the Offer. If the Shares
are held as capital assets, the gain or loss will be capital gain or loss, which
will be long-term capital gain or loss if the Shares have been held for more
than one year.
TREATMENT AS A DIVIDEND. If none of the Section 302 tests is satisfied and
the Company has sufficient earnings and profits, a tendering stockholder will be
treated as having received a dividend taxable as ordinary income in an amount
equal to the entire amount of cash received by the stockholder pursuant to the
Offer. This amount will not be reduced by the stockholder's basis in the Shares
sold pursuant to the Offer, and (except as described below for corporate
stockholders eligible for the dividends-received deduction) the stockholder's
basis in those Shares will be added to the stockholder's basis in his or her
remaining Shares. No assurance can be given that any of the Section 302 tests
will be satisfied as to any particular stockholder, and thus no assurance can be
given that any particular stockholder will not be treated as having received a
dividend taxable as ordinary income.
CONSTRUCTIVE OWNERSHIP OF STOCK. In determining whether any of the Section
302 tests is satisfied, a stockholder must take into account not only stock of
the Company actually owned by the stockholder, but also stock of the Company
that is constructively owned within the meaning of Section 318 of the Code.
Under Section 318, a stockholder may constructively own stock of the Company
actually owned, and in some cases constructively owned, by certain related
individuals and certain entities in which the stockholder has an interest, as
well as any stock of the Company the stockholder has a right to acquire by
exercise of an option or by the conversion or exchange of a security.
THE SECTION 302 TESTS. One of the following tests must be satisfied in
order for the sale of Shares pursuant to the Offer to be treated as a sale or
exchange rather than as a dividend distribution.
(a) Substantially Disproportionate Test. The receipt of cash by a
stockholder will be substantially disproportionate with respect to the
stockholder if the percentage of
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<PAGE>
the outstanding voting stock of the Company actually and constructively
owned by the stockholder immediately following the sale of Shares pursuant
to the Offer (treating Shares purchased pursuant to the Offer as not
outstanding) is less than 80% of the percentage of the outstanding voting
stock of the Company actually and constructively owned by the stockholder
immediately before the exchange (treating Shares purchased pursuant to the
Offer as outstanding). Stockholders should consult their tax advisors
concerning the application of the substantially disproportionate test to
their particular circumstances.
(b) Complete Redemption Test. The receipt of cash by a stockholder
will be a complete redemption of the stockholder's interest if either (i)
all of the stock of the Company actually and constructively owned by the
stockholder is sold pursuant to the Offer or (ii) all of the stock of the
Company actually owned by the stockholder is sold pursuant to the Offer and
the stockholder is eligible to waive, and effectively waives, the
attribution of all stock of the Company constructively owned by the
stockholder in accordance with the procedures described in Section
302(c)(2) of the Code.
(c) Not Essentially Equivalent To A Dividend Test. The receipt of
cash by a stockholder will not be essentially equivalent to a dividend if
the stockholder's exchange of Shares pursuant to the Offer results in a
meaningful reduction of the stockholder's proportionate interest in the
Company. Whether the receipt of cash by a stockholder will not be
essentially equivalent to a dividend will depend on the stockholder's
particular facts and circumstances. However, in certain circumstances, in
the case of a small minority stockholder, even a small reduction may
satisfy this test. For example, the IRS has indicated in a published
ruling that in the case of a small minority stockholder of a publicly held
corporation who exercises no control over corporate affairs, a reduction in
the stockholder's proportionate interest in the corporation from .0001118%
to .0001081% (which represented only a 3.3% reduction in the stockholder's
percentage ownership of outstanding shares for purposes of the
substantially disproportionate test) would constitute a meaningful
reduction. Stockholders expecting to rely on the "not essentially
equivalent to a dividend test" should consult their own tax advisors
regarding its application in their particular circumstances.
Under certain circumstances, it may be possible for a tendering stockholder
to satisfy one of the Section 302 tests by contemporaneously selling or
otherwise disposing of all or some of the stock of the Company that is actually
or constructively owned by the stockholder but that is not purchased pursuant to
the Offer. Correspondingly, a stockholder may not be able to satisfy any of the
Section 302 tests because of contemporaneous acquisitions of stock of the
Company by the stockholder or by a related party whose stock is constructively
owned by the stockholder. Stockholders should consult their tax advisors
regarding the consequences of such sales or acquisitions in their particular
circumstances.
SPECIAL RULES FOR CORPORATE STOCKHOLDERS. If the exchange of Shares by a
corporate stockholder does not satisfy any of the Section 302 tests and is
therefore treated as a dividend, the stockholder may be entitled to a dividends-
received deduction equal to 70% of
26
<PAGE>
the dividend. There are a number of limitations on the availability of the
deduction, however, and the dividends-received deduction may not be available or
could be limited if, for example, the Company does not satisfy certain holding
period requirements with respect to the Shares or the Shares are treated as
"debt financed portfolio stock." Finally, it is expected that if a dividends-
received deduction is available, the dividend will generally constitute an
extraordinary dividend under Section 1059 of the Code. As a result, a corporate
stockholder will be required to reduce its tax basis in its Shares (but not
below zero) by the non-taxed portion of the dividend (that is, the portion of
the dividend equal to the dividends-received deduction). If the non-taxed
portion of the dividend exceeds the corporate stockholder's tax basis in its
Shares, the excess must be treated as gain from the sale of the Shares for the
taxable year in which a sale or disposition of the Shares occurs.
BACKUP WITHHOLDING. See Section 3 concerning the potential application of
federal backup withholding.
11. TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES
Based upon the Company's records and upon information provided to the
Company by its directors, executive officers and affiliates, neither the Company
nor, to the best of the Company's knowledge, any of the directors or executive
officers of the Company, any person controlling the Company, nor any associate
of any of the foregoing, has effected any transactions in the Shares during the
60 days prior to the date hereof.
Except as set forth in this Offer to Purchase, neither the Company nor, to
the best of the Company's knowledge, any of its affiliates, directors or
executive officers or any person controlling the Company, is a party to any
contract, arrangement, understanding or relationship with any other person
relating, directly or indirectly, to, or in connection with, the Offer with
respect to any securities of the Company (including, but not limited to, any
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any such securities, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss or the giving or
withholding of proxies, consents or authorizations). Except as set forth in
this Offer to Purchase, since the commencement of the Company's second full
fiscal year preceding the date of this Offer to Purchase, no contacts or
negotiation concerning a merger, consolidation, or acquisition, a tender offer
for or other acquisition of any securities of the Company, an election of
directors of the Company, or a sale or other transfer of a material amount of
assets of the Company, has been entered into or occurred between any affiliates
of the Company or between the Company or any of its affiliates and any
unaffiliated person.
The Company has been informed by its directors and executive officers that
they currently intend to tender Shares owned by them pursuant to the Offer.
27
<PAGE>
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS; NO APPRAISAL RIGHTS
The Company is not aware of any license or regulatory permit that appears
to be material to its business that might be adversely affected by its
acquisition of Shares as contemplated in the Offer or of any approval or other
action by any government or governmental, administrative or regulatory authority
or agency, domestic or foreign, that would be required for the Company's
acquisition or ownership of Shares pursuant to the Offer. Should any such
approval or other action be required, the Company currently contemplates that it
will seek such approval or other action. The Company cannot predict whether it
may determine that it is required to delay the acceptance for payment of Shares
tendered pursuant to the Offer pending the outcome of any such matter. There
can be no assurance that any such approval or other action, if needed, would be
obtained or would be obtained without substantial conditions or that the failure
to obtain any such approval or other action might not result in adverse
consequences to the Company's business. The Company intends to make all
required filings under the Exchange Act. The Company's obligation under the
Offer to accept Shares for payment is subject to certain conditions. See
Section 5. No appraisal rights are available to holders of the Shares in
connection with the Offer.
13. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT
The Company's purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and will reduce the number
of stockholders.
The trading of the Shares is currently reported on the NNM. Following the
Offer, the Company intends to delist the Shares from the NNM and deregister
under the Exchange Act. As of March 11,1996, there were 1,751,600 Shares
publicly held and 190 shareholders of record of the outstanding Shares. Due to
the foregoing number of record holders, the Shares no longer meet the
requirements for continued quotation on the NNM. Pursuant to the NNM's
published guidelines, shares of common stock are not eligible to be included for
listing if, among other things, the number of shares publicly held falls below
200,000, the number of holders of shares falls below 400 or the aggregate market
value of such publicly held shares does not exceed $1,000,000. If these
standards are not met, quotations might continue to be published in the NASDAQ
SmallCap Market, Inc., but if the number of holders of the shares falls below
300, or if the number of publicly held shares falls below 100,000, or there is
not at least one market maker for the shares, NASD rules provide that the
securities would no longer be "authorized" for NASDAQ reporting and NASDAQ would
cease to provide any quotations. Shares held directly or indirectly by an
officer or director of the issuer or by any beneficial owner of more than 10% of
the shares of the issuer will ordinarily not be considered as being publicly
held for this purpose. In the event the Shares were no longer quoted on NASDAQ,
quotations might still be available from other sources. The extent of the
public market for the Shares and availability of such quotations would, however,
depend upon the number of holders of Shares remaining at such time, the interest
in maintaining a market in the Shares on the part of securities firms, the
termination of registration under the Exchange Act as described below and other
factors.
28
<PAGE>
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. Among other things, this has the effect of allowing brokers to
extend credit on the collateral of such Shares. Depending upon factors similar
to those described above regarding listing and market quotations, it is likely
that, following the purchase of the Shares pursuant to the Offer the Shares will
no longer constitute "margin securities" for purposes of the Federal Reserve
Board's margin regulations. In such event, Shares could no longer be used as
collateral for margin loans made by brokers.
The Shares are currently registered under the Exchange Act which requires,
among other things, that the Company furnish certain information to its
stockholders and to the SEC and comply with the SEC's proxy rules in connection
with meetings of the Company's stockholders. Registration of the Shares under
the Exchange Act is planned to be terminated upon application by the Company to
the SEC promptly following the termination of the Offer.
The termination of the registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its stockholders and to the SEC and would render inapplicable certain
provisions of the Exchange Act, including requirements that the Company file
periodic reports (including financial statements), the requirements of Rule 13e-
3 under the Exchange Act with respect to "going private" transactions,
requirements that the Company's officers, directors and ten-percent shareholders
file certain reports concerning ownership of the Company's equity securities and
provisions that any profit by such officers, directors and shareholders through
purchases and sales of the Company's equity securities within any six-month
period may be recaptured by the Company. In addition, the ability of
"affiliates" of the Company and other persons to dispose of Shares which are
"restricted securities" under Rule 144 under the Securities Act of 1933, as
amended, may be impaired or eliminated. If registration of the Shares under the
Exchange Act were terminated, the Shares would no longer be "margin securities"
or eligible for NNM reporting.
Following the Offer and deregistration of the Shares under the Exchange
Act, the Company may take certain action to eliminate any interests in the
Shares held by remaining minority public stockholders of the Company including,
but not limited to, merging out any remaining minority public stockholders of
the Company on such terms and conditions as the Company may determine.
29
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14. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENTS
The Company expressly reserves the right, in its sole discretion, at any
time or from time to time and regardless of whether or not any of the events set
forth in Section 5 shall have occurred or shall be deemed by the Company to have
occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of any Shares by giving oral or written
notice of such extension to the Depositary and making a public announcement
thereof. During any such extension, all Shares previously tendered and not
purchased or withdrawn will remain subject to the Offer, except to the extent
that such Shares may be withdrawn as set forth in Section 3. The Company also
expressly reserves the right, in its sole discretion, to terminate the Offer and
not accept for payment or pay for any Shares not theretofore accepted for
payment or paid for or, subject to applicable law, to postpone payment for
Shares upon the occurrence of any of the conditions specified in Section 6 or
otherwise by giving oral or written notice of such termination or postponement
to the Depositary and making a public announcement thereof. The Company's
reservation of the right to delay payment for Shares which it has accepted for
payment is limited by Rule 13e-4(f)(5) promulgated under the Exchange Act, which
requires that the Company must pay the consideration offered or return the
Shares tendered promptly after termination or withdrawal of a tender offer.
Subject to compliance with applicable law, the Company further reserves the
right, in its sole discretion, and regardless of whether or not any of the
events set forth in Section 6 shall have occurred or shall be deemed by the
Company to have occurred, to amend the Offer in any respect (including, without
limitation, by decreasing or increasing the consideration offered in the Offer
to owners of Shares or by decreasing the number of Shares being sought in the
Offer) or to waive the limitation on the maximum number of shares to be
purchased pursuant to the Offer. Amendments to the Offer may be made at any
time or from time to time effected by public announcement thereof, such
announcement, in the case of an extension, to be issued no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date. Any disclosure of a material change in the information
published, sent or given to stockholders will be disseminated promptly to
stockholders in a manner reasonably designed to inform stockholders of such
change. Without limiting the manner in which the Company may choose to make a
public announcement pursuant to or concerning the Offer, except as required by
applicable law, the Company shall have no obligation to publish, advertise or
otherwise communicate any such public announcement other than by making a
release to the Dow Jones News Service.
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Company will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(2) promulgated
under the Exchange Act. The minimum period during which an offer must remain
open following material changes in the terms of the offer or information
concerning the offer (other than a change in price or a change in percentage of
securities sought) will depend on the facts and circumstances then existing,
including the relative materiality of the changed terms or information. If (a)
the Company (i) increases or decreases the price at which Shares may be properly
tendered or (ii) decreases the number of Shares being sought, and (b) the Offer
is scheduled to expire at any time earlier than the expiration of a period
ending on the tenth
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business day from and including the date that notice of such increase or
decrease is first published, sent or given, the Offer will be extended until the
expiration of such ten-business-day period.
15. FEES AND EXPENSES
The Company has retained Bear Stearns as its financial advisor in
connection with the Offer. Bear Stearns will receive a fee of $400,000 for its
services as financial advisor. The Company will also reimburse Bear Stearns for
its reasonable out-of-pocket expenses relating to the Offer. The Company has
agreed to indemnify Bear Stearns against certain liabilities in connection with
the Offer, including certain liabilities under the federal securities laws. The
Company paid to Bear Stearns a fee of $125,000 for its services as financial
advisor with respect to the Prior Proposal.
The Company has retained Morrow & Co., Inc. as Information Agent and
Chemical Mellon Shareholder Services, L.L.C. as Depositary in connection with
the Offer. The Information Agent and the Depositary will each receive
reasonable and customary compensation for customary services in connection with
the Offer and will be reimbursed for customary and reasonable out-of-pocket
expenses. The Company has agreed to indemnify the Information Agent and the
Depositary against certain liabilities in connection with the Offer, including
certain liabilities under the federal securities laws. Neither the Information
Agent nor the Depositary has been retained to, or is authorized to, make
solicitations or recommendations in connection with the Offer.
The Company will not pay any fees or commissions to any broker, dealer,
commercial bank, trust company or other person for soliciting Shares pursuant to
the Offer. The Company will, however, on request, reimburse such persons for
customary handling and mailing expenses incurred in forwarding materials in
respect of the Offer to the beneficial owners for which they act as nominees.
No broker, dealer, commercial bank or trust company has been authorized to act
as an agent for the Company for the purpose of the Offer. The Company will not
pay (or cause to be paid) any stock transfer taxes on its purchase of Shares
pursuant to the Offer, except as otherwise provided in Instruction 6 of the
Letter of Transmittal.
Estimated costs and fees in connection with the Offer, all of which
are the obligation of the Company, are as follows:
Solicitation fees and expenses . . . . . $ 25,000
Financial advisory fees . . . . . . . . . 400,000
Filing fees . . . . . . . . . . . . . . . 2,000
Legal, accounting, and other professional 200,000
fees . . . . . . . . . . . . . . . . . .
Printing and distribution costs . . . . . 20,000
Miscellaneous . . . . . . . . . . . . . . 8,000
--------
Total . . . . . . . . . . . . . $ 655,000
=======
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The above amounts are estimates only and actual expenditures may vary
substantially from the estimates depending on the circumstances.
16. MISCELLANEOUS
The Offer is not being made to, nor will the Company accept tenders from or
on behalf of, holders of Shares in any jurisdiction in which the making of the
Offer or its acceptance would not be in compliance with the laws of such
jurisdiction. The Company is not aware of any jurisdiction where the making of
the Offer or the tender of Shares would not be in compliance with applicable
law. If the Company becomes aware of any jurisdiction where the making of the
Offer or the tender of Shares is not in compliance with any applicable law, the
Company will make a good faith effort to comply with such law. If, after such
good-faith effort, the Company cannot comply with such law, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares residing in such jurisdiction. In any jurisdiction in which the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer will be deemed to be made on the Company's behalf by
one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
HORSEHEAD RESOURCE DEVELOPMENT
COMPANY, INC.
May 16, 1996
32
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the name, age, business address and
current and past principal occupation or employment of the directors and
executive officers of the Company. Unless otherwise indicated, each
individual listed below is a citizen of the United States.
<TABLE><CAPTION>
Name and Age Business Address Employment
------------ ---------------- ----------
<S> <C> <C>
William E. Flaherty, Horsehead Resource Chairman of the Board of the
63 Development Company, Company since its inception in
Chairman of the Board Inc. 1986. Chairman of the Board and
110 East 59th Street Chief Executive Officer of HII
New York, NY 10022 since 1989. President and Chief
Executive Officer of HII from
1981 to 1989.
David O. Carpenter, 58 ITTG, LLP Director since 1986. President
Director 329 Riverside Avenue and Chief Executive Officer of
Westport, CT 06880 the Company from its inception
in 1986 until February 1990.
President of HII from 1989 to
1994. Vice President of HII
from 1981 to 1983; Senior Vice
President from 1983 to 1987;
Executive Vice President from
1987 to 1989. Director of HII.
James H. Dowling, 64 Burson-Marsteller Chairman Emeritus and consultant
Director 601 Brickell Key Drive to Burson-Marsteller since 1994.
Suite 900 Chairman of the Board of Burson-
Miami, FL 33131 Marsteller from 1992 to 1994,
Chief Executive Officer of
Burson-Marsteller from 1988 to
1992.
David N. Judelson, 67 375 Park Avenue Director since 1986. Vice
Director Suite 2507 Chairman of HII since 1989. Co-
New York, NY 10152 founder of Gulf & Western
Industries, Inc. in 1956 and
member of its Board of Directors
from 1959 to 1983; President and
Chief Operating Officer from
1967 through 1983. Director of
HII.
Rolf Kola, 54* B.U.S Berzelius Umwelt- Member of the Executive Board of
Director Service AG B.U.S Berzelius Umwelt-Service
Dag-Hamarskjold - Weg 3 AG since 1990; Managing Director
D-65760 Eschborn, Germany of "Berzelius" Metallhutten GmbH
from 1989 to 1991.
</TABLE>
<PAGE>
<TABLE><CAPTION>
Name and Age Business Address Employment
------------ ---------------- ----------
<S> <C> <C>
Gunter Okon, 52* B.U.S Berzelius Umwelt- Member of the Executive Board of
Director Service AG B.U.S Berzelius Umwelt-Umwelt-
Dag-Hamarskjold - Weg 3 Service AG since 1994; Managing
D-65760 Eschborn, Germany Director of Sachtelben Chernie
GmbH from 1991 to 1994.
Tinkham Veale II, 81 1700 Epping Road Director since 1986, Chairman of
Director Gates Mills, OH 44040 the Board of HII from 1981 to
1989 and Chairman Emeritus since
1989. Founder of Alco Standard
Corporation, Chairman of the
Board until 1986 and Chairman
Emeritus since 1986. Director
of HII.
Mark G. Solow, 47 GarMark Advisors, LLC Director since 1995. Founder of
Director 1285 Avenue of the and Partner in GarMark Advisors
Americas L.L.C. since 1995. Senior
New York, New York 10019 Executive Vice President in
charge of the Banking and
Corporate Finance Group of
Chemical Banking Corporation
from 1992 through 1994. Co-head
of Manufacturers Hanover Trust
Global Banking Group, 1990-1991.
William M. Quirk, 39 Horsehead Resource President and Chief Executive
President and Chief Development Company, Officer of the Company since
Executive Officer Inc. 1994. President of the Company
110 East 59th Street since 1993. Senior Vice
New York, NY 10022 President of HII from 1988 to
1991 and since 1992.
Independent Consultant from 1991
to 1992. Vice President of HII
from 1987 to 1988.
William A. Smelas, 58 Horsehead Resource Executive Vice President of the
Executive Vice Development Company, Company since 1989 and Senior
President Inc. Vice President, Operations from
110 East 59th Street 1986 to 1989. Executive Vice
New York, NY 10022 President of ZCA since 1994.
Peter W. Nelson, 36 Horsehead Resource Senior Vice President of the
Senior Vice President Development Company, Company since 1993. Vice
Inc. President of HII since 1989.
110 East 59th Street Manager of Business Development
New York, NY 10022 of HII from 1987 to 1989.
2
<PAGE>
</TABLE>
<TABLE><CAPTION>
Name and Age Business Address Employment
------------ ---------------- ----------
<S> <C> <C>
Robert P. Marshall, 55 Horsehead Resource Vice President, General Counsel
Vice President, Development Company, and Secretary of the Company
General Counsel & Inc. since 1994. Vice President and
Secretary 110 East 59th Street General Counsel of HII since
New York, NY 10022 1994. Vice President and
Environmental Counsel of HII
from 1992 to 1994. Vice
President, General Counsel and
Secretary of the Company from
1986 to 1992.
Richard Krablin, 51 Horsehead Resource Vice President, Environmental of
Vice President, Development Company, the Company since 1995.
Environmental Inc. Consultant with Environmental
110 East 59th Street Management, Science and
New York, NY 10022 Strategic Services, Los Angeles,
CA, 1995. Various positions
with Atlantic Richfield Company,
Los Angeles, CA, 1979-1994.
</TABLE>
______________________
*Denotes a citizen of Germany, to the knowledge of the Company.
3
<PAGE>
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF HII
The following table sets forth the name, age, business address and
current and past principal occupation or employment of the directors and
executive officers of HII. Unless otherwise indicated, each individual listed
below is a citizen of the United States.
Name and Age Business Address Employment
------------ ---------------- ----------
William E. Flaherty, 63 Horsehead Chairman of the Board and
Chairman and Industries, Inc. Chief Executive Officer
Chief Executive Officer 110 East 59th of HII since 1989.
Street President and Chief
New York, NY 10022 Executive Officer of HII
from 1981 to 1989.
Chairman of the Board of
the Company since its
inception in 1986.
David O. Carpenter, 58 ITTG, LLP Director of HII.
Director 329 Riverside President of HII from
Avenue 1989 to 1994. Vice
Westport, CT President of HII from
06880 1981 to 1983; Senior Vice
President from 1983 to
1987; Executive Vice
President from 1987 to
1989. Director of the
Company since 1986.
President and Chief
Executive Officer of the
Company from its
inception in 1986 until
February 1990.
David N. Judelson, 67 375 Park Avenue Director of HII. Vice
Director Suite 2507 Chairman of HII since
New York, NY 1989. Co-founder of Gulf
10152 & Western Industries,
Inc. in 1956 and member
of its Board of Directors
from 1959 to 1983;
President and Chief
Operating Officer from
1967 through 1983.
Director of the Company
since 1986.
Tinkham Veale II, 81 1700 Epping Road Director of HII.
Director Gates Mills, OH Chairman of the Board of
44040 HII from 1981 to 1989 and
Chairman Emeritus since
1989. Founder of Alco
Standard Corporation,
Chairman of the Board
until 1986 and Chairman
Emeritus since 1986.
Director of the Company
since 1986.
William M. Quirk, 39 Horsehead Senior Vice President of
Senior Vice President Industries, Inc. HII. Senior Vice
110 East 59th President of HII from
Street 1988 to 1991 and since
New York, NY 10022 1992. Vice President of
HII from 1987 to 1988.
President and Chief
Executive Officer of the
Company since 1994.
President of the Company
since 1993. Independent
Consultant from 1991 to
1992.
<PAGE>
Name and Age Business Address Employment
------------ ---------------- ----------
Peter W. Nelson, 36 Horsehead Vice President of HII
Vice President Industries, Inc. since 1989. Manager of
110 East 59th Business Development of
Street HII from 1987 to 1989.
New York, NY 10022 Senior Vice President of
the Company since 1993.
Robert P. Marshall, 55 Horsehead Vice President and
Vice President and Industries, Inc. General Counsel of HII
General Counsel 110 East 59th since 1994. Vice
Street P r e s i d e n t a n d
New York, NY 10022 Environmental Counsel of
HII from 1992 to 1994.
Vice President, General
Counsel and Secretary of
the Company since 1994
and from 1986 to 1992.
Ronald J. Statile, 48 Horsehead Vice President of HII
Vice President Industries, Inc. since 1988.
110 East 59th
Street
New York, NY 10022
Neil R. Kurlander, 36 Horsehead Vice President and
Vice President and Industries, Inc. Assistant General Counsel
Assistant General 110 East 59th of HII since 1995. Vice
Counsel Street President and Corporate
New York, NY Counsel of HII from 1992
10022 to 1995. Corporate
Counsel of HII from 1990
to 1992.
2
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the Company or such stockholder's broker, dealer, commercial bank, trust
company or other nominee to the Depositary at one of its addresses set forth
below.
The Depositary for the Offer is:
Chemical Mellon Shareholder Services, L.L.C.
By Mail: By
Hand/Overnight Delivery:
P.O. Box 817 120 Broadway
Midtown Station 13th Floor
New York, NY 10018 NewYork,NY10271
By Facsimile Transmission:
(201) 296-4291 or 4293
Confirm by Telephone:
(201) 296-4983
______________________________________________________
Any questions or requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Information Agent at its address and the telephone numbers
set forth below. Stockholders may also contact their broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Offer. To
confirm delivery of your Shares, stockholders are directed to contact the
Depositary.
The Information Agent for the Offer is:
Morrow & Co., Inc.
909 Third Avenue
New York, New York 10022
(212) 754-8000 (Call Collect)
or
1-800-662-5200 (Toll Free)
EXHIBIT (D)(2)
LETTER OF TRANSMITTAL
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK OF
HORSEHEAD RESOURCE DEVELOPMENT COMPANY, INC.
Pursuant to the Offer to Purchase
Dated May 16, 1996
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, JUNE 14, 1996,
UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
Chemical Mellon Shareholder Services, L.L.C.
By Mail: By Hand/Overnight Delivery:
P.O. Box 817 120 Broadway, 13th Floor
Midtown Station New York, NY 10271
New York, NY 10018
By Facsimile Transmission:
(201) 296-4291 or 4293
Confirm by Telephone:
(201) 296-4983
______________________________
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE OR
TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
This Letter of Transmittal is to be used only if (a) certificates for
Shares (as defined below) are to be delivered with it or (b) Shares are being
delivered by book-entry transfer to the account maintained by the Depositary at
The Depository Trust Company ("DTC") or the Philadelphia Depository Trust
Company ("PDTC") (collectively, the "Book-Entry Transfer Facilities") as set
forth in Section 2 of the Offer to Purchase (as defined below).
Stockholders whose stock certificates are not immediately available (or who
cannot follow the procedure for book-entry transfer on a timely basis) or who
cannot transmit this Letter of Transmittal and all other required documents to
the Depositary before the Expiration Date (as defined in Section 1 of the Offer
to Purchase) may nevertheless tender their Shares according to the guaranteed
delivery procedure set forth in Section 2 of the Offer to Purchase. See
Instruction 2.
Delivery of this Letter of Transmittal and the other required documents to
one of the Book-Entry Transfer Facilities does not constitute delivery to the
Depositary.
<PAGE>
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY AT ONE OF THE BOOK-ENTRY
FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
----------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Transaction Code
Number: Number:
----------------------- ------------------------------------
[ ] CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Tendering Stockholder(s):
------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
---------------------
Name of Institution which Guaranteed Delivery:
--------------------------
Check Box of Applicable Book-Entry Transfer Facility and Give Account
Number if Delivered by Book-Entry Transfer:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account Transaction Code
Number: Number:
----------------------- ------------------------------------
2
<PAGE>
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
NAMES(S) AND ADDRESSES(ES) OF
REGISTERED HOLDER(S) (PLEASE
FILL IN EXACTLY AS NAME(S) SHARES TENDERED
APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
NUMBER OF
SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
TOTAL SHARES:
* Need not be completed if Shares are delivered by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares
represented by any certificates delivered to the Depositary are being
tendered. See Instruction 4.
3
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Horsehead Resource Development Company,
Inc., a Delaware corporation (the "Company"), the above-described shares of
common stock, par value $.01 per share ("Shares"), of the Company , at a price
of $5.75 per Share (the "Purchase Price"), net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated May
16, 1996 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and
in this Letter of Transmittal dated May 16, 1996 (which together constitute the
"Offer").
Subject to and effective upon acceptance for payment of the Shares tendered
herewith in accordance with the terms of the Offer (including, if the Offer is
extended or amended, the terms or conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers to or upon the
order of the Company all right, title and interest in and to all the Shares
tendered hereby, or orders the registration of such Shares delivered by book-
entry transfer, that are purchased pursuant to the Offer and hereby irrevocably
constitutes and appoints the depositary for the Offer (the "Depositary") the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to:
(a) deliver certificates for such Shares, or transfer ownership of
such Shares on the account books maintained by any of the Book-
Entry Transfer Facilities, together, in any such case, with all
accompanying evidence of transfer and authenticity, to or upon
the order of the Company, upon receipt by the Depositary, as the
undersigned's agent, of the Purchase Price with respect to such
Shares;
(b) present certificates for such Shares for cancellation and
transfer of such Shares on the Company's books; and
(c) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the
terms of the Offer.
The undersigned hereby represents and warrants that:
(a) The undersigned has full power and authority to validly tender,
sell, assign and transfer the Shares tendered hereby;
(b) when and to the extent the Company accepts the Shares for
purchase, the Company will acquire good, marketable and
unencumbered title thereto, free and clear of all security
interests, liens, charges, encumbrances, conditional sales
agreements or other obligations relating to their sale or
transfer, and not subject to any adverse claim;
(c) on request, the undersigned will execute and deliver any
additional documents the Depositary or the Company deems
necessary or desirable to complete the assignment, transfer and
purchase of the Shares tendered hereby; and
4
<PAGE>
(d) the undersigned has read and agrees to all the terms of the
Offer.
The undersigned understands that all Shares properly tendered and not
withdrawn will be purchased at $5.75 per Share (or such other price that may be
set forth in an amendment to the Offer), net to the seller in cash, upon the
terms and subject to the conditions of the Offer, and that the Company will
return all other Shares.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Company upon the terms and subject to the conditions of the Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Company may terminate or amend the Offer or may not
be required to accept for payment any of the Shares tendered herewith or may
accept for payment fewer than all the Shares tendered herewith.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned. Except as
stated in the Offer to Purchase, this tender is irrevocable.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price and/or return or issue the
certificates(s) evidencing any Shares not tendered or not accepted for payment
in the names(s) of the registered holders(s) appearing under "Description of
Shares Tendered." Similarly, unless otherwise indicated under "Special
Delivery Instructions", please mail the check for the Purchase Price and/or the
certificates(s) evidencing any Shares not tendered or not accepted for payment
(and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing under "Description of Shares Tendered." In the
event that both the "Special Delivery Instructions" and the "Special Payment
Instructions" are completed, please issue the check for the Purchase Price
and/or issue or return the certificate(s) evidencing any Shares not tendered or
accepted for payment in the name(s) of, and deliver said check and/or
certificate(s) to, the person or persons so indicated. In the case of book-
entry delivery of Shares, please credit the account maintained at the Book-Entry
Transfer Facility indicated above with any Shares not accepted for payment. The
undersigned recognizes that the Company has no obligation pursuant to the
"Special Payment Instructions" to transfer any Shares from the name(s) of the
registered holder(s) thereof if the Company does not accept for payment any of
the Shares so tendered.
5
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6 AND 8)
To be completed ONLY if the check for the Purchase Price
of Shares purchased and/or certificates for Shares not tendered
or not purchased are to be mailed to someone other than the
undersigned or to the undersigned at an address other than that
shown below the undersigned's signature.
Mail [ ] check and/or [ ] certificates to:
Name:
---------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
(Zip Code)
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6, 7 AND 8)
To be completed ONLY if the check for the Purchase Price of Shares
purchased and/or certificates for Shares not tendered or not purchased
are to be issued in the name of someone other than the undersigned.
Issue any [ ] check and/or [ ] certificates to:
Name:
----------------------------------------------------------
(PLEASE PRINT)
Address:
-------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
(Zip Code)
---------------------------------------------------------------
(TAXPAYER IDENTIFICATION NUMBER)
6
<PAGE>
SIGN HERE
(SEE INSTRUCTIONS 1 AND 5)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
---------------------------------------------------------------
---------------------------------------------------------------
SIGNATURE(S) OF OWNER(S)
Name(s)
--------------------------------------------------------
(PLEASE PRINT)
---------------------------------------------------------------
Capacity (full title)
-----------------------------------------
Address
-------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
--------------------------------
Taxpayer Identification Number
--------------------------------
(SEE INSTRUCTION 10)
Dated: , 1996
(Must be signed by registered holder(s) exactly as name(s)
appear(s) on stock certificates(s) or on a security position
listing or by person(s) authorized to become registered
holder(s) by certificates and documents transmitted herewith.
If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or
other person acting in a fiduciary or representative capacity,
please set forth full title. See Instruction 5.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
-------------------------------------------
Name
-----------------------------------------------------------
(PLEASE PRINT)
Title
---------------------------------------------------------
Name of Firm
---------------------------------------------------
Address
-------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone No.
-----------------------------------
Dated: , 1996
7
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most banks, savings and loan associations, and brokerage
houses) that is a participant in the Securities Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Program or the Stock
Exchange Medallion Program (each such entity being hereinafter referred to as an
"Eligible Institution"). Signatures on this Letter of Transmittal need not be
guaranteed if (a) this Letter of Transmittal is signed by the registered owner
of the Shares (which term, for purposes of this document, shall include any
participant in one of the Book-Entry Transfer Facilities whose name appears on a
security position listing as the owner of Shares) tendered herewith and such
owner has not completed either of the boxes entitled "Special Payment
Instructions" or "Special Delivery Instructions" on this Letter of Transmittal
or (b) such Shares are tendered for the account of an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be used only if (a) certificates
are to be forwarded with it to the Depositary or (b) delivery of Shares is to be
made by book-entry transfer pursuant to the procedure set forth in Section 2 of
the Offer to Purchase. Certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer of all Shares delivered electronically
into the Depositary's account at one of the Book-Entry Transfer Facilities,
together in each case with a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof), with any required signature guarantees,
and any other documents required by this Letter of Transmittal, must be received
by the Depositary at one of its addresses set forth on the front page of this
Letter of Transmittal before the Expiration Date (as defined in Section 1 of the
Offer to Purchase). Delivery of documents to one of the Book-Entry Transfer
Facilities does not constitute delivery to the Depositary.
Stockholders whose certificates are not immediately available (or who
cannot follow the procedures for book-entry transfer on a timely basis) or who
cannot transmit this Letter of Transmittal and all other required documents to
reach the Depositary before the Expiration Date, may nevertheless tender their
Shares pursuant to the guaranteed delivery procedure set forth in Section 2 of
the Offer to Purchase. Pursuant to such procedure: (a) such tender must be
made by or through an Eligible Institution, (b) the Depositary must receive (by
hand, mail or facsimile transmission), before the Expiration Date, a properly
completed and duly executed Notice of Guaranteed Delivery substantially in the
form the Company has provided with the Offer to Purchase and (c) the
certificates for all tendered Shares in proper form for transfer (or
confirmation of a book-entry transfer of all such Shares into the Depositary's
account at one of the Book-Entry Transfer Facilities), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) and any
other documents required by this Letter of Transmittal, must be received by the
Depositary within three (3) Nasdaq National Market trading days after the date
of execution of such Notice of Guaranteed Delivery, all as provided in Section 2
of the Offer to Purchase.
The method of delivery of all documents, including stock certificates, this
Letter of Transmittal and any other required documents, is at the election and
risk of the tendering stockholder. If delivery is by mail, registered mail with
return receipt requested, properly insured, is recommended.
8
<PAGE>
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal
(or a facsimile thereof), each tendering stockholder waives any right to receive
any notice of the acceptance of such stockholder's tender.
3. INADEQUATE SPACE. If the space provided in the box entitled
"Description of Shares Tendered" is inadequate, the certificate numbers and/or
the number of Shares should be listed on a separate signed schedule and attached
to this Letter of Transmittal.
4. PARTIAL TENDERS AND UNPURCHASED SHARES. (Not applicable to
stockholders who deliver Shares by book-entry transfer.) If fewer than all the
Shares evidenced by any certificate delivered to the Depositary are to be
tendered, fill in the number of Shares that are to be tendered in the box
entitled "Number of Shares Tendered." If such Shares are purchased, a new
certificate for the remainder of the Shares evidenced by the old certificate(s)
will be sent to and in the name of the registered holders(s) (unless otherwise
specified by such holders(s) having completed either of the boxes entitled
"Special Delivery Instructions" or "Special Payment Instructions" in this Letter
of Transmittal) as soon as practicable following the expiration or termination
of the Offer. All Shares represented by the certificate(s) listed and delivered
to the Depositary will be deemed to have been tendered unless otherwise
indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS; ENDORSEMENTS.
(a) If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered herewith, the signature(s) must correspond exactly with the
name(s) and written on the face of the certificates without any change
whatsoever.
(b) If any of the Shares tendered herewith are registered in the names of
two or more joint owners, each such owner must sign this Letter of Transmittal.
(c) If any of the Shares tendered herewith are registered in different
names on different certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal as there are different
registrations of certificates.
(d) If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered herewith, no endorsements of certificates or separate stock
powers are required unless payment is to be made and/or certificates for Shares
not tendered or not purchased are to be issued to a person other than the
registered holder(s). If this Letter of Transmittal is signed by a person other
than the registered holder(s) of the Shares tendered herewith, however, the
certificates must be endorsed or accompanied by appropriate stock powers, in
either case, signed exactly as the name(s) of the registered holder(s) appear on
the certificates for such Shares. Signatures on any such certificates or stock
powers must be guaranteed by an Eligible Institution. See Instruction 1.
(e) If this Letter of Transmittal is, or any certificates or stock powers
are, signed by a trustee, executor, administrator, guardian, attorney-in-fact,
agent, officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing and proper
evidence satisfactory to the Company of the authority of such person so to act
must be submitted.
6. STOCK TRANSFER TAXES. The Company will pay any stock transfer taxes
with respect to the transfer and sale of Shares to it or its order pursuant to
the Offer. If, however, payment of the Purchase Price is to be made to, or
certificates for Shares not tendered or accepted for purchase are to be
registered
9
<PAGE>
in the name of, any person other than the registered holder, or if tendered
certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder or such person) payable on account of
the transfer to such person will be deducted from the Purchase Price unless
evidence satisfactory to the Company of the payment of such taxes or an
exemption therefrom is submitted.
7. IRREGULARITIES. All questions as to the number of Shares to be
accepted and the validity, form, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares will be determined by the
Company, in its sole discretion, which determination shall be final and binding
on all parties. The Company reserves the absolute right to reject any or all
tenders determined by it not to be in proper form or the acceptance for payment
of which may, in the opinion of the Company's counsel, be unlawful. The Company
also reserves the absolute right to waive any of the conditions of the Offer
(except as provided in Section 5 of the Offer to Purchase) and any defect or
irregularity in the tender of any particular Shares. The Company's
interpretation of the terms and conditions of the Offer (including these
instructions) shall be final and binding on all parties. No tender of Shares
will be deemed properly made until all defects or irregularities have been cured
or waived. None of the Company, the Depositary, the Information Agent or any
other person is or will be obligated to give notice of any defects or
irregularities in tenders, and none of them will incur any liability for failure
to give any such notice.
8. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If the check for the
Purchase Price of any Shares purchased is to be issued to, or any Shares not
tendered or not purchased are to be returned in the name of, a person other than
the person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that shown
in the box entitled "Descriptions of Shares Tendered," the boxes entitled
"Special Payment Instructions" and/or "Special Delivery Instructions" on this
Letter of Transmittal should be completed.
9. REQUEST FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to the Information Agent at one of its addresses and telephone
numbers set forth below and requests for additional copies of the Offer to
Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent.
10. SUBSTITUTE FORM W-9. Except as provided above under "Important Tax
Information," each tendering stockholder is required to provide the Depositary
with a correct taxpayer identification number, i.e., social security number or
employer identification number ("TIN"), on Substitute Form W-9 which is provided
under "Important Tax Information" below. Failure to provide the information on
the form may subject the tendering stockholder to a penalty and 31% federal
backup withholding tax imposed on the gross proceeds to be paid to such
stockholder or other payee with respect to Shares purchased pursuant to the
Offer.
11. FOREIGN STOCKHOLDER WITHHOLDING. Foreign stockholders should note
that the 31% U.S. withholding tax generally applicable to corporate
distributions will apply to the proceeds payable pursuant to the Offer, unless
either a reduced rate of withholding is applicable pursuant to a tax treaty or
an exemption from withholding is applicable because such gross proceeds are
effectively connected with the conduct of a trade or business by the foreign
stockholder within the United States.
Facsimile copies of this Letter of Transmittal, properly completed and duly
executed, will be accepted. This Letter of Transmittal, certificates for Shares
and any other required documents should be sent
10
<PAGE>
or delivered by each stockholder of the Company or such stockholder's broker,
dealer, commercial bank, trust company or other nominee to the Depositary at one
of its addresses set forth above.
IMPORTANT TAX INFORMATION
Under current U.S. federal income tax law, a stockholder whose tendered
Shares are accepted for payment is required by law to provide the Depositary
with such stockholder's correct TIN on the Substitute Form W-9 below. If the
Depositary is not provided with the correct TIN, the Internal Revenue Service
may subject the stockholder or other payee to a penalty. In addition, payments
that are made to such stockholders or other payee with respect to Shares
purchased pursuant to the Offer may be subject to 31% backup withholding for
federal income tax purposes.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements and should indicate their status by writing "exempt" across the
face of, and by signing and dating, the Substitute Form W-9. In order for a
non-corporate foreign stockholder to qualify as an exempt recipient, such
stockholder must submit a Form W-8, Certificate of Foreign Status, signed under
penalties of perjury, attesting to that stockholder's exempt status. A Form W-8
can be obtained from the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for more
instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of such payments to be made to the stockholder or other payee. Backup
withholding is not an additional tax. Rather, the federal income tax liability
of persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding in connection with
payments that are made with respect to Shares tendered in the Offer, you must
provide the Depositary with your correct TIN by completing the Substitute Form
W-9 below, certifying that the TIN provided on Substitute Form W-9 is correct
and that either (A) you have not been notified by the Internal Revenue Service
that you are subject to backup withholding or (B) the Internal Revenue Service
has notified you that you are no longer subject to backup withholding.
If you have not been issued a TIN and have applied for one, or if you
intend to apply for one in the near future, check the box in Part III and sign
and date both the Substitute Form W-9 and the "Certificate of Taxpayer Awaiting
Identification Number." You then have generally 60 days within which to provide
the Depositary with your TIN and a new Substitute Form W-9. If you fail to do
so, the Depositary will withhold 31% from any payments and distributions made to
you thereafter until a TIN and new Substitute Form W-9 are provided.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the TIN of the record
owner of the Shares or of the last transferee appearing on the transfers
attached to, or endorsed on, the certificates evidencing the Shares. If the
Shares are registered in more than one name or are not registered in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
11
<PAGE>
PAYER'S NAME: CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
SUBSTITUTE PART I - PLEASE ----------------------
FORM W-9 PROVIDE YOUR TIN IN Social Security Number
THE BOX AT RIGHT AND OR
DEPARTMENT OF THE CERTIFY BY SIGNING
TREASURY INTERNAL AND DATING BELOW.
REVENUE SERVICE ----------------------
Employer
Identification Number
--------------------------------------------
PAYER'S REQUEST FOR PART II
TAXPAYER IDENTIFICATION CERTIFICATION -- Under penalties of
NUMBER (TIN) perjury, I certify that:
(1) The number shown on this form is
my current taxpayer
identification number (or I am
waiting for a number to be issued
to me) and
(2) I am not subject to backup
withholding under the provisions
of Section 3486(a)(1)(c) of the
Internal Revenue Code because (i)
I have not been notified by the
Internal Revenue Service (the
"IRS") that I am subject to
backup withholding as a result of
failure to report all interest or
dividends, or (ii) the IRS has
notified me that I am no longer
subject to backup withholding.
--------------------------------------------
PART III
Awaiting TIN
--------------------
--------------------------------------------
CERTIFICATE INSTRUCTIONS -- You must
cross out item (2) in Part II above
if you have been notified by the IRS that
you are subject to backup withholding
because of underreporting interest or
dividends on your tax return. However,
if after being notified by the IRS that
you are subject to backup withholding you
received another notification from the
IRS that you are no longer subject to
backup withholding, do not cross out
item (2).
------------------------------------
SIGNATURE: DATE:
- ---------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS
FORM MAY RESULT IN BACKUP WITHHOLDING OF 31%
OF ANY PAYMENT MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES
FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE
IF YOU CHECKED THE BOX IN PART III OF
SUBSTITUTE FORM-W-9
----------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER
IDENTIFICATION NUMBER
I certify under penalties of perjury that a
taxpayer identification number has not been
issued to me, and either (a) I have mailed or
delivered an application to receive a
taxpayer identification number to the
appropriate IRS Center or Social Security
Administration Office or (b) I intend to mail
or deliver such an application in the near
future. I understand that if I do not
provide a taxpayer identification number to
the payer before the earliest of (i) the date
of payment or (ii) sixty (60) days, 31% of
all reportable payments made to me may be
withheld.
------------------------ ---------------------,1996
Signature Date
<PAGE>
The Depositary for the Offer is:
Chemical Mellon Shareholder Services, L.L.C.
By Mail: By Hand/Overnight Delivery:
P.O. Box 817 120 Broadway, 13th Floor
Midtown Station New York, NY 10271
New York, NY 10018
By Facsimile Transmission:
(201) 296-4291 or 4293
Confirm by Telephone:
(201) 296-4983
------------------------------------------------------
Any questions or requests for assistance or for additional copies of the
Offer to Purchase, this Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent at its address and the
telephone numbers set forth below. Stockholders may also contact their broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
MORROW & CO., INC.
909 Third Avenue
New York, New York 10022
(212) 754-8000 (Call Collect)
or
1-800-662-5200 (Toll Free)
EXHIBIT (D)(3)
NOTICE OF GUARANTEED DELIVERY
<PAGE>
HORSEHEAD RESOURCE DEVELOPMENT COMPANY, INC.
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
This form or a facsimile hereof must be used to accept the Offer (as
defined below) if:
(a) certificates for shares of common stock, par value $.01 per share
("Shares"), of Horsehead Resource Development Company, Inc., a
Delaware corporation (the "Company"), are not immediately
available; or
(b) the procedure for book-entry transfer (set forth in Section 2 of
the Company's Offer to Purchase, dated May 16, 1996 (the "Offer
to Purchase")) cannot be followed on a timely basis; or
(c) time will not permit the Letter of Transmittal, dated May 16,
1996, and all other required documents to reach the depositary
for the offer (the "Depositary") before the Expiration Date (as
defined in Section 1 of the Offer to Purchase).
This form, properly completed and duly executed, may be delivered by hand,
mail or facsimile transmission to the Depositary. See Section 2 of the Offer to
Purchase.
To:
---
Chemical Mellon Shareholder Services, L.L.C., Depositary
---------------------------------------------------------
By Mail: By Hand/Overnight Delivery:
------- ---------------------------
P.O. Box 817 120 Broadway, 13th Floor
Midtown Station New York, NY 10271
New York, NY 10018
By Facsimile Transmission:
--------------------------
(201) 296-4291 or 4293
Confirm by Telephone:
---------------------
(201) 296-4983
--------------------------------------------------
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE OR
TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THE ONE LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
(AS DEFINED IN THE OFFER TO PURCHASE) UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, at a price of $5.75 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase and the related Letter of Transmittal (which
together constitute the "Offer"), receipt of which is hereby acknowledged,
___________ Shares pursuant to the guaranteed delivery procedure set forth in
Section 2 of the Offer to Purchase.
================================================================================
Number of Shares tendered:
- --------------------------------------------------------------------------------
Stock Certificate Nos. (if available):
- --------------------------------------------------------------------------------
If Shares will be delivered by book-entry transfer:
-----------------------------
Name of Tendering Institution:
-------------------------------------------------
- --------------------------------------------------------------------------------
Account No. at: SIGN HERE
----------------------------
----------------------------------
[ ] The Depository Trust Company (Signature(s))
[ ] Philadelphia Depository Trust Company
----------------------------------
(Signature(s))
----------------------------------
(Name(s)) (Please Print)
----------------------------------
(Address)
----------------------------------
(Zip Code)
----------------------------------
(Area Code and Telephone No.)
Dated: ________________, 1996
2
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, an "Eligible Institution" (as defined in Section 2 of the
Offer to Purchase), guarantees that the Depositary will receive either the stock
certificates representing the Shares tendered hereby, in proper form for
transfer, or confirmation of the book-entry transfer of such Shares into the
Depositary's account at the Depository Trust Company or the Philadelphia
Depository Trust Company, in any such case together with a properly completed
and duly executed Letter of Transmittal (or a facsimile thereof) and other
documents required by the Letter of Transmittal, all within three (3) Nasdaq
National Market trading days after the date of execution of this notice.
----------------------------------
NAME OF FIRM
----------------------------------
AUTHORIZED SIGNATURE
----------------------------------
NAME (PLEASE PRINT)
----------------------------------
TITLE
----------------------------------
ADDRESS
----------------------------------
ZIP CODE
----------------------------------
(AREA CODE AND TELEPHONE NO.)
Dated: , 1996
-------------------------------------------------------
NOTE: DO NOT SEND STOCK CERTIFICATES WITH THIS FORM.
YOUR STOCK CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL.
3
EXHIBIT (D)(4)
LETTER TO BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES
<PAGE>
HORSEHEAD RESOURCE DEVELOPMENT COMPANY, INC.
Offer to Purchase for Cash
Up to 1,751,600 Shares of its Common Stock
at
$5.75 Net Per Share
May 16, 1996
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
Horsehead Resource Development Company, Inc., a Delaware corporation (the
"Company"), has appointed us to act as Information Agent in connection with its
offer pursuant to which the Company is inviting its stockholders to tender
shares of its common stock, par value $.01 per share ("Shares"), at a price of
$5.75 per Share (the "Purchase Price"), net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
May 16, 1996 (the "Offer to Purchase"), and in the related Letter of
Transmittal, dated May 16, 1996 (which together constitute the "Offer"). We
enclose herewith the materials listed below relating to the Offer.
The Company will purchase, at the Purchase Price, net to the seller in
cash, up to 1,751,600 Shares that are properly tendered (and not withdrawn in
accordance with Section 3 of the Offer to Purchase), upon the terms and subject
to the conditions of the Offer. The Company reserves the right, in its sole
discretion, to purchase more than 1,751,600 Shares pursuant to the Offer. The
Offer is not conditioned upon any minimum number of Shares being validly
tendered. The Offer is, however, subject to certain other conditions. See
Section 5 of the Offer to Purchase.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
(1) Offer to Purchase, dated May 16, 1996;
(2) Letter of Transmittal for your use and for the information of
your clients (together with "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" providing
information relating to backup Federal income tax withholding);
(3) Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available (or the
procedures for book-entry transfer cannot be followed on a timely
basis) or time will not permit the Letter of Transmittal and all
other required documents to reach the depositary for the Offer
(the "Depositary") before the Expiration Date (as defined in the
Offer to Purchase);
<PAGE>
(4) Letter to Clients which may be sent to your clients for whose
accounts you hold Shares registered in your name (or in the name
of your nominee), with space provided for obtaining such client's
instructions with regard to the Offer;
(5) Letter, dated May 16, 1996, from William M. Quirk, President and
Chief Executive Officer of the Company, to stockholders of the
Company; and
(6) Return envelope addressed to Chemical Mellon Shareholder
Services, LLC, as Depositary.
PLEASE BRING THE OFFER TO THE ATTENTION OF YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE
14, 1996, UNLESS THE OFFER IS EXTENDED.
No fees or commission will be payable to brokers, dealers or other persons
for soliciting tenders of Shares pursuant to the Offer. The Company will
however, upon request, reimburse you for customary mailing and handling expenses
incurred by you in forwarding materials in respect of the Offer to your clients.
The Company will not pay (or cause to be paid) any stock transfer taxes on its
purchase of Shares pursuant to the Offer, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal and any other required documents should be sent
to the Depositary with either certificate(s) representing the tendered Shares or
confirmation of their book-entry transfer, all in accordance with the
instructions set forth in the Offer.
As described in Section 2 of the Offer to Purchase, tenders may be made
even though stock certificates are not immediately available (or the procedures
for book-entry transfer cannot be followed on a timely basis) or time will not
permit the Letter of Transmittal and all other required documents to reach the
Depositary before the Expiration Date, if such tenders are made by or through an
"Eligible Institution" (as defined in the Offer to Purchase). Certificates for
Shares so tendered in proper form for transfer (or a confirmation of a book-
entry transfer of such Shares into the Depositary's account at one of the "Book-
Entry Transfer Facilities" described in the Offer to Purchase), together with a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) and any other documents required by the Letter of Transmittal, must be
received by the Depositary within three (3) Nasdaq National Market trading days
after the date of execution of a properly completed and duly executed Notice of
Guaranteed Delivery.
Any questions you have with respect to the Offer should be addressed to the
Information Agent at its address and telephone number set forth on the back
cover of the Offer to Purchase.
2
<PAGE>
Requests for additional copies of the enclosed material may be directed to the
Information Agent, Morrow & Co., Inc., at 1-800- 662-5200.
Very truly yours,
MORROW & CO., INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL
CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE COMPANY,
THE INFORMATION AGENT OR THE DEPOSITARY OR AUTHORIZE YOU OR ANY
OTHER PERSON TO MAKE ANY STATEMENTS OR USE ANY MATERIAL ON
BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER, OTHER THAN THE
MATERIAL ENCLOSED HEREWITH AND THE STATEMENTS SPECIFICALLY
CONTAINED IN SUCH MATERIAL.
3
EXHIBIT (D)(5)
LETTER TO CLIENTS FOR USE BY
BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES
<PAGE>
HORSEHEAD RESOURCE DEVELOPMENT COMPANY, INC.
Offer to Purchase for Cash
Up to 1,751,600 Shares of its Common Stock
at
$5.75 Net Per Share
May 16, 1996
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated May 16,
1996 (the "Offer to Purchase"), and the related Letter of Transmittal, dated May
16, 1996 (which together constitute the "Offer"), in connection with the Offer
by Horsehead Resource Development Company, Inc., a Delaware corporation (the
"Company"), pursuant to which the Company is inviting its stockholders to tender
shares of its common stock, par value $.01 per share ("Shares"), at a price of
$5.75 per Share (the "Purchase Price"), net to the seller in cash, upon the
terms and subject to the conditions of the Offer.
All Shares properly tendered and not withdrawn will be purchased at the
Purchase Price, net to the seller in cash, upon the terms and subject to the
conditions of the Offer. All Shares not purchased pursuant to the Offer will be
returned to the tendering stockholders at the Company's expense as promptly as
practicable following the Expiration Date (as defined in Section 1 of the Offer
to Purchase). The Company reserves the right, in its sole discretion, to
purchase more than 1,751,600 Shares pursuant to the Offer. See Section 1 of the
Offer to Purchase.
We are the holder of record of Shares held for your account. As such, we
are the only ones who can tender your Shares, and then only pursuant to your
instructions. The Letter of Transmittal is for your information only and cannot
be used by you to tender Shares we hold for your account.
Please instruct us as to whether you wish us to tender any of or all the
Shares we hold for your account upon the terms and subject to the conditions of
the Offer.
We call your attention to the following:
(1) You may tender any portion of or all your Shares as indicated in
the attached instruction form.
(2) The Offer is not conditioned upon any minimum number of Shares
being tendered. The Offer is, however, subject to certain other
conditions. See Section 5 of the Offer to Purchase.
<PAGE>
(3) The Offer and withdrawal rights will expire at 12:00 midnight,
New York City time, on Friday, June 14, 1996, unless the Offer is
extended.
(4) The Offer is for up to 1,751,600 Shares, representing
approximately 4.8% of the Shares outstanding as of May 16, 1996.
(5) Tendering stockholders will not be obligated to pay any brokerage
commissions, solicitation fees, or, subject to Instruction 6 of
the Letter of Transmittal, any stock transfer taxes with respect
to the transfer and sale of Shares to the Company pursuant to the
Offer.
If you wish to have us tender any of or all your Shares, please so instruct
us by completing, executing and returning to us the attached instruction form.
An envelope to return your instruction form to us is enclosed. If you authorize
us to tender your Shares, we will tender all such Shares unless you specify
otherwise on the instruction form.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO
PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF BEFORE THE
EXPIRATION DATE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, JUNE 14,
1996, UNLESS THE OFFER IS EXTENDED.
This Offer is not being made to, nor will the Company accept tenders from
or on behalf of, owners of Shares in any jurisdiction in which the making of the
Offer or its acceptance would not be in compliance with the laws of such
jurisdiction. In any jurisdiction in which the securities, blue sky or other
laws require the Offer to be made by a licensed broker or dealer, the Offer will
be deemed to be made on the Company's behalf by one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
2
<PAGE>
INSTRUCTIONS
With Respect to the
Offer to Purchase for Cash
Up to 1,751,600 Shares of Common Stock
of
HORSEHEAD RESOURCE DEVELOPMENT COMPANY, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated May 16, 1996, and the related Letter of
Transmittal, dated May 16, 1996 (which together constitute the "Offer"), in
connection with the Offer by Horsehead Resource Development Company, Inc.,
a Delaware corporation (the "Company"), to purchase for cash up to
1,751,600 shares of its common stock, par value $.01 per share ("Shares"),
at a price of $5.75 per Share, net to the seller in cash, upon the terms
and subject to the conditions of the Offer.
The undersigned hereby instruct(s) you to tender to the Company the
number of Shares indicated below or, if no number is indicated, all Shares
you hold for the account of the undersigned, upon the terms and subject to
the conditions of the Offer.
Aggregate number of Shares to be tendered by you for the account of the
undersigned:*
Shares
----------------------------------------
*Unless otherwise indicated, all the Shares held for the account of the
undersigned will be tendered.
SIGNATURE BOX
Dated: , 1996
------------
--------------------------------
(Signature(s))
--------------------------------
(Name(s)) (Please Print)
--------------------------------
(Address)
--------------------------------
(Zip Code)
--------------------------------
(Area Code and Telephone No.)
--------------------------------
Taxpayer Identification or Social
Security Number
3
EXHIBIT (D)(6)
GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the
Payor--Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e.. 00-0000000. The table below will determine the
number to give the Payor.
<TABLE><CAPTION>
- --------------------------------------------------- --------------------------------------------------
Give the Give theEMPLOYER
For this type of account: SOCIAL SECURITY For this type of account: IDENTIFICATION
number of-- number of--
- --------------------------------------------------- --------------------------------------------------
<S> <C> <C> <C>
1. An individual's account The individual 8. Sole proprietorship The owner(4)
account
2. Two or more individuals The actual owner of 9. A valid trust, estate, The legal entity
(joint account) the account or, if or pension trust (Do not furnish the
combined funds, any identifying number
one of the of the personal representative or
individuals(1) trustee unless the legal
entity itself is not designated
in the account title.)(5)
3 Husband and wife (joint The actual owner of 10. Corporate account The corporation
account) the account or, if
joint funds, either
person(1)
4. Custodian account of a 11. Religious, charitable, The organization
minor (Uniform Gift to The minor(2) or educational
Minors Act) organization account
5. Adult and minor (joint The adult or, if the 12. Partnership account The partnership
account) minor is the only held in the name of the
contributor, the business
minor(1)
6. Account in the name of The ward, minor, or 13. Association, club or The organization
guardian or committee incompetent person(3) other tax-exempt
for a designated ward, organization
minor, or incompetent
person
7. a. The usual 14. A broker or registered The broker or
revocable savings nominee nominee
trust account The grantor-trustee(1)
(grantor is also
trustee)
b. So-called trust 15. Account with the The public entity
account that is Department of
not a legal or The actual owner(1) Agriculture in the name
valid trust under of a public entity
State law (such as a State or
local governmental,
school district or
prison) that receives
agricultural program
payments
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a taxpayer
identification number or you don't Payments of interest not generally
know your number, obtain Form SS-5, subject to back- up withholding
Application for a Social Security include the following:
Number Card, or Form SS-4,
Application for Employer Payments of interest on obligations
Identification Number, at the local issued by individuals. Note: You
office of the Social Security may be subject to back- up
Administration or the Internal withholding if this interest is
Revenue Service and apply for a $600 or more and is paid in the
number. course of the payer's trade or
business and you have not provided
Payees Exempt from Backup Withholding your correct taxpayer
identification number to the payer.
Payees specifically exempted from
backup withholding on ALL payments Payments of tax-exempt interest
include the following: (including exempt interest
dividends under section 852).
A corporation.
Payments described in section
A financial institution. 6049(b)(5) to non-resident aliens.
An organization exempt from tax Payments on tax-free covenant bonds
under section 501(a), or an under section 1451.
individual retirement plan.
Payments made to a nominee.
The United States or any agency or
instrumentality thereof. Exempt payees described above should
file Form W-9 to avoid possible
A State, the District of Columbia, erroneous backup withholding. FILE
a possession of the United States, THIS FORM WITH THE PAYER, FURNISH
or any subdivision or YOUR TAXPAYER IDENTIFICATION NUMBER,
instrumentality thereof. WRITE "EXEMPT" ON THE FACE OF THE
FORM, AND RETURN IT TO THE PAYER. IF
A foreign government, a political THE PAYMENTS ARE INTEREST, DIVIDENDS,
subdivision of a foreign OR PATRONAGE DIVIDENDS, ALSO SIGN AND
government, or any agency or DATE THE FORM.
instrumentality thereof. Certain payments other than
interest, dividends, and patronage
An international organization or dividends that are not subject to
any agency, or instrumentality information reporting are also not
thereof. subject to backup withholding. For
details, see the regulations under
A registered dealer in securities sections 6041, 6041A(a), 6045, and
or commodities registered in the 6050A.
U.S. or a possession of the U.S. Privacy Act Notice--Section 6109
requires most recipients of dividend
A real estate investment trust. interest, or other payments to give
taxpayer identification numbers to
A common trust fund operated by a payers who must report the payments
bank under section 584(a). to IRS. IRS uses the numbers for
identification purposes. Payers must
An exempt charitable remainder be given the numbers whether or not
trust, or a non-exempt trust recipients are required to file tax
described in section 4947(a)(1). returns. Beginning January 1, 1993,
payers must generally withhold 31% of
An entity registered at all times taxable interest, dividend and
under the Investment Company Act of certain other payments to a payee who
1940. does not furnish a taxpayer
identification number to a payer.
A foreign central bank of issue. Certain penalties may also apply.
Payments of dividends and patronage Penalties
dividends not generally subject to (1) Penalty for Failure to Furnish
backup withholding include the Taxpayer Identification Number--If
following: you fail to furnish your taxpayer
identification number to a payer, you
Payments to nonresident aliens are subject to a penalty of $50 for
subject to withholding under each such failure unless your failure
section 1441. is due to reasonable cause and not to
willful neglect.
Payments to partnerships not (2) Civil Penalty for False
engaged in a trade or business in Information With Respect to
the U.S. and which have at least Withholding--If you make a false
one nonresident partner. statement with no reasonable basis
which results in no imposition of
Payments of patronage dividends backup withholding, you are subject
where the amount received is not to a penalty of $500.
paid in money. (3) Criminal Penalty for Falsifying
Information-Falsifying certifications
Payments made by certain foreign or affirmations may subject you to
organizations. criminal penalties including fines
and/or imprisonment.
Payments made to a nominee.
FOR ADDITIONAL INFORMATION CONTACT
YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
EXHIBIT (D)(7)
LETTER TO THE COMPANY'S STOCKHOLDERS FROM
THE PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE COMPANY
<PAGE>
HORSEHEAD RESOURCE
DEVELOPMENT CO., INC.
110 East 59th Street
New York, NY 10022
(212) 527-3003
May 16, 1996
To Our Stockholders:
This letter is to inform you that Horsehead Resource Development
Company, Inc. (the "Company") is offering to purchase up to 1,751,600
shares (representing approximately 4.8% of the currently outstanding shares)
of its common stock from its public stockholders at a per share price of
$5.75, net to the seller in cash.
Upon termination of the offer, the Company will delist its common
stock from the NASDAQ National Market and cease to be a reporting company
under the Securities Exchange Act of 1934, as amended. Accordingly, no
public market for the shares will exist after the offer.
The offer is explained in detail in the enclosed Offer to
Purchase and Letter of Transmittal. If you wish to tender your shares,
detailed instructions on how to tender shares are also in the enclosed
materials. Also enclosed is the Company's Annual Report on Form 10-K for
the year ended December 31, 1995. We encourage you to read these materials
carefully before making any decision with respect to the offer.
Please note that the offer is scheduled to expire at 12:00
midnight, New York City time, on Friday, June 14, 1996, unless extended by
the Company. Questions regarding the offer may be directed to Morrow &
Co., Inc., the Information Agent, at 1-800-662-5200 (toll free).
Sincerely,
/s/ William M. Quirk
William M. Quirk
President and CEO
EXHIBIT (D)(8)
PRESS RELEASE
<PAGE>
Media Contact
- -------------
(212) 527-3003
HORSEHEAD RESOURCE DEVELOPMENT
------------------------------
GOING PRIVATE, COMMENCES CASH TENDER OFFER
------------------------------------------
New York, NY, May 16, 1996 (NASDAQ-HHRD). Horsehead Resource Development
Co., Inc. (HRD) announced today the commencement of an offer to repurchase all
1,751,600 shares of its common stock held by its public stockholders. The
offer will expire on June 14, 1996, unless extended. The purchase price
for each share of common stock is $5.75 per share in cash.
The offer will be subject to various terms and
conditions described in offering materials to be distributed to public
stockholders. Chemical Mellon Shareholder Services, L.L.C. will serve as
depositary and Morrow & Co., Inc. will serve as the information agent.
After the repurchase, HRD will become a private company and its shares will
no longer be listed on NASDAQ or registered under the Federal securities
laws.
EXHIBIT (G)
ISSUER TENDER OFFER STATEMENT ON SCHEDULE 13E-4
<PAGE>
================================================================================
================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
HORSEHEAD RESOURCE DEVELOPMENT COMPANY, INC.
(Name of Issuer and Person Filing Statement)
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
440699-10-6
(CUSIP Number of Class of Securities)
William M. Quirk, President
Horsehead Resource Development Company, Inc.
110 East 59th Street
New York, New York 10022
(212) 527-3003
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person Filing Statement)
Copy to:
Morris Orens, Esq.
Shereff, Friedman, Hoffman & Goodman, LLP
919 Third Avenue
New York, New York 10022
(212) 758-9500
May 16, 1996
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
================================================================================
Transaction Valuation* Amount of Filing Fee
---------------------- --------------------
$10,071,700 $2,014.34
================================================================================
* Based upon purchase of 1,751,600 shares at $5.75 per share.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: Not Applicable
Form or Registration No.: Not Applicable
Filing Party: Not Applicable
Date Filed: Not Applicable
================================================================================
<PAGE>
SCHEDULE 13E-4
INTRODUCTION
This Issuer Tender Offer Statement (this "Statement") relates to the offer
by Horsehead Resource Development Company, Inc., a Delaware corporation (the
"Company"), to purchase up to 1,751,600 shares of its common stock, par value
$.01 per share (the "Shares"), for $5.75 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated May 16, 1996 (the "Offer to Purchase"), and in the related Letter of
Transmittal, dated May 16, 1996 (which together constitute the "Offer"), copies
of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively.
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is Horsehead Resource Development Company,
Inc., a Delaware corporation, which has its principal executive offices at 110
East 59th Street, New York, New York 10022.
(b) This Statement relates to the offer by the Company to purchase
the Shares at a price of $5.75 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase.
Reference is hereby made to the "Introduction," "The Offer - 1. Number of
Shares; Extension of the Offer," "The Offer - 7. Background and Purpose of the
Offer and the Purchase," "The Offer - 9. Source and Amount of Funds" and "The
Offer - 11. Transactions and Arrangements concerning the Shares" of the Offer
to Purchase, each of which is herein incorporated by reference.
(c) Reference is hereby made to the "Introduction" and "The Offer -
6. Price Range of Shares; Dividends" of the Offer to Purchase, each of which is
herein incorporated by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is hereby made to "The Offer - 9. Source and Amount of
Funds" of the Offer to Purchase, which Section is herein incorporated by
reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) Reference is hereby made to the "Introduction," "Special Factors -
Purpose of the Offer," "Special Factors - Certain Effects of the Offer," "The
Offer - 6. Price Range of Shares; Dividends," "The Offer - 7. Background and
Purpose of the Offer and the Purchase" and "The Offer - 13. Effects of the
Offer on the Market for Shares; Registration under the Exchange Act" of the
Offer to Purchase, each of which is herein incorporated by reference.
2
<PAGE>
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Reference is hereby made to "The Offer - 11. Transactions and Arrangements
Concerning the Shares" of the Offer to Purchase, which Section is herein
incorporated by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
Reference is hereby made to the "Introduction," "Special Factors -
Relationship Between Major Stockholders," "The Offer - 7. Background and
Purpose of the Offer and the Purchase" and "The Offer - 11. Transactions and
Arrangements Concerning the Shares" of the Offer to Purchase, each of which is
herein incorporated by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
Reference is hereby made to the front cover page, the "Introduction" and
"The Offer - 15. Fees and Expenses" of the Offer to Purchase, each of which is
herein incorporated by reference.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) Reference is hereby made to "The Offer - 8. Certain Information
Concerning the Company" of the Offer to Purchase, which Section is herein
incorporated by reference. The audited financial statements of the Company set
forth in the Company's Report on Form 10-K for the year ended December 31, 1995
are incorporated herein by reference. The unaudited financial statements of the
Company set forth in the Company's Report on Form 10-Q for the quarterly period
ended March 31, 1996 are incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) None.
(b) Reference is hereby made to "The Offer - 12. Certain Legal Matters;
Regulatory Approvals; No Appraisal Rights" of the Offer to Purchase, which
Section is herein incorporated by reference.
(c) Reference is hereby made to "Special Factors - Certain Effects of the
Offer" and "The Offer - 13. Effects of the Offer on the Market for Shares;
Registration under the Exchange Act" of the Offer to Purchase, each of which is
herein incorporated by reference.
(d) Reference is hereby made to "The Offer - 5. Certain Conditions of
the Offer" of the Offer to Purchase, which Section is herein incorporated by
reference.
3
<PAGE>
(e) Reference is hereby made to the Offer to Purchase and the related
Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively, and are herein incorporated by reference in their
entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated May 16, 1996.
(a)(2) Letter of Transmittal, dated May 16, 1996.
(a)(3) Notice of Guaranteed Delivery, dated May 16, 1996.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees dated May 16, 1996.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees, dated May 16, 1996.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Letter to the Company's Stockholders from the President and Chief
Executive Officer of the Company.
(a)(8) Press Release, dated May 16, 1996.
(b) Not applicable.
(c)(1) Shareholders Agreement, dated as of July 26, 1988, among the
Company, HII and B.U.S. Environmental Services, Inc.
(c)(2) Amendment to Shareholders Agreement, dated July 24, 1990 among
B.U.S. Environmental Services, Inc., HII, Horsehead Investment
Management Corporation and the Company.
(d) Not applicable.
(e) Not applicable.
(f) None, except those materials referred to in (a)(1), (a)(2),
(a)(3), (a)(4), (a)(5) and (a)(6).
4
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
HORSEHEAD RESOURCE DEVELOPMENT
COMPANY, INC.
By: /s/ William M. Quirk
----------------------------------------------
William M. Quirk
President
Date: May 16, 1996
5
